Victims of Australia's biggest superannuation fraud have expressed outrage at revelations the corporate watchdog has abandoned an international investigation into Jack Flader, the man allegedly at the centre of the scam.
The abandonment of the investigation ends any chance of charges being laid against Mr Flader, who a court found was the "ultimate controller" of Trio Capital, which bilked investors of $176 million.
Despite the assistance of Hong Kong and other overseas authorities, Australian Securities and Investments Commission investigators were left frustrated after they were unable to establish a breach of Australian law.
It is believed ASIC interviewed Mr Flader several times, assisted by the Securities and Futures Commission of Hong Kong, where he lives. Information was also gleaned from tax haven jurisdictions in which Mr Flader operated.
ASIC is believed to have investigated whether Mr Flader committed a wide range of offences but was unable to mount a prosecution because it could not find enough evidence that he had specific knowledge of events in Australia.
ASIC is facing a Senate inquiry into its performance after criticism of its response to misconduct by financial planners at the Commonwealth Bank.
The Illawarra-based Victims of Financial Fraud (VOFF) yesterday slammed ASIC for what it described as the watchdog's "inability to protect the Australian financial system".
"ASIC has been exposed by a sophisticated transnational financial fraud to have been completely incapable of protecting Australian superannuitants and investors," group spokesman Paul Matters said.
"ASIC appears to rely entirely on second and third party "gatekeepers" to maintain a protective structure around Australian off-shore investing.
Mr Matters also laid the blame squarely at the feet of Bill Shorten, saying the former financial services minister failed to give any effective ministerial direction regarding investigating and prosecuting the perpetrators.
Trio went into administration in December 2009 and its Astarra investment funds were wound up by order of the NSW Supreme Court in March the following year.
Executive Shawn Richard was sentenced to a maximum of 2½ years' jail in August 2011 after pleading guilty to dishonesty charges.
On Tuesday, another man involved in the fraud, former investment manager Tony Maher, also known as Paul Gresham, pleaded guilty to 20 Trio-related charges in Sydney's Downing Centre Local Court.
Maher, 60, of Katoomba, admitted to making false or misleading statements that resulted in his company, PST Management, reaping more than $500,000 in management fees.
He will be sentenced on November 8.