Roger Munro guilty of fraud after long ASIC hunt
Roger Munro, a self-styled financial whiz at the heart of a scheme whose $60 million went missing during the global financial crisis, has pleaded guilty to three charges for fraud.
The charges were the first time a criminal case has stuck
against Dr Munro, who once operated a trading platform derived from his time in
North Queensland and chatting with poker players.
The charges were unrelated to the initial investment scheme,
which failed in 2009. But Australian Securities and Investments Commission
officers had been investigating subsequent matters involving Dr Munro.
He has always maintained the original $60 million – some 65
creditors were claiming the total reached almost $95 million including alleged
gains on investments – was accessible via a blind trust in North America.
Former investors have said Dr Munro even told them that it was accessible with
his retinal scan.
ASIC had not been able to track down that initial venture
money and twice sent briefs through to prosecutors relating to that investment
scheme. But the Commonwealth Director of Public Prosecutions maintained there
were no reasonable prospects of conviction, so no charges were brought for the
initial venture.
Then in 2017, Dr Munro was arrested on five fraud charges
relating to allegations between September 2011 and April 2014 involving about
$400,000. A three-week trial was scheduled to start in the Brisbane District
Court on Monday.
Moving slowly and now with white hair, Dr Munro, 72, stood
up in court and pleaded guilty to three charges, with others dropped. He was
bailed and has to report to the police station in Casino in northern NSW, where
he is living.
Outside court, when approached by The Australian Financial
Review, Dr Munro said: “Oh gosh.
“Well I’ve been waiting for four years to fight this tooth
and nail. Do you know if I’ll be in contempt if I say what I really think?”
His lawyer then cut in: “Don’t say a thing, Roger. All right?”
Dr Munro, who has a PhD in econometrics, which uses
mathematical and statistical techniques to analyse data, declined to answer
subsequent questions about the original money.
He had recruited investors in the initial venture, including
New York businesspeople, Just Jeans founder Craig Kimberley and everyday
Australians such as a retired engineer and businessowner. Dr Munro was trading
via his platform that used “36 different commodities, currencies, equities,
options, futures or CFDs”.
He later told ASIC officers, according to documents filed in
civil proceedings, that he had in the 1990s been using a satellite dish in Port
Douglas to feed him real-time data and trade the markets. Poker players met in
an adjacent room on Fridays and eventually asked him to have “a flutter”.
He created Delaware-based Starport Futures Trading
Corporation and Surfers Paradise-based RG Munro Futures. He then maintained
that he had earned “big money” for investors in the tens of millions of
dollars.
But the GFC in 2008 prompted three New York investors with
$22 million to try redeeming money, triggering a dispute which Dr Munro
maintained was about an “equitable way to distribute funds”.
After legal action, Tim Michael of Ferrier Hodgson, now with
KPMG, was appointed liquidator to Dr Munro’s Australian company in November
2008. Mr Michael, in an affidavit filed in a civil case, wrote of a “serious
concern the company never in fact generated the returns to investors that are
represented in the quarterly reports and-or that investor funds may have been
misappropriated”.
Dr Munro had said during one public examination in 2009 that
he had not used a spreadsheet or computer program to calculate quarterly
investor returns, instead doing it “by hand”.
In that year, Mark Pearce of Pearce & Heers became
liquidators of Dr Munro’s US business. Mr Pearce had noted that Dr Munro’s
primary method of record keeping of investor funds were what the investment
manager said was hand-written calculations kept in a red ledger book and red
ring-binder.
Dr Munro has always denied any wrongdoing in that venture,
accused ASIC of engaging in a “crusade” and insisted he had done his “very best
by everybody ... because they were all friends and family”.
He maintained that the money existed and could be recovered.
Documents released via Freedom of Information laws show ASIC
officers initially believed in 2009 that it was a Ponzi scheme, writing it was
similar to that of the one run by US fraudster Bernie Madoff which had
“unravelled when [investor] redemption requests could not be met”.
Despite the initial venture not resulting in a criminal
charges, ASIC kept pushing ahead, and the latest charges stemmed from subsequent
allegations.
Dr Munro had also in 2015 consented to declarations of
having contravened the Corporations Act by carrying on a financial services
business without holding an Australian financial services licence in a new
investment scheme started in 2011.
The investment manager appeared to live a comfortable life
but not a high-flying one. He was bankrupted in 2017, saying he had $132 in the
bank and “3 watches (fake)”.
On Monday, Dr Munro, with tie loosened and top collar button
undone, left court and sat at a nearby coffee shop, speaking at times with a
smile to another customer.
Prosecutors told the court that Dr Munro is “facing a jail
sentence”, with Justice Paul Smith to hear sentencing submissions on July 30.
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