Advertisement

Court told of scammer’s $3.5 million investment swindle

Photo: Getty

An American self-described business tsar was not aware his company required an ABN or tax file number to operate as he swindled millions from almost two dozen investors.

Richard Emile Ayoub defrauded 21 investors out of $3.5 million after promising to invest their money in overseas bonds but instead used the money to buy Bitcoin.

Ayoub said he wasn’t familiar with Australian accounting or tax laws when asked how he was able to raise capital despite his company not having an ABN or tax file number.

Judge Robyn Tupman cast doubt over his response in Sydney’s Downing Centre District Court during a sentencing hearing on Friday.

“There are young people today setting up ABNs for training jobs that make $40,” she said.

Ayoub said he was offered a job by long-time business partner Jaswinder Singh, a UK citizen living in Dubai, whom he met in 2007.

Under the deal, investors would pay money to Ayoub’s Radhanite company bank account, believing it would be used to invest in bonds overseas.

He would transfer that sum to his personal bank account, keeping five per cent of the proceeds, with the remaining 95 per cent used to purchase Bitcoin to send to Mr Singh.

The American said the arrangement was done by a handshake and no contract was supplied.

‘Something was fishy’

“In hindsight, something was fishy,” he told the court.

Ayoub claimed he was financially desperate at the time of offending.

“When I came back from a Europe trip, I came back to a country locked down. I couldn’t get a job and had to get on JobSeeker to pay bills,” he said.

He also owed family and friends $2 million.

Despite this, he was living in a $4500-a-week home at Woolloomooloo’s Finger Wharf and had spent $18,000 on Gucci products.

Crown prosecutor Burton Ko alleged the day before the first offence, Ayoub had received $35,000 from a friend to invest on his behalf.

Bank records showed the accused withdrew $1000 the same day.

“You weren’t motivated by desperation, you were motivated by greed. You had more than $1000 to take out from that account on that day,” Mr Ko said.

Ayoub believed investors were sending their money to be invested in cryptocurrency despite some transaction descriptions sent to the American’s account reading, “three-year bond” or “bond purchase”.

“I did not pay attention to the transfer reasons which was part of my negligence,” Ayoub said. “I just looked at the balance.”

The arrangement between him and Mr Singh netted Ayoub more than $180,000 over a six-week period.

“No one makes $30,000 a week by just taking something into your account, well not legitimately anyway,” Judge Tupman said.

In sentencing submissions, Mr Ko argued Ayoub had been motivated by pure greed and his crimes displayed a high level of recklessness.

“These offences are hard to detect so there needs to be a degree of general deterrence,” the prosecutor said.

‘A mere conduit’

Defence lawyer Richard Pontello argued Ayoub’s offending was below the level of mid-range seriousness.

“His role was as a mere conduit to a fraudster,” the defence said.

Ayoub was arrested in November 2021 following an eight-month investigation by NSW Police into the scam.

He pleaded guilty to two counts of recklessly dealing with proceeds of crime and was refused bail in February over concerns he would flee the country.

Ayoub was convicted of similar crimes in the US more than 20 years ago.

He will be sentenced on December 15.

-AAP

Advertisement
Advertisement
Stay informed, daily
A FREE subscription to The New Daily arrives every morning and evening.
The New Daily is a trusted source of national news and information and is provided free for all Australians. Read our editorial charter.
Copyright © 2024 The New Daily.
All rights reserved.