Sydney businesswoman Melissa Caddick faked many documents in the “quite elaborate fraud” she used to swindle trusting investors out of more than $23m, a judge has been told.
She operated 37 bank accounts, sent investors fictitious portfolio evaluations and kept “meticulous” records, Farid Assad SC said in the federal court on Tuesday.
He’s representing the corporate regulator, Australian Securities and Investments Commission, in a hearing related to trying to recover some of the millions said to have been misappropriated.
The 49-year-old went missing hours after Asic executed a November 2020 search warrant at her eastern Sydney mansion.
More than three months later, the self-styled financial adviser’s decomposed foot washed up on a remote southern New South Wales beach.
Between October 2012 and November 2020, she convinced at least 72 investors to provide her and her “sham” financial services business, Maliver, with just under $30.2m, Assad said.
She returned $8.5m, but there was now a deficiency of assets to liabilities of between $15m and $23.7m.
“Existing clients extolled the virtues of her and would then refer other clients,” he said.
“Ms Caddick built up a sizeable and loyal client base, and befitting of a successful businesswoman were the trappings of wealth, real estate in Sydney’s eastern suburbs, luxury motor vehicles, designer clothing and jewellery,” he said.
“Unfortunately Ms Caddick’s success and the financial services business were all a facade.”
He submitted her successful business was an elaborate front for her Ponzi scheme, involving a repeated pattern.
She would convince potential investors of her “prowess in creating wealth”, interview them and advise them of an investment strategy.
She said she was setting up accounts with CommSec, a well-known online share trading facility.
“She also managed to convince about half of them to establish self-managed superannuation funds to help facilitate the investments.”
Her clients would transfer their money to her and later to her alter ego Maliver, incorporated in June 2013, for investment purposes.
“Unfortunately she was misappropriating these monies for her own use” and maintained her deception by sending the investors fictional portfolio evaluations, Assad said.
Asic has managed to obtain many hundreds of pages of these evaluations, but not one was a genuine one from CommSec, he said.
Caddick used the money to buy real estate, motor vehicles, artworks and jewellery, he said.
She provided each of the 72 investors with fraudulent documents including forged CommSec material as part of her “elaborate fraud”.
He referred to “the meticulous nature in which Ms Caddick kept records which is quite uncommon I say for activities of this type” as he took the judge through a particular case.
“This is certainly one of those examples where Ms Caddick has been very thorough and very diligent in maintaining records.”
He deemed the scheme to be “inherently fraudulent”.
Bruce Gleeson and Daniel Soire, of Jones Partners, were appointed as provisional liquidators of Maliver and receivers of Caddick’s property in December.
The hearing continues before Justice Brigitte Markovic.
