Nicholas James Ellis, an accountant and former financial advisor operating in Valentine, NSW, has been sentenced to three years imprisonment to be served by way of Intensive Corrections Order (ICO). Mr Ellis was sentenced for making false or misleading statements to obtain money from clients and fraudulent misappropriation of client funds. As a part of the ICO, Mr Ellis will serve 12-months by way of home detention (subject to a further suitability assessment) and undertake 700 hours of community service.
Mr Ellis pleaded guilty to the two charges on 4 August 2017 (17-261MR). An ASIC investigation found Mr Ellis sent 10 letters and one email to a number of his clients for the purpose of raising investment funds to purchase a hotel in Tura, NSW through his company, Tura Pty Limited. The letters and email contained false and misleading statements in relation to the purchase of the hotel.
Mr Ellis admitted to fraudulently misappropriating approximately $562,000 of client funds received by Tura Pty Limited. Mr Ellis used some of the funds to buy a house in Manly, NSW.
‘Mr Ellis was a trusted financial advisor and accountant, who misled his clients and misused their funds for the benefit of his own business. Accountants and financial advisers are in a position of trust. As demonstrated in this case, ASIC is prepared to take criminal action where trusted advisers misappropriate clients’ money,’ said ASIC Commissioner Danielle Press.
In delivering the sentence, Judge Williams remarked that Mr Ellis: ‘Provided information to investors that was untrue and caused those investors to act on that information. Had the true picture been disclosed, the investors may have been less forthcoming’.
ASIC banned Mr Ellis from providing financial services in 2013 for a period of six years (13-069MR). As a result of the sentence, Mr Ellis will automatically be disqualified from managing corporations for a period of 5 years.
The matter will be back in Court on 17 October 2019 for the purposes of determining Mr Ellis’ suitability for home detention.
The matter was prosecuted by the Commonwealth Director of Public Prosecutions after a referral from ASIC.