Following an ASIC investigation, Mr Thanh Tu, 38 years old, formerly of Forestdale, Brisbane, has today been sentenced to nine-and-a-half years imprisonment in the Brisbane District Court.
Mr Tu has earlier, on 6 November 2015, pleaded guilty to 33 counts of fraud and 21 counts of fraudulent falsification of records and at that time, was remanded in custody.
ASIC alleged that between September 2008 and September 2013, Mr Tu whilst an employee of Patersons Securities Limited (Brisbane (Patersons), dishonestly induced 18 separate individual investors to invest approximately $9 million by misleading investors and by giving, to some investors, false Certificate of Investment in the fictitious Paterson Securities - API Protected Fund and fictitious Patersons Securities Capital Protected Fund.
The defendant did not invest the money into secure investments as directed but instead, fraudulently redirected the funds, through a number of different accounts, to a personal trading account held by him with another organisation. The defendant then, for his own purposes, traded the money in risky investments and ultimately lost a total of $8,120,073.53 of the original capital invested. A total of $959,000.00 was recovered.
During the offending period, Mr Tu made "interest" payments to some of the clients, which were funded through money provided by other clients and not through investment profits made by the defendant.
Mr Tu provided clients with a variety of false documents to conceal his offending, including the false Certificates of Investment.
ASIC Commissioner Greg Tanzer said Mr Tu had deliberately and systematically breached the trust of his clients on a large scale, resulting in the loss of millions of dollars.
'The actions of Mr Tu were deceitful and calculated and undermine confidence in the financial advice industry. His lengthy jail sentence should send a strong message that such conduct will not be tolerated by ASIC or the community,' Mr Tanzer said.
Mr Tu was made eligible for parole after service three years, taking into account time already served in custody.
The matter was prosecuted by the Commonwealth Director of Public Prosecutions.
Mr Tu commenced employment with Patersons in September 2008 as a private client adviser where he provided advice to and invested funds for predominantly Vietnamese and elderly clients. Patersons terminated Mr Tu's employment in September 2013.
Mr Tu was subsequently employed as executive investment adviser by Cognitive Wealth Pty Ltd (Cognitive) until the company became aware of the ASIC investigation. Mr Tu's employment with Cognitive was terminated on 19 December 2013.
On 19 December 2013, ASIC obtained Supreme court order requiring Mr Tu to immediately surrender all of his passports and any visa for any other country to the Registrar of the Supreme Court in Brisbane. The court also ordered that Mr Tu be prohibited from leaving Australia without its consent (refer: 13-354MR)
In July 2014, ASIC permanently banned Mr Tu from providing financial services. (refer: 14-171MR)
Patersons reported Mr Tu's conduct to ASIC and assisted ASIC during its investigation. As a result of Mr Tu's conduct, Patersons implemented a remediation program that was communicated to all of the affected client investors. ASIC understands that a number of the affected client investors have satisfactorily resolved their concerns with Patersons. Further information can be obtained from Patersons on 1300 582 256MR.