Accountant sentenced to house arrest for misusing client funds

Nicholas James Ellis has been sentenced to three years' imprisonment to be served by way of an Intensive Correction Order (ICO) for making false or misleading statements to obtain money from clients and fraudulent misappropriation of client funds.

As a part of the ICO, Ellis will serve 12-months by way of home detention (subject to a further suitability assessment) and undertake 700 hours of community service.

In delivering the sentence, Judge Williams remarked that Ellis: "Provided information to investors that was untrue and caused those investors to act on that information. Had the true picture been disclosed, the investors may have been less forthcoming". 

An ASIC investigation uncovered several letters and emails, containing false and misleading statements, Ellis had sent to his clients for the purpose of raising funds to purchase a hotel in Tura NSW through his company Tura Pty Limited. As a result, in August 2017, Ellis pleaded guilty to two charges. 

Ellis admitted to fraudulently misappropriating approximately $562,000 of client funds received by his company, which he then used to buy a house in Manly, NSW. 

"Ellis was a trusted financial adviser and accountant, who misled his clients and misused their funds for the benefit of his own business. Accountants and financial advisers are in a position of trust. As demonstrated in this case, ASIC is prepared to take criminal action where trusted advisers misappropriate clients’ money," said ASIC commissioner Danielle Press. 

ASIC banned Ellis from providing financial services in 2013 for a period of six years. As a result of the sentence, Ellis will automatically be disqualified from managing corporations for a period of five years.

The matter will be back in Court on 17 October 2019 for the purpose of determining Ellis’ suitability for home detention.