Former Reiwa-Capital director sentenced for funds mishandling

The former director of investment business, Reiwa-Capital, has received a prison sentence to be served through an Intensive Correction Order (ICO) for dishonest conduct and mishandling of investor funds.

Russell Sandiford was sentenced in the District Court of New South Wales to two years and eight months’ imprisonment which will be fulfilled by way of an ICO, after he pleaded guilty earlier this year to two counts of dishonest conduct in connection with a financial product contrary to s1041G of the Corporations Act.

Sandiford first appeared in the Downing Centre Local Court in March 2023, after an investigation found Sandiford had deceived 74 clients between January 2020 and June 2022 into paying $440,909 to be invested or traded in one of two funds offered:

• “A ‘Hedge Fund’ which offered, for a nominal one-off fee, a split of profits from a trading account operated by Sandiford trading in foreign exchange products and commodities, or
• 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.”

Sandiford used his former contact details from previous employment as a market trader and analyst at brokerage firms to lure individuals into the scheme, after which only $6,316 was paid back; the remaining amount was personally used by Sandiford for expenses or purposes unrelated to trading including gambling and personal entertainment.

Upon sentencing, the Court said that Sandiford’s crimes were “brazen” and “a serious breach of the trust that he deliberately cultivated with his customers”, with Judge O’Brien noting that Sandiford was “motivated by greed and at the time of offending he had issues with alcohol, cocaine use and gambling”.

The Court also took into account Sandiford’s efforts to undergo rehabilitation after he was charged in 2023, leading to the decision that he should serve his period of imprisonment by way of an ICO with the condition of a home detention order.

The Court also ordered compensation be dispensed in favour of the victims.