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April 30, 2008

Australian accountants jailed for two years on dishonesty charges

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.

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