Friday 03 November 2006 LAWFUEL – Law News Network – Mr Paul Drakos, of the Central Coast in New South Wales, was today jailed following an Australian Securities and Investments Commission (ASIC) investigation into the former financial planner. The District Court of New South Wales imposed a eight year sentence on Mr Drakos with a non-parole period of five-and-a-half years. On 29 May 2006 Mr Drakos, 54, pleaded guilty to eight counts of dishonestly obtaining a financial advantage by deception, two counts of fraudulent misappropriation and three counts of making and using false documents. The offences involved $5,972,599.80. Mr Drakos was an authorised representative of the National Australia Bank Limited (NAB) from October 1994 until August 2001, when the crimes were committed. ASIC found that between 1997 and 2001 Mr Drakos made recommendations to a number of NAB clients to invest in BSI Corp, an entity based in the Bahamas. BSI Corp was not a NAB approved investment product.
Mr Drakos informed his clients that BSI Corp was associated with, or was a subsidiary of, Barclays Bank, which was not true. The BSI investments were in a non-interest earning cheque account. Amounts were then transferred to an account in the Dominican Republic, also a non-interest earning account. At least $6.2 million was subsequently transferred from the overseas accounts in the Bahamas and the Dominican Republic back to a private company account, held for Strategic Investments Group and controlled by Mr Drakos. Funds were then applied from this account to a number of failed business opportunities including a golf driving range on the Central Coast, a plumbing business, and futures and commodities trading. Mr Drakos was not officially connected with BSI but gave instructions to agents based in Canada to arrange for the transfer of funds back to Strategic Investments Group and other accounts.
Mr Drakos operated out of the Hornsby branch of NAB and his clients were mainly from the North Shore of Sydney and surrounding suburbs. ‘People rely on their financial adviser and expect, rightly so, honest and reliable advice. ASIC will continue to pursue those people that blatantly disregard their responsibilities, and use their positions dishonestly, with the full vigour of the law. Today’s jailing shows that those in the financial services industry who act illegally can indeed face severe consequences’, Ms Jan Redfern, ASIC’s Executive Director of Enforcement said.
ASIC permanently banned Mr Drakos from acting as a representative of a dealer or investment adviser in January 2004. Mr Drakos was declared bankrupt in June 2003 and all his private company investment vehicles are in liquidation. The matter was prosecuted by the Commonwealth Department of Public Prosecutions. For further information contact: Jan Redfern Executive Director, Enforcement Telephone: 02 9911 2191 Mobile: 0411 119 210 Danielle Huck ASIC Media Unit Telephone: 03 9280 3407 Mobile: 0417 540 769
