Chartwell boss to plead guilty
to Ponzi fraud scheme

by | Dec 4, 2010 | Fraud & Integrity, Fraud Money Laundering | 0 comments

Home | Chartwell boss to plead guilty to Ponzi fraud scheme

The man behind Australia’s largest Ponzi scheme has indicated that he will plead guilty to over forty separate charges in the Supreme Court despite earlier insisting he was innocent and would contest the charges.
The flameout which became Chartwell Enterprises was operated by 66 year old Graeme Hoy of Victoria. Hoy managed to convince small investors to pour their savings into his business by offering stunning returns upwards of 50%. Investors are estimated to have lost over $80 million after the collapse in April 2008 with hundreds of them living in Geelong.

Hoy had been arraigned for trial in 2011 on more than 200 charges but instead agreed to plead guilty to forty seven counts regarding the collapse of Chartwell Enterprises in April 2008.

The investors funds that were passed to Chartwell Enterprises were used to either pay the high rate of return to the earlier investors or else funded the lavish lifestyle of Hoy.  Hoy once flaunted his facade of wealth and supposed business acumen in Geelong by driving Rolls Royce cars, sailing a yacht and buying luxury homes. Hoy also operated a failed hospitality business named Black Swan Holdings.

Once Chartwell Enterprises failed and he was suspected of fraud, Hoy moved away from Geelong to nearby Melbourne. Liquidators of Chartwell Enterprises soon found that there was little in the way of assets as Hoy had burned through the money living his flamboyant lifestyle.

Incredibly, Hoy has been able to avoid prison so far as negotiations were held between his legal team and prosecutors. Now that Hoy is set to plead guilty to fraud charges, many of the fleeced investors will be hoping he will service a lengthy prison service.

Hoy has avoided being seen Geelong, claiming that he fears retribution from aggrieved investors. However, Justice Terry Forrest has ordered Hoy to return to Geelong for his plea hearing and sentence.

The prospect of Hoy going to prison will be little solace for investors who are unlikely to ever get a penny back. Fred Houte and his family lost more than $5m in the Ponzi fraud.

It will be interesting to see what sentence Hoy receives and how this compares with a sentence for a similar crime in the US, where white collar crime is viewed as requiring severe punishment. Will Australia start to follow the US lead and put white collar crime on the same level as armed robbery?

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