ASIC case leads to sentence over suspected scam funds in Australia

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ASIC case crypto scam sentence

Highlights

Brendan Gunn, former director of Mormarkets Pty Ltd, receives a 12-month prison sentence—suspended on recognizance of A$3,000—for dealing with over A$180,000 suspected as crime proceeds.
The investment proceeds, traced to an offshore cryptocurrency scam targeting Australians, involved 22 Mormarkets accounts across six banks between January 2019 and May 2020, all eventually closed for suspicious activity.
ASIC emphasizes a continued regulatory crackdown on scam facilitators, with the prosecution following bank fraud warnings, customer complaints, and a referral to the Office of the Director of Public Prosecutions.

Court sentence follows ASIC scam probe

As reported by ASIC, former finance director Brendan Gunn is sentenced in the Local Court of NSW for dealing with more than A$180,000 when it was reasonable to suspect the funds were proceeds of crime.

The court imposes a 12-month prison sentence, but orders his immediate release upon entering into a recognizance of A$3,000 requiring that he be of good behaviour for 12 months. ASIC says the money is suspected to have come from an offshore cryptocurrency investment scam that targeted Australians, and notes that 12 months is the maximum prison term available in a summary prosecution for the offence.

From December 2018, Gunn is a director of Mormarkets Pty Ltd, trading as Coinshype, which receives deposits from Australians for cryptocurrency and other purported investments. Between January 2019 and May 2020, 22 separate bank accounts with six financial institutions are opened in Mormarkets' name, and banks inform Gunn on multiple occasions that complaints allege fraud or other suspicious activity affecting funds credited to those accounts.

All accounts linked to Mormarkets are eventually closed by the banks. When two of those accounts are shut, Gunn receives two bank cheques containing investment proceeds totaling A$181,000 and then sends them to an associate; he later pleads guilty to dealing with money reasonably suspected of being proceeds of crime.

Regulatory focus on scam facilitators

ASIC Chair Sarah Court says Gunn ignored several clear warnings, including customer complaints made to Mormarkets' Australian banks, that money moving through the company's accounts was linked to suspected scam activity. She says that by continuing to deal with the funds, he helped suspected international scammers move money taken from Australians.

Court says ASIC remains committed to disrupting scams and holding enablers to account where possible, framing the case as part of a broader campaign against cross-border investment fraud. The sentence follows an ASIC investigation, with the prosecution brought by the Office of the Director of Public Prosecutions, Cth, after a referral from the regulator.

In our earlier article on FinCEN oversight and anti-money laundering reform, we covered a U.S. congressional hearing examining how the agency could strengthen enforcement against illicit finance while reducing unnecessary compliance burdens for financial institutions. Lawmakers focused on fraud recovery results, the need to modernize Bank Secrecy Act reporting thresholds, and privacy concerns around beneficial ownership information retained by FinCEN.

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