In one of these stories, Richard told investigators that he was not the mastermind but simply a puppet who danced to the tune of a shady American based in Asia, Jack W. Flader.

That was the story which became officially accepted as the truth about who controlled the fraud.

But, the source says, Richard originally told investigators of the Australian Securities and Investments Commission a very different tale: that he was the man who called the shots at Trio.

That was the story he told ASIC before the fraud was completely exposed.

It was only later, when the fraud was exposed and Richard was in the hot seat, that he changed his tune and dumped it all on Flader.

Although all the evidence implicated Richard, not Flader, authorities accepted the revised story that Richard was not the mastermind.

It became the foundation of the official account: that under Jack Flader’s instructions, Richard funnelled investors’ money out of Australia where it vanished into a murky network of companies which Flader controlled overseas -- beyond the clutches of Australian authorities.

If Richard had been convicted as the kingpin, authorities like ASIC could not have claimed the fraud occurred overseas, beyond their jurisdiction.

And Richard could have been jailed for decades.

Instead, he served two and a half years in minimum security.

To this day, ASIC describes the fraud as a ‘‘transnational crime’’ that was masterminded and operated from outside Australia.

This official story is described in a 32-page Statement of Facts dated December 3, 2010, which was recently made available under Freedom of Information laws.

The Statement of Facts details various offences committed by Shawn Richard. It is essentially his confession.

Every page is signed by him, and it has been accepted as the truth by regulators, courts, the Parliamentary Joint Committee, as well as many individuals who were ensnared in the scam.

According to the Statement of Facts, Richard was operating under the ‘‘ultimate control and instruction’’ of Jack Flader ‘‘at all times’’.

The Statement of Facts is based on ASIC’s interviews of Richard, which have never been made public.

But a source, whose knowledge and integrity are beyond question, has told the Mercury that Richard gave ASIC two conflicting accounts of who controlled Trio.

Initially, Richard told investigators that he made all the key decisions at Trio himself and Flader was merely a hired gun, the source said.

Subsequently, investigators collected a pile of evidence that incriminated Richard as the mastermind behind the fraud, the source said, and this evidence corroborated his original claim that Flader was no more than a lackey, a fixer who did what he was told.

The evidence included company documents that Richard signed, emails he sent, and transactions he authorised.

It was only when investigators prepared to present this evidence to Richard that he suddenly began pointing his finger at Flader, the source said.

The story that Flader was the organ grinder, and Richard the monkey, is based entirely on Shawn Richard’s own word and does not fit the other evidence ASIC possessed.

The documentary evidence that ASIC unearthed implicated Richard, not Flader.

Nor was Flader implicated by anyone else that ASIC interviewed.

ASIC had no independent evidence to implicate Flader and was never able to obtain any.

Eventually, it would stop looking, effectively exonerating Flader and throwing more doubt on the credibility of Richard and the official version of who orchestrated the fraud.

Regardless of who gave the orders, it was Richard, not Flader, who authorised the fraudulent transactions and signed the fraudulent documents.

This must have been the case because it was a practical impossibility for Flader to do it.

He lived overseas and had no legal signing authority within the Australian companies.

The Statement of Facts includes examples of instructions that were used to direct the fraud.

But those emails were sent from Richard’s email accounts to Flader or Flader’s staff — not from Flader to Richard.

It was Richard who received money into secret accounts in Liechtenstein and Curacao that benefitted him, not Flader.

When Trio money was sent overseas to be ‘‘invested’’, some of it was fraudulently returned to Australia where it was used for a variety of purposes, all of them illegal.

Some of it was earmarked to buy shares in other companies — shares in Richard’s name. 

Some of it was used to prop up Trio’s crumbling businesses. Within those companies, this money was recorded as loans owing to Richard personally or to companies he controlled — loans worth millions of dollars. 

Yet, when Richard back-flipped and suddenly began pointing his finger at Flader, investigators apparently accepted it.

* * *

According to the source, Richard’s original story left no doubt that he himself was in charge.

He described himself, not Flader, as the one who ran Trio: he made the decisions, he issued the orders.

He said Flader was merely a service provider, in effect a hired gun who had the business structure, contacts and know-how that Richard needed for Trio’s offshore activities. 

According to our source, shortly before the fraud was exposed, Richard was advanced in his plans to switch his business away from Jack Flader’s companies in Hong Kong to a rival business services provider based in Europe.

The source said that ASIC was almost certainly aware of this and would have understood the obvious implication that Richard, not Flader, was running the show.