Chris Marco: Former Nedlands fund manager found guilty of running multi-million dollar fraud scheme

A suburban fund manager who accepted more than $250 million from investors faces years behind bars after being convicted of one of the State’s biggest investment frauds. After four days of deliberations, a Supreme Court jury on Thursday found Chris Marco, 67, guilty of 43 counts of fraud relating to $34.3m but cleared his co-accused and former executive assistant Linda Anne Marissen of all 17 counts of fraud against her. Marco maintained his innocence through his lawyer, Luka Margaretic, and vowed to appeal the convictions. Operating from swanky offices on Broadway in Nedlands, Marco tapped about 150 investors with the promise of high returns before the corporate regulator froze his scheme in 2018, prosecutor Steven Whybrow told the five-week trial. The funds were pooled in Marco’s personal bank accounts and supposedly invested in sophisticated private placements, which involve the trading of bank and debt instruments. However, Mr Whybrow said the investments were “entirely make-believe”, but stopped short of calling it a Ponzi scheme. He said nearly $200m was paid back in interest and redemptions to Marco’s clients. And not a single payment was missed before the Australian Securities and Investments Commission closed him down. But the “test of the crime” was not whether investors got their cash back, Mr Whybrow said. Rather, it was whether the money was obtained deceptively in the first place. The case was one of the biggest mounted in WA by ASIC, which on Thursday welcomed the verdicts. ASIC deputy chair Sarah Court said they “mark the end of a sorry chapter that many of Mr Marco’s investors would rather forget”. “‘This result delivers justice to investors who Mr Marco defrauded and speaks to ASIC’s painstaking investigation into this complex matter.” One of Marco’s clients, Andrew Batchelar, testified how he was encouraged to see his first investment bear fruit handsomely, so rolled it over into another investment, then another. But the returns were “illusory” and the cash was simply “recirculated”, with new funds used to pay out earlier investors, Mr Whybrow said. He said a little over $11m was sent overseas and possibly invested in the final months of the scheme as part of last-minute efforts to keep it afloat “as the walls come tumbling in”. The prosecutor further alleged $21m was shared among Marco, his family and associates, with some spent on his collection of classic and muscle cars. “If he’d told people what he was really doing, they’d never give him the money,” Mr Whybrow said. Mr Batchelar, who runs an insurance underwriting firm and made a $1.6m profit from the scheme, said Marco had insisted the money was being used as proof of funds for private placements overseas. Asked if he had any inkling his money was being used to pay other investors’ returns, he replied: “I would never have invested if I had known that was the case”. Mr Margaretic argued that investors “knew what the money was being used for”. “Paying out investors from pooled investor funds is not an offence,” he said. But Mr Whybrow said the “test of the crime” was not whether investors got their cash back. Rather, it was whether the money was obtained deceptively in the first place. Mr Margaretic said it was a multi-layered, complex case, which was reflected in the time taken to reach verdicts. “In our view, the evidence fell well short of proving the charges beyond a reasonable doubt. This will be articulated in the appeal courts,” he told The West Australian. “We will submit that the verdicts were unsafe and not supported by the evidence.” Ms Marissen’s defence counsel Simon Freitag successfully argued his client merely did administration work, directed by Marco, who “believed he was the guru” and “was going to land this white whale”. Marco was remanded in custody and will be sentenced on October 30.