Queensland property developer Ian Omar Chester has been sentenced to nine years’ imprisonment for aggravated fraud following an Australian Securities and Investments Commission (ASIC) investigation into several property development companies and projects in which SMSFs invested.
Chester pleaded guilty in the Southport District Court in Queensland to dishonestly applying over $2.2 million in investor funds to his own use or for the use of others, which involved falsifying investor authorities. He was the sole director of about 18 companies used as investment and development vehicles involved in five property development projects.
“Investors entrusted Mr Chester with millions of dollars for property development projects. Instead, substantial funds were diverted away from the purposes represented to investors,” ASIC chair Sarah Court said.
Under the Queensland criminal code, ‘aggravated fraud’ occurs when an offence involves specific circumstances that increase its seriousness. This can include an act involving $100,000 or more or where the offender is found to be ‘carrying on the business’ of committing fraud.
The development projects raised funds from 190 investors, many of whom were SMSF members. The court heard even though Chester was aware the land for one development had been sold to an unrelated party, he caused an investor to receive information indicating the project was on track, which subsequently led them to allocate money to the project.
ASIC noted remarks by Judge Katarina Prskalo in her sentencing that investors had worked hard to save money they had now lost.
“Her Honour said the offending was ‘sustained and deliberate dishonesty’ and having considered 17 victim impact statements, accepted that investors had suffered ‘real harm’ and that ‘paying funds to creditors of other projects is as good as paying yourself’,” Court noted.
The sentencing followed the obtaining of orders by ASIC from the Federal Court to have the assets of Chester and associated entities frozen in July 2021 and his being charged with criminal offences in connection with companies engaged in Gold Coast property development projects in December 2023.
