Gambling Addict Jailed Over $16 Million Scheme

Gambler jailed over $16 million investment scam
DANIEL HURST
October 17, 2009 - 11:04AM
A "compulsive" gambler whose high-risk, unregistered investment scheme left mum and dad investors $16 million out of pocket has been jailed for 13 years.

The Brisbane District Court yesterday heard the promoter of the money-losing scheme, Brett Tony Best of Middle Park, had also faked loan applications to borrow $4.3 million as he fed his gambling addiction.

Westpac, National Australia Bank and Bank West were among the eight lenders defrauded when the trucking industry enthusiast sought finance to buy 45 non-existent prime movers and semi-trailers, the court was told.

The 40-year-old married father of three yesterday pleaded guilty to eight fresh fraud charges over the truck loans, following earlier guilty pleas on eight federal charges for running and dishonestly profiting from an unregistered managed investment scheme.

Commonwealth prosecutor David Kent told the court the company he headed, Arafura Equities Pty Ltd, promised investors 5 per cent profit per month, or 60 per cent annually, to be derived from futures market trading.

Some 200 clients, most of whom lived in South-East Queensland, entrusted their money to the company between 2003 and 2005 until the business was handed over to liquidators, Mr Kent said.

Investors dispensed with more $17.8 million in that time but were still owed $16.4 million when the company was wound up with just $3 million in assets, a report by the receivers found.

Best knew the company was insolvent in May 2005 but continued to take on clients until just before liquidators were appointed in October that year, the court was told.

He also "ignored" the law about registering the investment scheme.

Mr Kent described the crimes as "serious, systematic and deliberate", adding they appeared to have been committed "for no other motive than personal gain".

He said as investors started to demand the cash they were owed, a fellow promoter of the scheme, Patricia Jenkins, who was jailed earlier this year, started handing over money from new clients to the older ones.

"She was doing a bit of a Robin Hood job herself," Mr Kent said.

Best's charges included dishonestly gaining a financial advantage for himself worth $30,000 and six charges of dishonestly gaining a financial advantage for Arafura Equities worth $330,000, amounts that reflected cash taken when the company was already insolvent.

The court also heard yesterday details of his earlier fraudulent activities involving the use of fake or modified truck vehicle numbers to justify banks loans which he "frittered away" betting on horse racing.

But the semi-trailers and prime movers he supposedly purchased either did not exist, had already been written off or were unregistered, state prosecutor Dennis Kinsella said.
Best, the son of a truck driver, paid off about $300,000 of the debts, but millions had been funnelled into his own accounts, he said.

Defence lawyer Eoin Mac Giolla Ri said the common thread than ran between the two activities were his client's "compulsive gambling", pointing to one month in 2001 in which more than $100,000 was gambled.

But Best genuinely believed he would make money for investors on the futures markets, he said.

"Mr Best suffers from a chronic gambling addiction, a very powerful gambling addiction which drove the offending ... because he needed money to gamble."

Judge Katie McGinness told Best his investment scheme had taken a heavy toll on "mothers and fathers, brothers and sisters" and other community-minded people.

"You have managed to ruin their lives," she said.

"Some of them have suffered a breakdown in their relationships with their family and friends."
She imposed a 13-year jail term, but he will be eligible for release after four years and four months as a bonus for his guilty pleas.

He has already served 158 days in custody