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Australia: Fraud charges dropped after witnesses become "unavailable."

Nigel Morris-Cotterill

In a criminal prosecution brought by the Australian Securities and Investment Commission, ASIC, the financial regulator, two out of five criminal charges brought against an alleged fraudster were dropped because the witnesses in those cases became "unavailable." The charges related to conducting an unauthorised financial services business and to soliciting moneys which were used improperly.

Nevertheless, the accused has pleaded guilty to the remaining three charges at the door of the court before his trial commenced yesterday.

It's a long and convoluted story across years and jurisdictions as well as various enforcement agencies.

This long running case began more than six years ago. In the Aussie winter of 2015, Dr Roger Gareth Munro and his wife, Mrs Kathleen Susan Munro, were subject to civil proceedings brought by ASIC, the primary purpose of which was to obtain an injunction to prevent Dr Munro from continuing his activities, begun in August 2011, of operating an unlicensed financial services business in Australia.

ASIC's additional allegations were quite startling:

ASIC alleges that since August 2011, Dr Munro has, with the assistance of Mrs Munro, operated an unlicensed financial services business in Australia. ASIC also alleges that:

- Dr Munro continues to tell investors he is generating profits from trading, when documents obtained by ASIC identify that Dr Munro appears to have lost money from trading in Australia.

- Dr Munro has raised over AUD1.5 million from investors, friends and family for trading purposes, but has failed to keep any, or produce any, books or records to ASIC in relation to this fundraising.

- a significant portion of funds which have been provided to Dr Munro for trading have ultimately been transferred to a brokerage account in Mrs Munro's name, for trading – traded funds are then redeemed and transferred into another bank account held by Mrs Munro.

ASIC sought a range of orders that, basically, required the Munros to cease and desist from their conduct and to restrain assets from disposal or waste. ASIC's application came before the Supreme Court of Queensland on 7 August 2015 but the Munros neither appeared nor were represented.

The Court made all of the interim orders sought, which:

- restrain Dr Munro and Mrs Munro from carrying on a financial services business in Australia, without holding an AFS licence
- restrain Dr Munro and Mrs Munro from disposing of or dealing with investor funds
- restrain Dr Munro from operating certain bank accounts and trading accounts
- restrain Mrs Munro from providing any aid or assistance to Dr Munro in carrying on a financial service business
- restrain Mrs Munro from allowing Dr Munro to use or operate certain bank accounts in her name
- direct Dr Munro to provide ASIC with information about his fundraising activities and the location of investor[s'] funds.

The case was listed for directions, a legal term meaning that the Court will set out how the case will proceed. The Munros didn't attend. It was adjourned. Again, they did not attend. Again it was adjourned and the case was listed for hearing. Again, they did not attend and again it was adjourned but for only a few days. The trial began on 12 November 2015 and both the Munros appeared in person.

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