Australian accountants jailed
for two years on dishonesty charges

Two Australian accountants, including a partner at a former DFK
Australia member firm, have been sentenced to time in prison.

The Australian Securities and Investments Commission (ASIC) said
James Stanley Phillips, a partner of the former accounting practice
Landy & Company DFK, was sentenced to two years in prison and
will serve at least 12 months in jail after pleading guilty to two
counts of dishonestly using his position as a director with the aim
of gaining an advantage for himself and someone else. The offences
relate to the payment of about A$583,000 ($480,000) to creditors of
Kings Creek Winery between May and October 2001.

Ian Francis Cole, who was a consultant for Landy & Company DFK,
was sentenced to 20 months’ imprisonment and will serve at least
six months in jail after pleading guilty to two counts of
dishonestly using his position as company secretary with the
intention of gaining an advantage for himself and someone else. The
offences related to the payment of about A$375,000 to creditors of
Kings Creek Winery between May and October 2001.

The convictions follow an investigation by ASIC into the
liquidation of the Fyans Street Unit Trust. Between May and July
2001, just over A$1 million was received from 13 investors in the
Fyans Street Unit Trust, which was to be invested in the purchase
of an office building in Fyans Street, South Geelong in the state
of Victoria.

ASIC alleged that almost as soon as investors’ funds were received,
Phillips and Cole began to disburse them for other purposes
including Kings Creek Winery. ASIC alleged that all the funds were
re-directed without proper documentation or security for repayment
and were never repaid.

Phillips was a director of Terra Firma Property Management and
Kings Creek Winery and Cole was the secretary of Terra Firma
Property Management and the chief promoter of the Fyans Street Unit
Trust.