Sherwin Financial fraud victims angry BoQ says lawsuit was timed by their ‘choice’

VICTIMS tricked by their crooked financial planner for almost a decade, costing them a toal of $60 million, are livid that a Queensland bank says the timing of when they “chose” to start a lawsuit has restricted their compensation claims.

Nigel Jeffares, one of the victims of crooked financial planner Brad Sherwin. Picture: AAP/John Gass

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VICTIMS tricked by their crooked financial planner for almost a decade are livid that BoQ says the timing of when they “chose” to start a lawsuit has restricted their compensation claims to far shorter periods.

Andrew Shine, who with his wife lost $600,000 in scams run by convicted fraudster Brad Sherwin, is among victims unhappy with the level of bank compensation.

BoQ and fund manager DDH Graham earlier this year agreed to pay $6 million each following a class action lawsuit from Sherwin’s former victims. Sherwin, sentenced last November for 10 years’ jail, ran Sherwin Financial Planners and 400 investors lost $60 million in his Ponzi scheme.

The victims had run a class action because Sherwin had used BoQ accounts administered by DDH Graham.

Justice Bernard Murphy described the proposed settlement as one of the “worst” in terms of returns he had ever seen – although he added that did not make it unreasonable. He cited potential factors affecting the settlement such as the amount of legal costs and a statute limiting victim claims for breaches of contract.

BoQ and DDH, while denying liability, had relied on a statute limiting any legal losses to six years from the case’s filing.

“The defendant didn’t need to plead the statute; that’s a matter for them. But they are entitled to plead it and they did,” Justice Murphy said.

EMAIL COMPLAINT

Mr Shine complained to 180-branch BoQ about its use of the statute of limitations. BoQ chief executive officer Jon Sutton emailed back in June that while sympathetic, the limitation date was set from six years from when the class action’s representative victim “chose to commence proceedings”.

Mr Shine told The Courier-Mail it was “hardly” victims’ choice not to start a lawsuit earlier - he said victims did not know of the fraud until Sherwin’s companies failed in 2013, and even then documentation was tied down longer with investigators and lawyers.

“There’s no way this could have started any earlier,” he said.

Mr Shine said Sherwin had secretly created bank accounts in Mr Shine’s name in 2004. Among telltale flaws in application documents were Mr Shine’s Irish driver’s license being used to provide a Queensland address, he argued.

It listed a 10-year expiry date whereas Queensland licenses have a maximum 5-year period.

“The bank was literally asleep at the wheel,” he said.

Nigel Jeffares, part of a victims group, also argued that to say scammed people “chose” when to start an action was “offensive”. He is slated to meet with Mr Sutton in October and among issues he wished to discuss were special payments.

Mr Shine said he might receive $90,000 in compensation, but it was yet to be finalised, and BoQ should pay more.

BoQ told The Courier-Mail it understood the “frustration” of Sherwin’s clients but the court had deemed the settlement as fair and reasonable.

The bank also put in on the class action participants to divvy up the settlement.

“There is nothing in the terms of the settlement that excludes class members with claims prior to March 2010 from participating in the distribution because of the statute of limitations. BOQ does not have any control over how the settlement sum is to be shared among Mr Sherwin’s former clients,” a spokeswoman said.

DDH declined to comment.

‘DODGY’ CLAIM

The bank accounts had earlier come under scrutiny from the Australian Securities and Investments Commission. In a related court action, ASIC filed an interview in which a DDH employee allegedly said that she had believed transactions on the accounts at the time were “dodgy”.

Another ASIC legal document said: “BOQ staff advised in interviews that transactions of this nature were suspicious and would have caused them to make further inquiries and or escalate the proposed transaction for further consideration had the transaction request been lodged directly with BOQ.”

“It is ASIC’s view that the suspicious circumstances are self-evident on the face of the instructions. They involve well known ... Ponzi-scheme typologies including unexplained round robin transactions.”

But DDH Graham’s then chairman David Graham told The Courier-Mail at the time: “We processed the transactions in good faith and without any reason to believe they were suspicious at the time”.