Daniel Farook Ali, the former director of unlicensed foreign exchange trading business DanFX Trade Pty Ltd, has been sentenced to seven years and three months imprisonment for fraud totaling $977,000.
Ali pled guilty last week to five counts of fraud. He misappropriated AU$771,303, which was invested by investors for trading and investments.
The sentencing followed the Australian Securities & Investments Commission (ASIC) investigation into Ali, who operated an unlicensed foreign exchange trading business.
Following an extradition request from Australia, Mr Ali was arrested in Poland in November 2021 and extradited to Australia in July 2022 after consenting to the extradition. He pleaded guilty to five counts of fraud in the Brisbane District Court.
A Fraudulent FX Scheme
ASIC alleged that between May 2016 and November 2017, Mr Ali dishonestly used funds provided to him by investors for trading and investment purposes for unauthorized purposes, including to buy real estate and luxury cars for his family members and related companies, and to pay returns to other investors
The announcement by ASIC today (Monday) elaborated that, between May 2016 and November 2017, Ali dishonestly used the investors’ funds to purchase a luxury vehicle for a personal associate, buy real estate for himself and his wife, and pay other personal expenses. Furthermore, he used the funds to pay returns to others, making it a classic Ponzi scheme.
The matter was prosecuted by the Commonwealth Director of Public Prosecutions following a referral of a brief of evidence from ASIC. ASIC acknowledged the assistance of the Australian Federal Police’s Fugitive Apprehension Strike Team, the Commonwealth Attorney-General’s Department, and Polish authorities in relation to Mr Ali’s extradition.
In the sentencing, the judge highlighted that Ali’s offences involved a level of sophistication over a period of time as he exploited the trust of his victims, adding that “his dishonesty contributed to particularly devastating financial positions for those victims.”
A Serial Fraudster
Interestingly, Ali has an history of committing fraud as he was sentenced to two and a half years in prison in October 2013 for fraud charges. However, his sentencing was suspended after he served six months in prison. It is to be noted that the previous conviction was brought by the prosecutors in Queensland without any involvement of ASIC.
The Aussie financial market regulator’s action against Ali started in 2017 with a ban on him from providing financial services or engaging in credit activities. The regulator also obtained a court order seizing the assets of Ali and his company and subsequently obtained orders to wind up the scheme.
ASIC further discovered that Ali managed an unregistered investment scheme without any licence and also managed DanFX and two other related companies despite being disqualified due to his prior conviction, leading to a permanent restraining order against him. He was arrested in November 2021 in Poland and then extradited to Australia in August 2022.
