Charges laid in Sterling Income Trust case

The news: Criminal charges have been laid following an ASIC investigation into a failed rent-for-life scheme that became a subject of a Senate inquiry and a test case in the Hayne banking royal commission. Sterling Group founder Raymond Jones, his son Ryan and Simon Bell have been charged with multiple charges of aiding and abetting dishonest conduct relating to a financial service or product.

The numbers: Sterling was a managed investment scheme marketed as connecting savvy property investors with long-term renter retirees, in which 82% of victims lost more than $100,000 each in the eventual $18.5 million collapse. Many retirees became homeless in the fallout, and the group reportedly continued trading for months while insolvent in 2019.

The context: Consumer groups lobbied for the scheme's victims to be included in the Commonwealth's Compensation Scheme of Last Resort, a key recommendation of the Hayne Royal Rommission into banking and financial services. The case also raised questions about ASIC oversight, with inquiry submissions claiming the regulators were slow to act and knew the fund's directors as "serial Ponzi schemers". The matter is being prosecuted by the Commonwealth Director of Public Prosecutions.