Summary

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Australia’s Largest Superannuation Fraud is such a remarkably easy fraud to prove.

The key fraudulent document was simply executed by the wrong parties.

{Note: The key fraudulent document was void and ineffective for several reasons, however invalid execution is the most obvious and it is sufficient}

There are many other fraudulent documents that have also been executed by the wrong parties.

However to understand the fraud a basic knowledge of the law of trust is required.

The Trust Deed of a superannuation trust provides substantial powers to the Trustee or Trustees to properly administer the trust.

Geraint Thomas in Thomas on Powers (2nd Edition) comments in relation to these powers at [9.06]:

“If any of these powers is exercised with the purpose of benefiting a participating employer, rather than the members and beneficiaries of the scheme, such exercise may be fraudulent and void. This is a particularly difficult problem in cases (which are common) where the trustees of a pension scheme are also the directors of other senior officers of the participating employer.

The occupation pension trust established on the 23 December 1913 was administered lawfully for seven decades by “Adelaide Gentlemen” who did not see the employees superannuation fund as a source of easy money for themselves.

However this all changed when well known “asset strippers” arrive from Melbourne and quickly identified the opportunity the assets held on trust by the superannuation fund represented.

These asset stripper identified a significant “loophole” in the law and used this to their advantage.

Australia’s $1 Trillion Superannuation System has a very fundamental flaw – no Government either Federal or State has legislated to make the registration of Deeds associated with superannuation trusts (funds) compulsory

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Some states have retained a system for the registration of Deeds from the days when land transfers  were witnessed by Deed however this system is VOLUNTARY.

Mr John Dorman Elliott and his associates identified this fundamental flaw and exploited it.

Under the terms of the trust declared on the 23 December 1913 in the State of South Australia to provide pensions and benefits to male officers, one counterpart of the Trust Deed was to be deposited at the head office of the company and be made available for inspection by the male officers, whilst the Trustees retained the other counterpart. The Trustees were required to make certified copies of the Trust Deed and to distribute these to the branch offices. The same procedure was to be adopted for any subsequent Deeds of Variation.

These procedures were followed for seven decades, until Mr Elliott and his associates arrived on the scene.

All the genuine Deeds and certified copies were rounded up and concealed.

Mr Elliott and his associates were able to implement this fraudulent arrangement by unlawfully removing natural person trustees from office and replacing them with his own corporate Trustee.

Two of the natural person trustees were elected by the Members and one by the Pensioners. All the Directors of the corporate Trustee were hand-picked by Mr Elliott.

With no representation by Members and Pensioners, Mr Elliott was then able to raid the actuarial surplus produced by the reduction in benefits by over 80%.

Instead of providing copies of the terms of the trust as amended to the Members of the Fund as had been the previous practice, Mr Elliott provided a personally signed “Members’ Handbook” which misrepresented retirement benefits to the Members.

However Mr Elliott failed to understand how the terms of a trust, including a superannuation trust can be lawfully amended and all purported amending instruments executed since 1980 are void and ineffective since they fail to comply with the provisions of the Power of Amendment.

Power of Amendment

Although the Deeds were not registered with the General Registry Office in Adelaide, there was a de facto registration of the terms of the trust with both the Attorney-General’s Office and with the Parliament of South Australia, when the Parliament amended the terms of the trust in 1963.

The Attorney-General’s Office and the Parliament of South Australia have now provided copies of these documents to the beneficiaries of the pension trust.

Current and former employees of companies associated with Elders IXL Limited now have very large claims for the underpayment of retirement entitlements.


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This tab updated on 30 December 2015