Agent Stole Super Funds But Invested In `disasters'
Sydney Morning Herald
Tuesday March 23, 1999
A superannuation consultant's attempts to earn enough money to retire were described as "disaster followed by disaster" by a judge who yesterday added another disaster to the list: he sentenced him to two years' jail.
The former Lane Cove life insurance salesman, John Robert Houghton, pleaded guilty in the District Court to 26 charges that he fraudulently misappropriated $1.3 million from wholesale superannuation investment funds.
Houghton, aged 53, must serve a minimum sentence of 18 months in a low security prison because, Judge Herron said, he had adult diabetes, hypertension and other medical problems.
Houghton was an insurance salesman for Noble Lowndes between 1962 and 1976 and set up Houghton & Associates in 1977.
The fraudulent transactions commenced in January 1994 after Houghton had tired of the insurance and superannuation industry and planned to retire early because he felt the industry was becoming bogged down with too much supervision.
Houghton & Associates had collected from dozens of superannuation policyholders money to be invested in Mercantile Mutual and Prudential superannuation policies.
But in his hurry to retire early he diverted some of these funds into a dormant Queensland copper mine called Dianne which needed $7 million to get it going again and to which he had been introduced by a friend who was a senior figure in the Queensland mining industry.
When the mine rejuvenation scheme failed Houghton had become even more desperate to cover his losses and spent $750,000 on a painting of the Atlanta Olympics painted by Charles Bilich, from which he intended to produce multiple prints for sale.
Judge Herron said that the price paid to Bilich was "outrageous" and one that any ordinary person would not have paid. He described Houghton's attempts at investments as "disaster followed by disaster".
Both The super funds affected by Houghton's misappropriations included Bankstown District Sports Club Staff Super Fund, Project Communications Executive Staff Super Fund, NSW Golf Clubs (1983) Staff Super Fund, Dylora Superannuation Fund, Bruce Craig Insurances Super Fund, John R. McCarty Pty Ltd, AI Industrial Staff Super Fund, R. M. Campbell Staff Super Fund and Southern Cross Supplies Super Fund. The largest single amount misappropriated was $300,000.
When the paintings venture collapsed, a desperate Houghton diverted some of the superannuation funds to pay $80,000 worth of building expenses, paid $5,000 to his son for his landscaping business and paid his mother $20,000. He also gambled two amounts of $20,000 in what Judge Herron described as a "last ditch to save a wreck".
With money rapidly draining out of his clients' funds Houghton turned to his solicitor who suggested he turn himself in to the police. Last June Houghton gave himself up to the NSW Crime Agency, confessed to misusing his clients' funds and pleaded guilty last December to the charges laid.
Both Mercantile Mutual and Prudential have agreed to restore Houghton's clients' lost money because Houghton held agencies with both companies.
Judge Herron said that Houghton had been forced to sell his family home in Longueville. He had split with his wife and was living with his mother at Hunters Hill. During a pre-sentence hearing, character witnesses said Houghton, who had always been "completely honest" before the frauds were committed, was now ashamed, shattered and avoiding social contact.
Judge Herron said he took into account in providing a lenient sentence the fact that he had confessed to the frauds.
© 1999 Sydney Morning Herald
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