Former adviser sentenced for $9m fraud

According to an ASIC statement, Thanh Tu, a former Patersons Securities employee, had dishonestly induced 18 individual investors to invest $9 million in fictitious funds.

These included the 'Paterson Securities – API Protected Fund' and the 'Patersons Securities Capital Protected Fund', according to ASIC.

Mr Tu did not invest the money into secure investments as directed but instead redirected the funds, through a number of different accounts, to a personal trading account held by him with another organisation.

He then, for his own purposes, traded the money in risky investments and ultimately lost a total of $8,120,073.53 of the original capital invested. A total of $959,000.00 was recovered, ASIC said.

During the period concerned, Mr Tu made "interest" payments to some of the clients, which were funded by money provided by other clients. He gave clients a variety of false documents to conceal his offences, including false certificates of investment.

ASIC commissioner Greg Tanzer said Mr Tu had "deliberately and systematically" breached the trust of his clients on a large scale, resulting in the loss of millions of dollars.

"The actions of Mr Tu were deceitful and calculated and undermine confidence in the financial advice industry. His lengthy jail sentence should send a strong message that such conduct will not be tolerated by ASIC or the community," he said.

Mr Tu will be eligible for parole after serving three years, taking into account time already served in custody.