Kiwis duped in Australian superannuation scam

SYDNEY - New Zealanders working in Australia were fleeced in a scam in which A$3.5 million ($3.85 million) in superannuation benefits were illegally released.

The Australian Securities and Investments Commission (Asic) said the promoters of the schemes placed advertisements in regional and metropolitan newspapers in Australia and New Zealand, inviting people to roll over their superannuation benefits into a self-managed fund.

"When the funds were deposited into the self-managed fund, the promoter drew a cheque or international draft in favour of the member, after deducting an administration fee of A$300 and brokerage fee of between 15 and 17 per cent of the rollover amount," Asic enforcement executive director Jan Redfern said yesterday.

In some cases, the rollover funds were sent to a business in Qatar before cheques or international drafts were drawn in favour of the members.

A further fee of 20 per cent of the rollover amount was charged by the business in Qatar.

"Although members were incorrectly assured the schemes were legal, they were not informed that if they did not satisfy a condition for early release, they would be liable to pay tax on the amount redeemed at the marginal taxation rate for withdrawing their superannuation prior to retirement," said Ms Redfern in a statement.

"In some cases, the amount of tax payable by the member exceeded the amount redeemed ... after payment of the administration fees."

Asic has obtained orders in the Federal Court against the third operator of the schemes, Raymond Stuart Heard, of Brisbane.

Asic did not say today how many New Zealanders were caught up in the scheme, but said the funds in the illegal scheme were mostly held by New Zealanders, who had accumulated the benefits while working in Australia.

"Asic has continued to scrutinise schemes promoting the early release of superannuation benefits," Ms Redfern said. "In many cases these schemes are illegal."

- NZPA