Mental health spiral behind ‘hare-brained’ $395m fraud
Emily Woods |
A man facing prison for orchestrating a $395 million National Disability Insurance Scheme fraud blames his “extraordinarily stupid conduct” on his mental health, which spiralled after a heart attack.
Demetrios “James” Charisiou, 63, has admitted two obtaining financial advantage by deception and two document fraud charges, after he duped Korean investors into pouring bank credit into fake NDIS property deals.
Almost five years after committing the major fraud, he is yet to spend a day in prison.
Charisiou, who is on bail, faced the Supreme Court in Melbourne on Wednesday, where his lawyer explained why he committed the “hare-brained” fraud after a heart attack.
“A man who, by all accounts, has been an exemplary hard-working man has a serious heart episode in 2017 and then subsequently embarks on this extraordinary behaviour,” defence barrister Chris Winneke KC told the court.
Charisiou previously worked as a foster care co-ordinator, health worker, consultant and a KPMG director, his barrister said.
He was asked by government departments in the 1990s to assist with gathering statistics on motor vehicle fatalities and reviewed suicide rates for a coronial body.
While living in the United Arab Emirates in 2017, he collapsed after suffering from a heart blockage, Mr Winneke said, and Charisiou’s family noticed his mental health then spiral as he suffered mood changes and memory lapses.
He said Charisiou committed the fraud, which he described as “extraordinarily stupid conduct”, while in a hyper-manic state due to his bipolar disorder.
“It’s a condition that we say, in the absence of it, it’s unlikely that the offences would have been committed,” he said.
Between April and July 2019, Korean investors JB Asset Management and KB Securities gave Charisiou, director of Living Bright Australia, $394,740,000 in credit to invest in NDIS-supported properties in Melbourne.
He provided the investors with false documents to make it looked like he was using the money to purchase properties, including one he claimed was worth more than $101 million.
Fraudulent documents included fake NDIS design certificates, evaluation reports, deeds and a QBE Insurance Certificate.
But none of the properties were purchased and most of the money sat in an account.
Charisiou transferred $1.6 million to his wife’s account and about $54 million was used for property development, loan arrangements and lawyers.
A letter to the court described Charisiou telling his friend about “a deal worth tens of millions of dollars” he was working on, and then “it seemed overnight the deal had become quite complex”.
“He was stressed, all the pressure of the deal seemed to be on his shoulders, he was oddly detached, speaking in jargon … he could not see beyond the quagmire,” she wrote.
Mr Winneke said Charisiou was remorseful, has since repaid all money owed back to the investors, paid a confidential civil settlement and accepted he was facing a term of imprisonment.
The hearing before Justice John Champion will resume on November 14.
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