Another Australian financial planner fraud has occurred.
Brad Thomas Sherwin from Brisbane was sentenced in the Brisbane District Court to 10 years jail with a non-parole period of four years for defrauding his 39 clients of close to $10 million.
Mr Sherwin pleaded guilty in September 2017 to fraud charges relating to an investment collapse. He was also convicted of breaching his duties as a Director.
Mr Sherwin was the principal of Sherwin Financial Planners and director of related companies including Chairman of Wickham Securities. Both folded in 2013 with a combined $60 million owing to creditors.
He gave financial advice and assisted clients to establish their own self-managed super funds.
On 26 occasions, Mr Sherwin made transactions using his clients’ investment money, without their knowledge.
A number of his clients told the court of the negative impact on their lives and in particular the stress as a result of the fraud.
Retirees are particularly vulnerable to financial planner fraud as they invariably trust them with their life savings. Those financial planners that are unscrupulous often play on the retirees lack of financial acumen with investment products and the existing laws.
The results are often devastating and have led to marriage breakdown, loss of financial independence and in some cases, suicide.
Recent cases of financial planner fraud
Just some of the recent examples of financial planner fraud in Australia have included:
March 2017 – A Tasmanian financial planner, Patrick Simon Mitchell, stole more than $2.3 million from a client to fund his own lifestyle was jailed for eight years. He stole the money in 25 separate transactions between September 2011 and May 2015. The client inherited money from her mother and had more than 40 years of savings from her nurse’s wage.
November 2016 – Former financial planner Darren John Wise was sentenced to seven years in jail with a non-parole period of 20 months. Mr Wise forged power of attorney documents so he could use clients’ money as collateral to open four margin loan accounts between 1997 and 2006.Â He used the securities of five groups of customers, most of them elderly. He drew down $1,070,700 from the loans with St George Bank. Some rr Wise’s clients had started questioning him in 2014 after he could no longer pay dividends on the securities they had trusted him with.
April 2016 – A Former ANZ Bank financial adviser, Kenneth David Drake, was jailed for stealing almost$1 million from two elderly clients. Mr Drake took $925,085 from a 94-year-old woman and $15,850 from a 71-year-old man. Both were clients he had known for more than 20 years. Mr Drake had complete control over the finances of both victims and between April 2009 and December 2015 he forged signatures to move money from the two clients’ accounts to his own on a total of 64 occasions. His crimes were discovered when the Public Trustee took over the woman’s finances in August 2015.
February 2015 – A New South Wales financial planner, Melinda Scott, was sentenced to at least three years and 10 months in jail for stealing $6 million from clients to pay for renovations on her home, holidays and private school fees. From August 1982 to April 2012 Scott, from Lilli Pilli in Sydney’s south, worked for financial services companies including Roach Graham Scott Pty Ltd, Financial Wisdom Ltd and Millenium2, an ANZ subsidiary. In December 2013, Scott pleaded guilty to seven charges including obtaining money by deception. She defrauded 129 of her clients.
For further information about advice on choosing a financial planner or advisor that suits your needs, refer to the Australian Securities & Investments Commission Moneysmart website.
Should you require assistance with complex financial investigations, please contact Warfield & Associates.