On 2 April 2020, Mr George Nowak was sentenced in the District Court of South Australia to ten years of imprisonment with a non-parole period of six years and three months.
Part way through his criminal trial, Mr Nowak pleaded guilty to 17 counts of aggravated deception and one count of dishonest dealings with documents (20-043MR). The offences relate to Mr Nowak’s conduct dealing with members of self-managed superannuation funds (SMSFs). The SMSFs were undertaking property purchases offered by companies of which Mr Nowak was a director, including EJ Property Developments Pty Ltd.
The charges against Mr Nowak concerned misappropriation of $1.2 million in SMSF monies. Mr Nowak failed to hold the funds in a designated account and did not apply funds towards the intended property purchases in the period between December 2012 and December 2013.
In delivering the sentence, Judge Sophie David described the offending as of the utmost seriousness. She noted that the fraud had a significant impact on the victims’ lives and was perpetuated in order to fund a lavish lifestyle. Her honour emphasised the importance of deterrence in imposing sentences in these matters.
Commissioner Danielle Press said. ‘Mr Nowak deliberately misled his clients and used their funds for his own benefit. Mr Nowak dishonestly and deliberately breached his clients’ trust. The Court’s sentence reflects the seriousness of this conduct and the impact it had on Mr Nowak’s clients.’
Following his conviction, Mr Nowak is automatically disqualified from managing a corporation for five years.
The matter was prosecuted by the Commonwealth Director of Public Prosecutions after an investigation and referral of a prosecution brief from ASIC.
The charges of aggravated deception contrary to section 139(a) of the SA Criminal Law Consolidation Act 1935 each carry a maximum penalty of fifteen years’ imprisonment.
The charge of dishonest dealings with documents contrary to section 140 of the SA Criminal Law Consolidation Act 1935 carries a maximum penalty of ten years’ imprisonment.
Mr Nowak was the founder of the Charterhill group of companies. The following companies in the Charterhill Group have been placed under external control:
- Lending Solutions International Pty Ltd – liquidators appointed (Andrew Heard and Anthony Phillips of Heard Phillips);
- Nova Real Estate Pty Ltd – external administrators appointed (Andrew Heard and Anthony Phillips of Heard Phillips);
- EJ Property Developments Pty Ltd – receivers and managers appointed (Michael Basedow and Leigh Prior of Pitcher Partners);
- Financial Wellness Pty Ltd – receivers and managers appointed (Michael Basedow and Leigh Prior of Pitcher Partners).
The Federal Court previously froze the assets and restrained the travel of Mr Nowak and his wife following an application by ASIC in February 2014 (14-024MR).
ASIC also banned Mr Nowak from providing financial services in March 2015 on the basis that he was an undischarged bankrupt (15-048MR).