Graeme Walter Miller, a former financial adviser and director of Australian financial services licensee CFS Private Wealth Pty Ltd, was sentenced on 31 July 2020 to six years’ imprisonment for misappropriating $1.865 million of client funds, following an ASIC investigation.
On 14 April 2020, Mr Miller pleaded guilty to six counts of engaging in dishonest conduct in the course of carrying on a financial services business, contrary to section 1041G of the Corporations Act 2001. The charges relate to ten clients from whom Mr Miller encouraged or facilitated the transfer of between $50,000 and $950,000 by way of an investment for the benefit of the client. Mr Miller then misappropriated those funds for his own purposes. Four counts relate to funds invested with Mr Miller through self-managed superannuation funds held by the clients.
Acting Judge Woods of the Downing Centre District Court sentenced Mr Miller to six years’ imprisonment, to be eligible for parole after serving four years.
In sentencing Mr Miller, Judge Woods described Mr Miller’s conduct as a “Ponzi scheme” involving a “significant breach of trust” and a “cruel and deceitful betrayal inevitably leading to financial disaster”.
Judge Woods also made reparation orders of approximately $1.777 million in favour of the ten clients who were the subject of the charges against Mr Miller.
Following the sentencing, ASIC Deputy Chair Daniel Crennan QC said Mr Miller has been found to have systematically breached the trust of his clients over a long period, resulting in significant losses.
‘As a financial adviser Mr Miller ought to have protected the interests of his clients. His sentencing should send a strong message that such conduct will lead to individuals involved being brought before the court to face criminal charges.’
The Commonwealth Director of Public Prosecutions prosecuted the matter after a referral from ASIC.
Between July 2013 and April 2017, Mr Miller, of Myocum, New South Wales, advised his financial planning clients to invest funds with CFS Corporation Pty Ltd (CFS), of which he was also a director, on the basis that CFS would invest the money. Mr Miller did not invest the funds given to CFS by those clients, instead he used the funds for his own benefit and to meet business expenses, including payments made to other clients as dividend payments.
Of the $1.865 million of client funds that were misappropriated by Mr Miller:
- $987,000 was transferred to bank accounts and credit cards held by Mr Miller and his family members;
- $318,500 was used to pay dividends, interest or return of capital to other clients in relation to their investments with Mr Miller;
- $135,000 was used to pay other personal and business expenses; and
- $27,000 was withdrawn in cash or transferred overseas.
In January 2019, the Federal Court banned Mr Miller from providing financial services for 25 years, and disqualified him from managing corporations for three years (19-009MR).