SMSF Fraudster loses appeal

The Court of Appeal of Queensland has rejected property tycoon Craig Gore’s appeal against his conviction of six charges of fraud relating to SMSF property fraud of almost $350,000.

Mr. Gore was arrested in 2017 and charged with 12 counts of fraud in relation to funding that he obtained from SMSF investors. ASIC alleged that he convinced investors through his role at Arion Financial Pty Ltd that they could invest in debentures. He is also alleged to have then promised the investors a guaranteed return, high returns over a short period of investment. He was subsequently found guilty of six charges of fraud in Oct 2020. In Nov 2020, Mr. Gore was sentenced to 5 years in prison. This was based upon the evidence demonstrated that Mr. Gore had continued to secure funds from Self Managed Superfund investors after Dec 2013 without disclosing to them that there wasn’t an appreciable likelihood of them making a return on their investments because Arion was in a poor financial state. A major element of the culpable judgment was based on evidence of Mr. Gore’s awareness that the business owed a large debt to the Australian Tax Office (ATO) as he had contacted them about arranging monthly payments for paying off the substantial debt the business had gathered.

In the appeal, according to court documents, Defence argued that Justice Byrne made a mistake during his assessment of the Australian Tax Office’s debt evidence. The appeal appeared to focus around the main argument that the debt repayment arrangement requested by Mr Gore was a “mere preference to make payment by instalment” rather than evidence that suggested Arion was unable to pay the debt. However, Justice McMurdo rejected this, stating that there had been a steady increase in the ATO’s debt over 6 months which could only be credibly explained by the fact that Arion was unable to pay this debt as it was falling due.

“It is essential to understand the rationale of the court as to why the appellant and the ATO have had an important conversation in evidence of the proceedings. It was not just at that moment that the Arion Group or the Arion businesses went bankrupt. Rather, this incident was a convincing demonstration of real knowledge of the financial situation of businesses that existed for a while at the latest.”

“The importance of this debt has to be understood also from the circumstances, clearly proved by the evidence, of the absence of cash to pay the debt, the absence of any credit facility from which the required funds could be obtained and the absence, at that time, of any stream of income from what had been intended to be the core business of the Arion companies.”

Mr. Gore faces three further counts of acting in the management of three corporations whilst being disqualified from doing so. Every charge of acting in the management of corporations whilst being disqualified from doing so carries a maximum penalty of 1 year imprisonment or up to a $8500 fine.