Hazel Bucello, sole director of Victorian Finance Broking Services (VFBS), has been jailed for at least two and a half years for running an illegal Ponzi scheme.
The County Court of Victoria sentenced Bucello to four years and nine months jail time following an investigation by ASIC into VFBS, which collapsed in June, 2006.
ASIC alleged that between 2004 and 2006 $2.5 million was invested in VFBS by five individuals for the purpose of providing bridging finance to some of the firm's other clients. The funds were invested on the understanding the individuals involved would receive a return of between 4 and 5 per cent per month.
ASIC alleged that VFBS was running a Ponzi scheme and that investors' funds were initially paid out as returns.
Furthermore it alleged that the majority of the money invested was used to fund the financial obligations of VFBS and Bucello's own purposes.
Bucello pleaded guilty to five counts of obtaining property worth almost $2.4 million by deception, and one count of obtaining a financial advantage by deception worth $141,800.
Some interest payments were made to early investors but none of the capital invested was repaid. The Court also ordered Bucello to pay investors $1,207,537 in compensation.
The case was prosecuted by the Commonwealth Director of Public Prosecutions.
