Convicted fraudster James Lovell was sentenced to 12 years jail yesterday in the Brisbane District Court for operating a $15 million Ponzi scheme disguised as an investment hedge and ripping off more than 200 investors.
Lovell had pleaded guilty to three counts of fraud and four counts of forgery, admitting he had spent millions of dollars on luxury cars and parties.
Describing Lovell’s behaviour as “callous”, Judge Robert Reid sentenced Lovell to 12 years’ jail, although he will be eligible for parole after four.
According to the Australian Financial Review, the court heard that in 2008 even as his companies began to collapse, he was still signing up new investors. These same investors reportedly heckled the 31-year-old as he left court yesterday.
Lovell was accused of running the Ponzi scheme using his Mirtna Capital group of companies as a front. While he actually took $15.5 million from investors, only a portion of this was actually put into various high risk stocks. While some investors received returns, these were paid for by the funds received from new investors.
“It was a scheme that was, by its very nature, doomed eventually to fail,” Reid reportedly said. “Your conduct throughout has been callous and despicable, and deserving of a heavy sentence.”
Lovell’s activities were uncovered as early as 2009, when the Australian Securities and Investments Commission moved to wind up his Mirtna Holdings group. At that time, he was already well-known in Brisbane’s social scene, having formerly attempted to sponsor the Queensland Rugs rugby team. Unbeknownst to his investors, Lovell had not been granted a licence from ASIC to operate.
Reports indicate Lovell also spent the money taken from investors on a luxury apartment on Adelaide Street, and put money into the Brisbane Fashion Festival.
The court also heard that while he raised over $36,000 for cancer charities at a Hilton investors” dinner, that money was never received by the charities themselves.
Patrick Stafford is a freelance journalist and a former deputy editor of SmartCompany.
