More than 5,000 Aussies who reinvested hundreds of millions of their superannuation into First Guardian Master Fund could struggle to recover their nest eggs following a corporate collapse.
Retirement savers like Juan Carlos Sanchez were convinced by financial advisory company Venture Egg’s telemarkers to move their super savings from ANZ into a fund called AusPrac.
After shifting all his super, Mr Sanchez was told that withdrawals from his fund had been frozen since May 2024, with an email from AusPrac confirming this.
‘When I got that email, my stomach dropped, it’s just been wiped out by this collapse,’ he told the ABC. ‘I just had this sick feeling.’
Mr Sanchez later discovered his super was not being reinvested to grow his retirement savings but was being sent into ‘a cash hub’ controlled by the directors of First Guardian Master Fund.
Mr Sanchez was one of 6,000 Aussies who collectively invested $590million with First Guardian before it collapsed this year.
The Australian Securities and Investments Commission is investigating the company, initially founded in August 2019 as a managed investment scheme.
Investors were told to put their super into a retail choice superannuation fund and then invest part or all of it into First Guardian.
Thousands of Australians had reinvested a total of $590million into First Guardian Master Fund which fell apart this year (stock image)
Falcon Capital Limited was responsible for the failed First Guardian fund and in May 2024, it suspended the processing of applications and withdrawals, stopping the majority of its investors from being able to access their retirement savings and switch them over to a new super fund.
ASIC alleged its former managing director David Anderson, a board member of Falcon, poured millions of investors’ retirement savings into his own failed property developments, craft breweries and to help celebrity chef Scott Pickett, of which he was a shareholder.
The Federal Court in April appointed FTI Consulting as liquidators of Falcon Capital, following an ASIC application.
Mr Anderson’s assets were frozen and his passport seized as investigators comb through financial records.
Mr Anderson and another director Simon Selimaj are banned from leaving Australia until 27 February 2026.
‘ASIC sought the orders to ensure Mr Anderson and Mr Selimaj remain in Australia to assist ASIC with its investigation and to preserve assets while ASIC’s investigation is continuing,’ the corporate regulator said.
Public court documents obtained showed Mr Anderson moved $274million into offshore companies tied to him after he was warned about ASIC’s investigation.
ASIC investigators have warned the money will be hard to find.
The regulator also alleged $5.6 million was put into Mr Anderson’s personal ANZ account ‘without any legitimate basis for payments in that amount being apparent to ASIC or disclosed to investors’.
Juan Carlos Sanchez was left feeling sick after he realised his super was being sent to a ‘cash hub’ in May 2024 and withdrawals were frozen (stock image)
He allegedly used $16,000 to make a mortgage payment on his multi-million-dollar home.
‘Falcon appears to continue to redeploy the limited funds it has received to illiquid investments, despite representations made to investors that it would fulfil redemption requests and reopen the First Guardian Master Fund for investment once the cash receivables are received,’ ASIC told the court.
ASIC also alleged Falcon may have deceived stakeholders about the security of their investment and possible returns.
Lawyers for Mr Anderson said ‘there have been no findings of fact or law by any court or tribunal, nor by ASIC’.
‘Mr Anderson will fully exercise his rights in response to allegations which may be made against him at the appropriate time in the appropriate forum,’ Dan Mackay of Mackay Chapman lawyers said.
ASIC found that in the ‘best-case scenario’ $81 million of investor funds were unaccounted for but accepted the money loaned to overseas businesses may never be recovered.
One investor stands to lose $677,000.
ASIC is also investigating Melbourne-based financial adviser Ferras Merhi who ran Venture Egg Financial Services and led thousands of clients into the First Guardian Fund.
ASIC are investigating David Anderson, the man who was behind Falcon Capital Limited which was responsible for the failed First Guardian fund
The Federal Court has made interim orders freezing some assets of Mr Mehri who is linked to at least 2,440 clients who invested $179 million in First Guardian funds.
While telling clients to invest in First Guardian, Mr Merhi was also being paid to market the fund.
In court documents it was alleged Mr Mehri received more than $19 million in payments from First Guardian for marketing services.
Small business owner Greg McElherron could lose thousands of dollars and pleaded with the government to step in and protect superannuation investors.
‘Everyone is running for the hills trying to cover their backsides. It’s absolutely shameful,’ he said.
‘If you’re going to be not only encouraged but mandated to put money into your super, it should be protected.’
