ASIC Media Release
Mr Gerard Karl Little, of Castlecrag, New South Wales, has been sentenced today in the District Court of New South Wales by Judge Williams to two years imprisonment, to be released after eight months, for unlawfully allowing the early access of superannuation benefits. Mr Little’s release is conditional upon entering a $1,000 security to be of good behaviour for a period of three years.
Mr Little, 45, was convicted under sections 62 and 202 of the Superannuation Industry (Supervision) Act 1993 (the SIS Act) after an Australian Securities and Investments Commission (ASIC) investigation found he had failed to ensure his self-managed superannuation fund known as the Little Superannuation Fund (LSF) was maintained in accordance with the sole purpose test. Mr Little was trustee of the fund at the time of the offence.
The sole purpose test prohibits trustees maintaining self-managed super funds, for any purpose other than to provide retirement benefits for members. A trustee who maintains a self-managed super fund for other purposes contravenes the law.
The preserved superannuation benefits of 121 superannuants totalling $3,531,056.93 were deposited by Mr Little into the bank accounts of the LSF. These funds were rolled over from 11 complying superannuation funds. Mr Little then used the LSF to obtain early access to these benefits by withdrawing and distributing the funds to the superannuants.
Mr Little retained over $685,000 for himself by way of a commission. At the time the LSF received the superannuation benefits from the complying superannuation funds, Mr Little was aware that he had an obligation to preserve these benefits until the superannuants had satisfied a condition of release but had no intention of doing so.
This conviction follows an investigation conducted with the assistance of the Australian Taxation Office (ATO). Trustees of self managed superannuation funds and their members receive particular taxation benefits for complying with the requirements of the SIS Act. People can only access their superannuation early in very special circumstances. For further information, individuals should contact the trustee of their fund or the ATO.
The Tax Office reviews the taxation returns of superannuants who unlawfully obtain the early release of their superannuation benefits. These superannuants may be liable for unpaid tax as well as penalties.
The Commonwealth Director of Public Prosecutions prosecuted the matter.
Article by Christie Lewis
Christie is Practice Manager at Alan Lewis Accountants . Besides accounting, her passion is for all things small business (and blogging, of course). You can contact Christie directly at christie@lewistaxation.com.au.
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