When accused conwoman Melissa Caddick’s case was splashed all over the media, it brought back the distressing experience that Beth Spence and her husband Mick went through at the hands of their now convicted financial adviser.
Ms Caddick, whose decomposed foot washed up in her Asics running shoe on a remote beach on the NSW south coast last month, allegedly swindled $25m out of family and friends through her dodgy financial business, Maliver.
In February, the Federal Court heard there was a “significant shortfall” between the millions investigators allege Ms Caddick owes devastated investors and the value of her own luxury assets, with liquidators finding just $5600 in the 49-year-old’s bank accounts.
For Mrs Spence, their world came crashing down four days before Christmas in 2012 when she found out the Australian Securities and Investments Commission (ASIC) had raided her financial adviser’s office.
They were soon to discover they were one of 380 clients who lost a collective $60 million in life savings after the now jailed former Brisbane financial adviser Bradley Sherwin defrauded them via a Ponzi scheme. The couple lost their entire $500,000 retirement nest egg.
But with the Caddick case dominating headlines for months, the retiree said she feels despite their experience happening almost a decade ago, victims are still being destroyed by dodgy financial dealings.
“Nothing has changed. These people who were defrauded by Melissa Caddick are suffering exactly the same that we had. We have been totally destroyed. You wake up one morning and you think I’ve got no money in the bank now, I’ve got no funds saved, what do I do?” she told news.com.au.
“I’m 60 or 65 or 70 and I can’t go back to work, I have to go down to Centrelink and I did have $500,000 but I have no paperwork to show you and I don’t have it any more. You have got to keep reliving it all the time … it’s extremely hard. Melissa Caddick did bring a lot of it back – I think she did just cut her foot off and she’s still alive.”
Mrs Spence has called for victims of financial fraud to be given the same treatment as those going through a natural disaster.
“The major thing for when a financial disaster strikes is there is no where to get bacon and eggs and a pair of undies as you get frowned upon as you should have known better. But we were defrauded and our financial adviser was convicted of fraud,” she said.
“He had personal indemnity insurance and if it had of been a bad investment we would have been paid out, but it’s not a bad investment – he committed fraud.”
She has called for core support services to be made available at administrator meetings for fraud victims, such as representatives from the tax office, the debt helpline, Centrelink and Anglicare.
“People have committed suicide, had heart attacks, downsized, gone back to work and moved interstate, because they had to do it financially. All those horrible things you hear happened but there is no consistent help – you can ring the suicide line or Lifeline but there is not anything targeted towards financial disaster,” she explained.
“There is nothing different from a financial disaster to a flood or a fire except with natural disasters it’s physical as you can see what happens, but you can’t necessarily see it with financial disasters.”
Only two months before the fraud was uncovered, the couple had enjoyed their only daughter’s wedding, sold the family home and moved to “our little piece of paradise” for retirement in Yamba, NSW.
But settling into the community proved incredibly hard when your life savings had been ripped away in an instant, Mrs Spence said.
“I can’t go out for coffee as I can’t afford the coffee or dinner. I have grandkids and I would buy the occasional T-shirt but I can’t buy the $15 or $12 name brand and have to buy the $2.50 Kmart one – and there is nothing wrong with that – but I had the choice previously,” she said.
“I can’t go to dentist when I wish to, or if I want to change shoes or go to a family occasion in WA I couldn’t do it. We were never overseas travellers and never had an extravagant lifestyle, we just had an average job and money in the bank to fund our own retirement … and he took that away from us.”
Hoping to claim back the money they’d lost, they joined two class action law suits. From one they clawed back $110,000.
But with the other class action against the Bank of Queensland and funds management business DDH Graham, what followed was six years of intense stress for the couple. Ultimately, the class action only delivered them $12 million, a payout that was almost matched by the $11.75 million bill from their lawyers, funders and administrators.
The providers wanted 98 per cent of their payout, leaving the claimants with a miserly $250,000.
The costs bill was then cut to $8 million in the Federal Court with the judge describing it as the “worst settlement” that had crossed his bench and the paltry $250,000 was upped to $4 million – still a long way from the $60 million lost.
After six years of being in court, Mrs Spence said the result was “as devastating as when this all started” and urged for changes to class actions be implemented.
She said to make the system fair, fees for litigation funders and lawyers should be capped, and not exceed 40 to 50 per cent of the settlement.
“The settlement should go to the class members and not be eaten up fees. I know it’s a business, that’s not an issue, its just wrong and I would never go through another class action again. It’s fundamentally wrong that 98 per cent of the settlement money initially went with the fees,” she said.
You can hear more from Beth and others on class actions on Tuesday on SBS Insight at 8.30pm.