Following a two-week trial in the County Court of Victoria, former accountant, Douglas Johnston, was today sentenced to 6 years imprisonment for defrauding investors of approximately $815,000.
Mr Johnston acted with his wife Maureen Johnston to secure funds from investors, lying about how the money would be used. During the period January 2010 to November 2013, investors deposited money into a bank account of Small Business Management Pty Ltd on the basis that they would make returns on their investments. In some cases, Mr Johnston set up self-managed super funds for investors, with the promise of managing the money on their behalf. The funds were then:
- withdrawn as cash by the Johnstons;
- used to repay the Johnstons’ credit cards debts;
- transferred to another account in the name of Maureen Johnston;
- used to pay new investor deposits in a ponzi-style operation.
In sentencing, Her Honour Judge Wilmoth stated that Mr Johnston’s actions were ‘entrenched in dishonesty’ and ‘showed a callous disregard for the trust placed in you (Mr Johnston)’.
‘Mr Johnston, and his wife Maureen, gained the trust of, and deliberately misled their investors, many of which they met through the Collingwood Football Club. The couple went on to use investor funds for their own benefit. The sentences imposed on Maureen, and today on Douglas, demonstrate the types of outcomes ASIC, with the Commonwealth Director of Public Prosecutions, can achieve. This type of behaviour will not be tolerated by ASIC and will be pursued through the Courts,’ said ASIC Deputy Chair, Daniel Crennan, QC.
The court set Mr Johnston a non-parole period of 3 years.
The Commonwealth Director of Public Prosecutions prosecuted the matter following a referral of a brief from ASIC.
Maureen and Douglas Johnston were originally charged together and on 20 December 2017, Mrs Johnston pleaded guilty in the County Court of Victoria (15-397MR) and was sentenced to five years and six months imprisonment (18-391MR).
Mr Johnston was found guilty in the County Court of Victoria on 8 May 2019 (19-107MR).