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A former accountant convicted of defrauding investors has managed to successfully appeal some of his charges.
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Former accountant convicted of fraud appeals charges
12 February 2021
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Douglas Gordon Johnston has had three counts of obtaining a financial advantage by deception overturned by the Victorian Court of Criminal Appeal, but was unable to overturn six other counts of the same charge.
Mr Johnston had been previously sentenced to six years of imprisonment for defrauding investors of approximately $815,000, while his wife, Maureen Johnston, was handed a five years and six months’ jail sentence for stealing over $1 million.
In overturning three of the nine counts of obtaining a financial advantage by deception, the Appeal Court held that the depositional evidence of two witnesses should not have been admitted in Mr Johnston’s trial.
It held that the medical evidence relied on by the prosecution was inadequate to establish that the witnesses were unable to give evidence at the trial.
The court has now ordered a retrial for the three charges on a date yet to be fixed, with Mr Johnston to be re-sentenced for the remaining six charges.
The scheme
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At the time of Mr Johnston’s sentencing in 2019, ASIC alleged that he and his wife had worked together to defraud investors — many of whom they met through their association with the Collingwood Football Club.
The Johnstons developed friendships at the club before raising the idea of investing with them, and went on to deceive investors by urging them to invest in various bogus property developments in the United States and Australia.
In some cases, Mr Johnston set up self-managed super funds for investors, with the promise of managing the money on their behalf.
Instead, the funds were withdrawn as cash by the couple, used to repay their credit card debts, transferred to another account in the name of Maureen Johnston, and used to pay new investor deposits in a Ponzi-style operation.
According to ASIC, the majority of the funds invested with the Johnstons was never repaid.
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