ASIC bans adviser for $3.6m fraud

by |

ASIC has obtained court orders permanently banning Melinda Scott from providing any financial services, after she defrauded clients of more than $3.6 million over eight years.

She has also been disqualified from managing corporations for 25 years.

Scott, of Lilli Pilli, was the sole director of Roach Graham Scott Pty Ltd (RGS), which has now been permanently restrained from carrying on a financial services business or providing a financial service by the Supreme Court of New South Wales.

According to the court’s findings, between 9 February 2004 and 27 April 2012 Scott:

  • repeatedly and persistently engaged in dishonest conduct when providing financial services;
  • obtained $3,632,759.46 from 56 separate clients;
  • generally used this money for her own personal benefit knowing that this was not in accordance with the clients’ instructions;
  • falsely told some clients their money had been invested in accordance with their instructions and was making returns.

Scott’s misdemeaners took place while she was an authorised representative of ANZ-owned Millennium 3 Financial Services Pty Ltd. Scott’s authorisation was revoked, and ASIC obtained court orders preventing her from carrying on a financial services business, In May 2012.

ASIC’s investigation into Scott’s conduct is ongoing.

How can bad apples be weeded out? Join the debate by commenting below.

  • Conservative accountant on 5/12/2012 9:27:37 AM

    Hi WP... how many authorized reps is that in the last year? Who keeps track? Trust dwindles once again. Can the clients get any funds back?

  • GAB on 5/12/2012 9:40:43 AM

    You can't legislate or protect from utter fraud and embezzlement. Where there is money, there is fraud. Plenty of crooked accountants and bankers out there......And politicians.

  • Conservative financial adviser on 5/12/2012 9:41:49 AM

    Hi Conservative accountant. Its probably a similar number now to accountants who have been convicted of fraud. For example it was only a few weeks ago that Lynette Liles (an accountant) was convicted and sentenced to jail for over 8 years. Or maybe Rajina Subramaniam, or Robert Agius, or Kevin Zerafa, or ...

  • Merv Gay on 5/12/2012 9:58:54 AM

    Yes, well all I can keep commenting is that as soon as we have that little piece of paper to sign declaring we will all act in the best interests of our clients, then all of these criminals in our midst will cease frauding. Then we will all send a letter of supreme thanks to that Financial Canberra Wizard Bill Shorten. Gee......... Merv Gay

  • grant on 5/12/2012 10:09:48 AM

    the only problem of best interest who decides if client is given an soa and given time to go over it say a couple of days how can you go against the adviser if they have done what you requested. fraud is fraud and these people shoud be punished however if the adviser has done what at that moment in time is in there opinon the best interest why shoiuld they be punished

  • Alex Warren on 5/12/2012 10:10:02 AM

    Like i have said for a while. Many of the current and proposed regulations do little to improve the value of advice. The good guys get tied up in red tape and we have to put the cost of advice up. The fraudsters are probably providing advice for little or no cost having the ability to undercut. Instead of wasting millions in regulation i think it would be better in policing. Most financial advisors i would think would be happy to dob in a crooked financial advisor.

  • Elio Centofanti on 5/12/2012 10:24:08 AM

    Yes Conservative accountant I agee with Conservative Financial Adviser, something about people in glass houses and stones comes to mind. Fraud existis in every profession unfortunately. The main thing is it gets picked up and the idiots get weeded out.

  • Josh on 5/12/2012 10:38:10 AM

    GAB - and the Vatican Bank.

  • MGFCG on 5/12/2012 10:53:36 AM

    Gentlemen, we need a better auditing system to reduce the number of incidents but I agree money and greed bring out the owrst in many professions so lest not forget all the good that advisors do when they recommend financial strategies....

  • Mel James on 5/12/2012 11:39:54 AM

    Accountants and financial planners stop snipng at each other, unfortunately there are rotten apples in every barrel, get on with improving the professions.

  • Conservative accountant on 5/12/2012 11:57:42 AM

    Hi Guys not sniping but asking legitimate questions and highlighting issues. All a bit of a problem and they all have to be weeded out somehow.

  • Peter Fowey on 5/12/2012 12:50:27 PM

    Hello electronic world, the system is so designed that fraudsters are having a hay day,thank goodness asic are being active and clearing out these bad apples as and whenever they can, but i do wish accountants and others would stop stiring the pot, as an adviser i think i might have to compile a list of public and cpa accountants that have been banned - jailed etc , prehaps i should as best practice and in the intrest of best advice to all my clients pass this info on . No thats thats just being childish, and i wont play that game so why are some of you insisting on playing it, get over yourselves , just be greatfull that these idiots are banned, start promoting yourselves as professionals , tell the world how long youve been in the industry, and how many happy content clients that you look after, some of your clients may , if you ask, be happy to provide you with testimonials, and my final point is , well done ASIC ! and thank you for cleaning these people out , (from various industries) merry christmas everyone , and may your god be with you

  • SS on 5/12/2012 1:46:12 PM

    I'm glad she got caught, but the timeframe of 8+ years concerns me. That's a long time to be "repeatedly and persistently engaged in dishonest conduct" without raising a compliance flag. Apart from the ban, any news as to whether there are criminal charges, and potentially jail time, pending?

  • SS on 5/12/2012 1:48:15 PM

    @ Alex Warren on 05 Dec 2012 10:10 AM: Here, here! Red tape ties the hands and efficiency of those of us doing the right thing, and the cowboys it's meant to protect people from just simply don't comply so aren't affected.

  • Paul on 5/12/2012 5:02:23 PM

    My understanding is that ALL clients are having their missing funds and interest paid to them. Thankfully the adviser was with a large institution and Millennium3 and ANZ Bank are making good on all funds missing. Compliance only works when the adviser lodges the business and it is trackable.

  • Pat on 6/12/2012 1:43:58 PM

    @Conservative Accountant: fair question: how much money was involved Arther Anderson's activities with Enron, WorldCom, etc.?

  • Pat on 6/12/2012 1:55:23 PM

    @Paul. Yet, in 8 years ANZ was not able to identify such activity by this person?

  • Chris on 6/12/2012 6:04:20 PM

    ANZ compensates the clients - all very good but are they using insurance proceeds (so premiums rise for honest advisers), or they use bank money so bank customers are out of pocket. Honest people lose out either way. Surely this should have been detected earlier!

WP forum is the place for positive industry interaction and welcomes your professional and informed opinion.

Name (required)
Comment (required)
By submitting, I agree to the Terms & Conditions