DISGRACED former Newcastle insolvency practitioner Stuart Ariff could be jailed after a jury found him guilty of fraud yesterday.
Judge James Bennett of the NSW District Court revoked Ariff’s bail, saying the prosecution had presented a ‘‘formidable’’ case.
‘‘The allegations are serious allegations and upon the material that I have before me, it would seem inevitable that the offender will suffer a period of incarceration,’’ he said.
A sentencing hearing has been listed in November.
Ariff, 48, took $1.18million in 13 transactions between 2006 and 2008 from a Newcastle company he was winding up, HR Cook Investments Pty Ltd.
More than $700,000 went to pay legal bills for other companies where he was liquidator, almost $400,000 went into the bank account of his practice, Stuart Ariff Insolvency Administrators, and $50,000 to his mother Barbara Ariff.
Susan Shedden, whose parents set up HR Cook in 1960 as a family investment company, said she was ‘‘absolutely on top of the world’’ at the outcome of the four-week trial.
Trish McDonald, SC, for the Australian Securities and Investments Commission (ASIC), successfully applied for Ariff to be taken into custody immediately after the jury delivered 19 guilty verdicts.
Thirteen of Ariff’s offences, for transferring funds from HR Cook with intent to defraud, carried a maximum penalty of 10 years’ jail each, Ms McDonald said.
The other six offences, of falsifying HR Cook’s accounts, carry a maximum fine of $22,000 or imprisonment for five years or both.
ASIC charged Ariff in August 2010, three years after a consultant’s report commissioned by aggrieved creditors of a company under his control concluded that he ‘‘knowingly and deliberately made claims for items which were not appropriate or did not actually exist’’.
The regulator brought civil proceedings in the NSW Supreme Court in 2009, which led to Ariff’s ban from the insolvency profession for life and an order that he pay $4.9million in compensation to creditors of 16 companies where he was liquidator or administrator.
He became bankrupt two months later without paying the compensation.
The judge who banned him, Justice Patricia Bergin, noted that a liquidator was an officer of the court and described his conduct as ‘‘quite appalling’’.