The former director of Reiwa-Capital, Russell Sandiford, has been sentenced in the District Court of New South Wales to two years and 8 months’ imprisonment, to be served by way of an Intensive Correction Order (ICO), relating to his dishonest use of investor funds.

The sentence was imposed on 6 September 2024 following Mr Sandiford’s pleas of guilty to two counts of dishonest conduct in connection with a financial product contrary to s1041G of the Corporations Act.

Between January 2020 and June 2022 Mr Sandiford contacted individuals using email addresses that he held from his previous employment as a market trader and analyst at brokerage firms.

Mr Sandiford invited the email recipients to participate in one of two funds:

• A ‘Hedge Fund’ which offered, for a nominal one-off fee, a split of profits from a trading account operated by Mr Sandiford trading in foreign exchange products and commodities, and 
• An ‘Income Fund’ where investors would pay a capital investment amount on the basis it would be paid into a larger pool of funds to be used to trade foreign exchange products and commodities for the profit of investors.

Over two and a half years, 74 clients paid $440,909 to Mr Sandiford for investing or trading via those funds. 

Mr Sandiford used the funds primarily for personal expenses or purposes unrelated to trading including gambling and personal entertainment, rather than investing or trading as agreed. 

Only $6,316 of the $440,909 received by Mr Sandiford was paid back to investors. No other amounts were repaid.

In passing sentence, the Court noted that Mr Sandiford’s crimes were ‘brazen’ and involved a ‘serious breach of the trust that he deliberately cultivated with his customers’.

His Honour Judge O’Brien noted that Mr Sandiford’s crimes were motivated by greed and at the time of offending he had issues with alcohol, cocaine use and gambling.

However, given the steps Mr Sandiford took to rehabilitate after he was charged, the Court found that Mr Sandiford should serve his period of imprisonment by way of an ICO with the condition of a home detention order.

The sentence was stayed until 27 September 2024 so as to enable Mr Sandiford’s suitability for home detention to be assessed.  

Reparation orders in favour of the victims were also made.

The matter was prosecuted by the Office of the Director of Public Prosecutions (Cth) following a referral from ASIC.

Background

Mr Sandiford first appeared in the Downing Centre Local Court on 21 March 2023.

He pleaded guilty on 13 February 2024.

The maximum penalty for a conviction under s1041G is 15 years imprisonment or the greater of $945,000 or a fine of three times the total value of the benefits, or both.

Editor's Note: 

On 26 September 2024 Mr Sandiford appeared at the District Court of New South Wales for finalisation of the adjourned sentence hearing from 9 September 2024.

The Court confirmed that Mr Sandiford’s sentence of imprisonment (of two years and eight months) is to be served by way of an Intensive Corrections Order (ICO) commencing on 26 September 2024 and ending on 25 May 2027.

The conditions of the ICO include that Mr Sandiford must not commit any offence and that he submit to supervision. Additionally, the Court also ordered that Mr Sandiford:

• Be subject to home detention for a period of 18 months,
• Be subject to a treatment condition that he receive psychological treatment, and
• Undertake 300 hours of community service work.