Mistaken identity: ASIC caught out in Paul Chiodo mix-up

The corporate regulator has been accused of mixing up the Melbourne-based property developer with a Swiss executive who plans to tour Australia in the coming months.

Former Keystone director Paul Chiodo was last week ordered to surrender his passport but his lawyers say the argument behind that order – that he had international flights booked – was incorrect.

The corporate regulator has been accused of fumbling a major investigation by confiscating the passport of a Melbourne-based prop­erty developer based on the mistaken identity of a Swiss family with the same surname.

The Federal Court last week ordered former Keystone Asset Management director Paul Chiodo to surrender his passport and be restrained from leaving the country after the Australian ­Securities & Investments Commission submitted documents that purported to show the property developer had booked flights to travel in and out of Australia between August and September.

The Federal Court also granted ASIC freezing orders over property and bank accounts in Keystone’s Shield Master Fund, with ASIC saying it sought the orders to help protect investor funds while an investigation is ongoing.

However, lawyers for Mr Chiodo allege the travel plans were ­actually based on a Swiss-based executive of a similar name who had plans to travel in Australia in the coming months.

In an affidavit presented to the court on June 17 and sighted by The Australian, lawyers for ASIC submitted details of Qantas flights they said Mr Chiodo was booked on, including travelling from Zurich to Dubai on August 20, Dubai to Melbourne on August 21, then a series of internal flights around Australia, including to Sydney and Perth, before flying back to Zurich on September 22.

But the flights were booked under the name of a Mr Paolo Chiodo, with two others listed on the booking: a Mrs Sibilla Chiodo and a Gian Paolo Chiodo.

Lawyers for the property developer have now written to ASIC’s legal team informing it that Paolo Chiodo is not Paul Chiodo and that the other passengers on the booking are not known to him.

In the letter seen by The Australian, the lawyers argue that the final orders sought, to surrender the passport and restrict travel, are “unnecessary and without basis”.

“Such orders interfering with an individual’s freedom of movement are to be made with caution and ASIC will not be able to justify them in circumstances where there is no evidence of flight risk nor likely impediment to ASIC’s investigations,” the law firm representing Mr Chiodo, Holding Redlich, wrote in the letter.

“The ‘Paulo Chiodo’ referred to in that document is not our client. Mr Chiodo has no international travel booked.

“On 21 June 2024, our office undertook a simple online search to identify the true identity of the holder of the tickets to these flights and identified a webpage referring to a Mr Paolo Chiodo residing in Ebikon, Switzerland.

“The webpage refers to Mr Paulo Chiodo being married to a ‘Sibylle’.

“We query why your client did not undertake the same simple search and also why your client failed to first verify the identity of the traveller information provided by Qantas against the passport and birth date details of our ­client.”

Similar efforts by The Australian found a Mr Paolo Chiodo, based in Ebikon, Switzerland, who is married to a Sibylle and has a teenage son, Gian Paolo.

In lieu of the travel restriction orders sought by ASIC, Mr Chiodo’s legal team is proposing he instead provide ASIC with 14 days’ prior written notice of any international travel “and, in the course of any overseas travel, to take all reasonable steps to comply with notices issued by ASIC and to ­provide reasonable assistance to any receiver (should one be ­appointed)”.

ASIC declined to comment when contacted by The Australian.

The regulator earlier this year launched action against Keystone’s Shield fund to stop new ­offers of investments in it.

ASIC claimed it issued the stop orders to protect retail investors from buying products under product disclosure statements that might be “defective”.

Among ASIC’s concerns was that the fund might not have ­adequately disclosed “the conflicts of interest associated with investments in funds related to Keystone or how Keystone managed those conflicts”.

Responding to the ASIC action, a note relating to the Shield fund was sent to Keystone members in April. It said advisers were appointed to investigate potential conflicts of interest between Mr Chiodo – who was also a Keystone director – and entities linked with him.