The Federal Court has permanently disqualified former director Larry Dawson from managing corporations after finding he breached his director’s duties in relation to scams involving superannuation and SMSFs.
The court made the ruling following action brought by the Australian Securities and Investments Commission (ASIC) in regards to Dawson’s actions as sole director of PW Kitt Co Pty Ltd between 2019 and 2020.
During that time, he was found to have contravened his duties by allowing that company to be used in a scheme that defrauded Australian investors of about $7 million in superannuation funds.
ASIC stated it took action over its concerns PW Kitt and Dawson obtained those funds by cold-calling Australian consumers and operating the websites smsfadvisory.com and pwkittco.com, which were designed to replicate other licensed businesses of a similar name.
The corporate regulator added Dawson failed in his director’s duties by setting up company bank accounts, facilitating transfers to cryptocurrency accounts that allowed dissipation of investor funds, failing to have any oversight of the activities undertaken by the company and personally benefiting to some extent.
Justice Shaun McElwaine, who ruled on the case, stated: “The investors were predominately individuals planning for or in retirement who believed that their funds would be used for the purpose of investing as part of establishing or augmenting their SMSF.
“For instance, one investor was falsely led to believe his transfer of more than $200,000 was to be invested in an international share portfolio.”
McElwaine added the fraud could not have taken place without Dawson breaching his duties, adding: “The public requires protection from further conduct of a like nature by Dawson, but also from other persons who may be tempted to participate in schemes to defraud persons of money.”
ASIC’s concerns were initially acted on in August 2020 when it sought to shut down the operation of the scheme and have receivers and managers appointed to the company and Dawson, but these were put on hold in 2021 when it became aware he was under criminal investigation by the New South Wales police.
Dawson was charged and sentenced in August 2024 for knowingly dealing with the proceeds of crime.
