David Anderson’s life of privilege before Falcon Capital and $450m First Guardian collapse

David Anderson went from working at Australia’s top investment houses to having a front-row seat at potentially one of Australia’s biggest corporate frauds.

Falcon Capital director David Anderson purchased his $9m Hawthorn home in December 2020.

Shonk, snake, scumbag.

This is how former colleagues, partners and business associates describe David Anderson, the man at the centre of the $450m First Guardian investment fund collapse that has devastated thousands of Australians.

Anderson, 46, is accused of orchestrating what could be one of Australia’s biggest corporate fraud and potentially wiping out the retirement savings of 6000 investors, based on liquidators finding that the fund channelled hundreds of millions of dollars offshore and there will likely be a “substantial shortfall” of recoverable assets.

But before all this, he was a quiet, socially awkward graduate from Melbourne’s leafy inner east; an avid hiker and traveller who began his career in the world’s top investment banks.

Anderson had a privileged upbringing, growing up in Melbourne’s affluent eastern suburbs, a stone’s throw from where he moved into a $9m mansion on the banks of the Yarra River with his Indonesian-born wife in late 2020.

He trod the usual path from an applied finance degree through Goldman Sachs JBWere and UBS.

Over its four-and-a-half-year existence First Guardian received $642m and paid out $200m. Where did the money go? Artwork: Frank Ling

Those who knew him recall that he was smart, but lacked the salesman’s charisma to cut it at the top of wealth management.

“He was highly intelligent but had lower emotional intelligence than his peers,” is how a former UBS colleague, who spoke on the condition of anonymity, describes him.

By the early 2010s he was made redundant and partnered with Simon Selimaj, his future Falcon Capital co-director.

For a time, the pair worked to get a series of funds up and running, with intermittent success.

Warning signs were obvious even then, with associates privately questioning Anderson’s ethics and way of operating.

Eventually someone acted on this instinct: One former business partner told The Australian he warned ASIC about Anderson as far back as 2019. Another said he alerted the regulator about Anderson in 2021. ASIC did not act until 2024, when it started surveilling Falcon Capital.

It now alleges Anderson used his investors’ money for personal gain, including paying off his Hawthorn mortgage.

David Anderson’s failed agri bet

Anderson is fluent in Mandarin, and apparently Malay, and was focused on attracting Chinese investment.

He tried to get an agriculture trading platform up and running, along with two agri funds, the Australian Agricultural Fund and Churchill Pastoral.

Somehow, he convinced four heavy hitters to join him. Anderson recruited former BHP Billiton executive and Asia regional director of Austrade, David Twine, who became chairman of First Guardian Group from 2014, along with veteran agribusiness executives David Goodfellow, David Campbell and Richard Brookes.

All were brought in to be part of a venture with ambitions of raising hundreds of millions of dollars in investor capital for Australian farming operations.

It was no match for Anderson’s self-interest.

Anderson was more interested in doing his own deals on the side rather than sending new business to the venture, sources told The Australian.

“The way David always works is there’s a cut in it for him. It wouldn’t matter what transaction was happening, there was a slice in it for him,” a former associate said, adding that FG Agri ended up being “a joke”.

“The sort of investment deals that he was wanting to bring in, he had an association with them in one form or another. He had all these pet projects and real estate deals and so on, but he had a connection with all of them, which rang alarm bells for us.”

There were frequent trips overseas, mainly to China but also Indonesia, where his wife’s family lived. Investments often had a Chinese or Indonesian slant, sources said.

He was also very much a mummy’s boy. His mother, a former Miss Australia runner-up, was often a presence in the office, hovering over her son.

Twine, Goodfellow, Campbell and Brookes put their focus on Churchill Pastoral for a time, even going as far as removing Anderson as a director in 2016. Soon after, all four walked away and Churchill Pastoral was dissolved.

“I hope that lot f...ing drown in their ethics and good governance,” Anderson was heard saying following their exit. That was in 2017.

Anderson’sChiodo and Niven connections

It was around this time that Anderson teamed up with property developer Paul Chiodo through a mutual connection.

Property promoter Sean Niven, who ASIC has since banned from the financial services industry, was also in the frame.

Chiodo developed properties through the Chiodo Diversified Property Fund, with Falcon Capital, run by Selimaj and Anderson, the responsible entity.

Niven played his part by facilitating tie-ups with lead generators.

Falcon Capital director David Anderson

Paul Chiodo from Melbourne-based property developer Chiodo Constructions

Very quickly, Selimaj and Anderson realised how much money cold callers were capable of generating once these referrers got involved in the Chiodo fund. They wanted in too.

Gold Coast-based Empire Wealth Group Australia (EWGA) was already promoting Chiodo. It added First Guardian Australian Development Fund and First Guardian Boutique Development Fund.

Solid leads would be forwarded to United Global Capital (UGC) to seal the deal.

This is a model Anderson would later turbocharge when launching the First Guardian Master Fund.

He had earlier discovered another element to perfect the alleged fraud: the savings of Australia’s Muslim families.

In 2013, Selimaj pitched a Shariah-compliant fund called the First Guardian Super Fund, and went heavy on promoting its strict ethical criteria in compliance with Shariah law.

In an Islamic banking and finance podcast unearthed by The Australian, Selimaj promoted First Guardian Super as he invoked convicted fraudster Bernie Madoff. Liquidators would later find that First Guardian Master Fund shared a key element of a ponzi scheme: investor redemptions were met with investor applications.

“If you’re not going to put your mother’s money in it, why would you put in someone else’s? You have to think from that perspective,” Selimaj, also known as Simon Sallka or Simon Sokol, said on the podcast.

In the same recording, Selimaj leaned in to the Islamic faith.

“Thank Allah, from the age of 21 I’ve been a fund manager. And when you’re a fund manager, you’re at the pinnacle, and information comes to you. You treat it with humility. You don’t treat anyone with a sense of arrogance. And what goes around comes around.”

The other problem? There was no such super fund.

Neither the Australian Prudential Regulation Authority nor the Australian Securities and Investments Commission have any record of First Guardian Super being a valid super fund. Selimaj had registered it as a business name but nothing more.

Like so much of what Selimaj and Anderson are accused of being involved in, it was all smoke and mirrors.

The First Guardian marketing machine

By December 2019, when financial adviser Ferras Merhi first met Selimaj, the First Guardian Master Fund had just launched. They put the cold-calling strategy into overdrive.

Merhi, a former footballer turned financial adviser, was impressed by Selimaj’s pitch and his reputation in the Muslim community.

“He told me he ran his fund very ethically, and I liked the sound of that,” Merhi says.

Ferras Merhi (left); Merhi was paid millions of dollars by Falcon Capital. Picture: Hamish Blair

Merhi would play a key role in the flood of investor money that flowed in.

According to the corporate regulator, he and the advisers he oversaw were ultimately responsible for putting about half of the 12,000 clients into First Guardian and another fund, Shield Master Fund, a Chiodo-linked scheme which accepted $480m of investor funds.

Merhi’s Venture Egg clients have told The Australian they were invested, at times, without their knowledge or direct consent.

Merhi was paid millions of dollars in marketing fees. He was even given a script by Anderson in early 2021 to use when recommending clients invest in the fund.

“I always say two things can be true: my need to make a profit and also look after clients at the same time. They’re not unrelated,” Merhi says.

Between 2021 and 2023, Merhi’s marketing firm, Cornerstone Strategic Management, received at least $12.8m from First Guardian, including $4.7m from the First Guardian Income Fund and $2.2m from the Trade Finance Fund.

The financial adviser, whose Venture Egg was licensed by InterPrac Financial Planning and separately also ran another licensee, Financial Services Group Australia, strenuously denies knowing the payments came from investor money.

“When Anderson was paying these marketing costs, he never said the money was coming from the fund. I assumed the money was coming from his private companies,” Merhi says.

Cornerstone was one of three marketing and lead generation firms paid millions to get clients into First Guardian.

Osama ‘Sam’ Saad, who ran Atlas Marketing and previously worked as an adviser with Merhi, received $21m over a nine-month period from mid-2023.

Rashid Alshakshir’s Indigo Group was paid at least $5.7m.

The aggressive tactics worked better than anyone could have expected. First Guardian’s funds under management exploded from $190m at the end of December 2021 to $406m less than a year later.

Following the First Guardian money trail

Over its four-and-a-half year existence, First Guardian received $642m and paid out $200m.

Where did the money go?

First Guardian claimed to invest client money in defensive, diversified and growing assets. But according to the liquidators, the allocation was arbitrary.

Nearly all of the money was invested into illiquid, private market holdings, including high-risk venture capital-type investments and property development loans.

Millions of dollars ended up in Anderson’s own accounts, the regulator alleges. About $5.6m is alleged to have gone to his personal bank account or bank accounts of entities associated with him without any legitimate basis, according to the corporate cop.

Liquidators also discovered a luxury car the directors had conveniently forgotten to disclose. The Lamborghini Urus, purchased by Falcon Capital in 2023 for $548,000, was repossessed from Selimaj. It arrived at the auction house with his user profile still installed.

Pictured are Anderson’s Hawthorn mansion and a Lamborghini found in Selimaj’s possession.

Hundreds of millions went overseas, making it hard for liquidators to reach; they estimate four loan assets worth as much as $242m are held in offshore entities.

Two days after the corporate cop alerted Falcon Capital it was under surveillance in early 2024, Anderson executed two transactions that shifted $95m in loan obligations from related entities over to a third party called Maleo Singapore, ASIC alleges in legal documents sighted by The Australian.

Anderson was a director of Maleo Singapore until the day before these alleged transactions.

Falcon had been owed a combined $95m from two Indonesian-based firms it had invested in but in assigning these obligations to Maleo Singapore, it released its security interest over the two loans, the regulator alleges.

At the same time, Falcon agreed to sell its shares in a related company to Maleo Singapore for $93m. To date, none of the $188m has been received.

And 12 days after the March notice from ASIC, Falcon Capital arranged to sell its $94m Chiodo property fund holding.

It has yet to receive any of the $94m and the buyer is, unsurprisingly, disputing the validity of the deal.

First Guardian v Chiodo feud

First Guardian’s relationship with Chiodo soured in 2021, leading to a messy break-up. According to the sources close to the property developer, who is separately under investigation for his role in the Shield Master Fund collapse, Falcon Capital ended up owing him money.

Falcon Capital has a different take.

“The Chiodo Diversified Property Fund was restructured due to its dire financial position,” the minutes of a Falcon Capital meeting in early 2022 said. “It is now deemed that CDPF is a hostile manager and that a full redemption program would be set in train by DA.” The ‘DA’ is assumed to be David Anderson.

The Chiodo fund collapsed last year, right around the time Falcon Capital said it had sold its Chiodo holding to another firm for the pending $94m.

A source close to Chiodo told The Australian the value of the Chiodo holding is likely worthless. Another well-placed and independent source agreed with this assessment.

Over the years, at least $69m of investor money was allocated in companies associated with Anderson, including celebrity chef Scott Pickett’s restaurants and craft brewery Fox Friday. Fox Friday went into administration in April.

Chefs Scott Pickett and Matt Moran with Gordon Ramsay and Janine Allis on the set of Gordon Ramsay's Food Stars.

A further $6.3m was loaned to Merhi’s Cornerstone firm in 2021 but by 2023 that loan was no longer on First Guardian’s books. Merhi disputes that it was a loan and says it was a straightforward marketing payment.

Just over $7.4m was loaned to Merhi’s former colleague Bill El-Helou and lawyer Masihulla Ahmadzay. El-Helou was banned from working in financial services for five years from 2017, while Ahmadzay’s business is in the same building as Merhi’s Venture Egg in Coburg in Melbourne’s inner north.

The loan was to help fund a property purchase in Melton, in Melbourne’s west, but the sale never went through.

Anderson’s property ambitions extended to a $17m development site, 175 Burnley St in Richmond, Melbourne, which the fund acquired in 2021.

The site came with a permit for a nine-level office development.

175 Burnley Street in Richmond, Melbourne, is currently for sale through Teska Carson.

Before the fund collapsed, Anderson took out $12m in loans that were secured by the Burnley St property. The mortgage holder has since put it up for sale. It’s expected to fetch $13m.

‘No one did their job’

Even after ASIC froze Falcon’s assets in February, Anderson was convinced he could turn things around. He was adamant that money was coming in from overseas and investors would get their superannuation savings back.

“The way he was putting it to me was as if these were live, real projects and he just needed more money to come in to complete them,” one source told The Australian after speaking with Anderson as late as March.

“I think their argument is going to be that these were just investments that went bad and they didn’t do anything wrong. But his approach to it and the ease at which he showed me the list of underlying assets tells me that no one did their job (in due diligence).

“No one did their job.”

Know more? Contact Cliona O’Dowd at [e-mail]

Originally published as David Anderson’s life of privilege before Falcon Capital and $450m First Guardian collapse