Former Courtenay House director sentenced to 11 years’ prison over Ponzi scheme

In a statement on Monday, the Australian Securities and Investments Commission (ASIC) said the sentence included a significant discount considering Iervasi’s guilty plea and other factors.

When handing down the sentence, Justice Sweeney said Iervasi was dishonest on an “egregious scale”, “establishing the veneer of a successful wealth creating business ... which sought to reassure and persuade victims to invest”.

In sentencing Iervasi, Justice Sweeney considered the total period of offending, which spanned about six-and-a-half years, and the nature and circumstances of the deceit. The judge also took into account the large number of victims, the total net loss of $54 million, and some $12 million of dishonestly obtained funds used for Iervasi's benefit.

“As well as the loss of life savings and family homes, the harm went beyond financial losses to breakdowns of marriages and family relationships, emotional, physical and mental health issues, and the need to delay retirement or resume working in the face of a loss of financial security in their mature years,” Justice Sweeney said.

Iervasi pleaded guilty to four offences of engaging in dishonest conduct in relation to a financial product or financial service contrary to s1041G Corporations Act 2001 (Cth) between 13 December 2010 and 21 April 2017, when he was the sole director and shareholder of Courtenay House, which raised around $180 million from around 585 investors.

Iervasi also pleaded guilty to an offence of carrying on an unlicensed financial services business contrary to s 911A Corporations Act 2001 (Cth). Moreover, he admitted his guilt in relation to a further two s1041G offences which were taken into account on sentence.

Commenting on his sentencing, ASIC deputy chair Sarah Court said: “Mr Iervasi’s actions betrayed the trust of his clients and inflicted damage on hundreds of people. Today’s sentence demonstrates that such deliberate fraudulent activities will not be tolerated.”

The Courtenay House companies, based out of Bondi Junction, NSW, represented to investors that their funds would be traded in forex and futures markets when only around 3 per cent of monies deposited was actually traded.

Instead, monthly amounts paid to investors were derived from capital deposited by new investors. This has been referred to, and admitted by Iervasi, as a Ponzi scheme.

Previously, former Courtenay House contractor, Athan Papoulias, was sentenced to two years’ imprisonment, to be served by way of an intensive corrections order for his role in the unlicensed financial services business. As part of his sentence, Papoulias was ordered to complete 120 hours of community service.

In March this year, David Sipina of Croydon, NSW, pleaded guilty to two criminal charges relating to his role at the Courtenay House group of companies and became the third person to plead guilty in relation to the matter.