A former Gold Coast property developer has been sentenced to eight years in prison for misusing more than $1.3 million in investor funds earmarked for a property development, ASIC reported.
The case comes as ASIC Chair Joe Longo warns of rising super switching misconduct, with “bad actors” luring Australians into risky schemes. For brokers, it’s a reminder to apply strict due diligence when clients access super for property or other investments.
Michael David Steele was sentenced in the Southport District Court on Aug. 7, after pleading guilty in April to four counts of fraud under the Queensland Criminal Code. Steele will be eligible for parole after serving 20 months.
Between May 2016 and February 2017, Steele convinced 14 investors to withdraw funds from their superannuation and savings to lend to EA Invest and Marketing Machine International for a commercial and residential development at Biggera Waters.
Instead, he used the money to buy a house in his wife’s name, pay his son’s university fees, purchase cars and jewellery, fund international travel and entertainment, and gamble online. None of the funds were repaid.
In a media release, ASIC deputy chair Sarah Court (pictured) said, “the sentence imposed by the court demonstrates the seriousness of Mr Steele’s misconduct.”
“When individuals misappropriate funds for personal gain, they not only harm their investors but also undermine the integrity of the financial system, diminishing public trust in investment opportunities,” Court said.
Judge Katarina Prskalo, when handing down the sentence, told Steele: “At all times, you were the controlling mind of the scheme.
“Investors generally expressed their trust in you and as a result did not seek legal advice… the gravamen of your offending is of course the use of money dishonestly for personal expenses when that money had been given to you to invest in a development project.”
Prskalo added: “No sentence I impose can undo the harm caused to investors who have lost their money.”
Steele is now automatically banned from managing corporations until five years after his prison term ends. The case was prosecuted by the Commonwealth Director of Public Prosecutions following a referral from ASIC.
ASIC’s investigation drew on reports from the liquidators of Eastco Developments and EA Invest, with funding from the Assetless Administration Fund. ASIC had already banned Steele from managing corporations for the maximum five years before launching its criminal probe.
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