$180m Ponzi scheme operator Tony Iervasi pleads guilty

Tony Iervasi, who ran a Ponzi scheme which pulled in about $180m from hundreds of investors, has pleaded guilty to five criminal charges.

The mastermind of one of the nation’s biggest ever Ponzi schemes, who duped hundreds of people including a priest and a politician into pouring $185m into the scam, has pleaded guilty to five criminal charges.

Tony Iervasi ran a purported foreign exchange trading scheme from the Westfield Tower above the busy Bondi Junction shopping complex, offering products such as the “Brexit Special” and a “US Election Special Trade’’.

Iervasi, of Tweed Heads, invested only a tiny fraction of the funds raised however, instead cycling new money raised back to previous investors, in what is called, and Iervasi has admitted, was a Ponzi scheme.

The scheme, run through companies Courtenay House and Courtenay House Capital Trading Group, drew in about 585 investors who contributed about $180m, the Australian Securities and Investments Commission (ASIC) said on Tuesday.

Previous investigations by News Corp Australia revealed doctors, business owners, war veterans and a priest had invested in the scheme, which offered returns of up to 25 per cent, while Sutherland Shire Mayor Carmelo Pesce is also listed as a creditor, claiming to be owed more than $1m.

Iervasi on Tuesday pleaded guilty to four offences of engaging in dishonest conduct on December 13, 2010 and April 21, 2017, when he was the sole director of Courtenay House, and also pleaded guilty to carrying on an unlicensed financial services business.

ASIC began investigating Iervasi’s companies in late 2016 before freezing their assets and bank accounts and putting them into liquidation.

Social media accounts linked to Iervasi showed a taste for the high life before the companies were shut down, with him travelling in luxury to Las Vegas, Hawaii and the Bahamas, ­visiting casinos and ­indulging in designer-label spending sprees.

One of the assets seized during the liquidation process was $1.5m held in a casino account.

ASIC said while the investment pitch revolved around foreign exchange and futures trading, in fact, only about 3 per cent of the funds were invested.

“Instead, monthly amounts paid to investors were derived from capital deposited from new investors,’’ ASIC said.

“This has been referred to, and admitted by Mr Iervasi, as a Ponzi scheme.’’

Iervasi branded some of his supposed products around world events, with a court judgment from 2021 referencing a “Brexit Special” and ASIC saying on Tuesday he had also offered a “US Election Special Trade’’.

This was timed to coincide with the January 2017 inauguration of President Trump, “as a way to invest in what Mr Iervasi claimed was ‘fast-money markets’’’, ASIC said.

“On this occasion, Mr Iervasi offered a 15 per cent return.

“Mr Iervasi’s clients were told, via weekly emails, that they had made profits from the US Inauguration Special Trade, but the money was instead used to sustain the Ponzi scheme.’’

Liquidator Said Jahani from accountancy firm Grant Thornton said there were few assets to speak of beyond the substantial sums found in bank accounts, with most of the money raised cycled back into the scheme.

The liquidators have so far distributed dividends of 28c in the dollar to date and the liquidation process is ongoing.

An early creditors’ report indicates participants in the scheme would be paid commissions for bringing in new investors, including professional operations which ran investment seminars spruiking the products.

One consortium alone, the Oceanic Sun Group, was listed among the creditors as being owed $14.8m.

Iervasi will return to court on December 9 for sentencing. At the time of Iervasi’s offending the maximum penalty for the dishonest conduct offence was 10 years’ imprisonment, a fine of $810,000, or both. The maximum penalty for operating without an AFS licence is two years’ imprisonment, a fine of $22,000, or both.