A former financial director has been sentenced to over four years in prison for defrauding investors of nearly $1 million through a sophisticated forex trading scam.
The Downing Centre District Court in Sydney handed down the sentence with a non-parole period of two years and six months after the accused, McCabe, pleaded guilty to three counts of dishonestly obtaining financial advantage by deception. Four other offences were considered during sentencing.
From January 2015 to April 2021, McCabe, who was the sole director of the now-deregistered companies Guevara Capital Access Pty Ltd (GCA) and Online Trading Capital Pty Ltd (OTC), misled eight victims. Seven of these victims were clients of his companies.
McCabe falsely promised investors access to legitimate foreign exchange trading accounts on a third-party platform, along with specific capital amounts. Investors used these “test” accounts believing they were conducting real trades. However, no actual trading occurred.
Instead of investing the funds as promised, McCabe diverted $940,350 to cover personal and business expenses, including rent, private school fees, and credit card bills.
Judge David described McCabe’s scheme as “highly deceptive” and “more than simply enticing people.” He called it a “sophisticated scheme that created the illusion of genuine trading.” The judge noted that McCabe earned his victims’ trust by relying on his reputation and used manipulative tactics, including “psychological bullying,” to convince them their money was safe and to engage in fake deals.
The court highlighted the severe impact on the victims, describing the consequences as “significant” and “life-changing,” causing both emotional and financial harm.
Sarah Court, Deputy Chairwoman of the Australian Securities and Investments Commission (ASIC), said the sentence sends a strong message deterring similar misconduct. The case was prosecuted by the Commonwealth Director of Public Prosecutions after an ASIC investigation.
Under New South Wales law, the maximum penalty for dishonestly obtaining financial advantage by deception is 10 years in prison and/or a fine of $110,000.
This case underscores the risks investors face from fraudulent schemes disguised as legitimate trading opportunities and the importance of regulatory enforcement to protect the public.
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