The so-called mastermind of the scheme to rob Australian investors of their savings, Jack Flader, defended himself against the allegations made by Australian Securities and Investments Commission when they surfaced four years ago, but his account fell on deaf ears.
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He denied having owned Trio Capital or any ‘‘Astarra entities’’ and said allegations against him were all made by Shawn Richard - the man ‘‘who has admitted to a nearly seven-year program of dishonest conduct and lying to his friends, colleagues and clients’’.
ASIC later found there was insufficient evidence to prove Flader breached Australian laws.
In fact it appears the direct allegations against Flader all come from Richard.
While Richard mentioned Flader 99 times in his statement of facts, recorded by ASIC investigators, Flader and his ‘‘controlled funds’’ do not appear to be referred to anywhere else.
There is no mention of Flader in the orders initiated by ASIC against other directors, players, and related funds.
Flader, who at the time of the fraud lived in Hong Kong but is now believed to be living in Thailand, issued a statement in response to ASIC’s initial investigations into the Trio collapse.
His statement, dated March 5, 2010, accuses Richard of telling lies about him and questions why ‘‘the focus seems to be on me rather than Mr Richard’’.
Here is a list of what Flader says are lies about him, and his responses.
Allegation: Flader pocketed all the superannuation funds personally.
Flader: Every dollar sent to a Trio fund called Astarra Strategic did not end up in my pockets. I have provided evidence of the use of such money to the regulators.
Allegation: Flader is a Hong Kong lawyer.
Flader: I am not and never have claimed to be a Hong Kong lawyer. A simple search of the Hong Kong Law Society would have confirmed the same.
Allegation: Shawn Richard was a puppet for Jack Flader.
Flader: I was not and never have been Mr Richard’s boss. Mr Richard was my client, instructed me in relation to his personal and business matters and ultimately was in control of the relationship.
The money sent offshore ... was used to buy shares in offshore funds, which thereafter acquired shares of publicly quoted and listed companies. Every dollar did not end up as cash with me.
Allegation: The money was swapped for virtually worthless US shares owned by Flader and the profits returned to Mr Flader’s Australia business as loans - making it a Ponzi scheme.
Flader: The fact is those shares were purchased and those shares were held in the name of each offshore fund. I did not own shares purchased by the offshore funds. To the extent such information was available, I have provided evidence of the owners of the shares to the regulators.
Allegation: The offshore funds were all owned and controlled by Jack Flader.
Flader: I do not and never have owned any of the offshore funds. Any involvement I had with these funds was pursuant to clients’ instructions. I can obtain written confirmation from the relevant fund managers if necessary.
Allegation: All offshore funds were valued by Flader.
Flader: Richard and [Matthew] Littauer, along with the fund manager clients, established the net asset valuation methodology.
As confirmed by the fund manager, clients and various staff who worked with me over the years, Richard was actively involved in the determination of the net asset value.
Allegation: Jack Flader was born and raised in Brooklyn.
Flader: I was born in New Jersey where I lived until I was 14, then moved to Florida until I was 22 when I moved overseas.
Allegation: Jack Flader is the ultimate controller of Trio Capital.
Flader: I do not own and never have owned Trio Capital or any Astarra entities. Mr Richard via his 100 per cent ownership of Bella Donna, owned Trio Capital/Astarra.
I do not recall ever meeting, either socially or professionally David Andrews - former Trio board chairman. I visited Richard at the offices of Astarra two times in the last seven years and I had absolutely no involvement in its business. I always understood Mr Richard controlled Trio Capital and all Astarra entities.
Allegation: Flader owned and controlled Wright Global Investments.
Flader: I do not own and never have owned Wright Global Investments.
Mr Richard via his 100 per cent ownership of Astral, owned Wright Global Investments. I have never been to the offices of Wright Global Investments and I had absolutely no involvement in its business.
Do you know more? Email cmardon@fairfaxmedia.com.au
