The Federal Court of Australia has sentenced Mr David Robert Siminton to 16 months’ jail for contempt arising out of Federal Court action by the Australian Prudential Regulation Authority (APRA) to stop him operating an unauthorised bank.

Two cumulative sentences were imposed on 28 November after Siminton had been found guilty of two separate contempts of court for breaching Court Orders. Justice Richard Tracey found that Siminton’s repeated attempts to withdraw and transfer money frozen by the court, including gaining access to over $33,000 in a 16-week period last year, was "deliberate, calculated and disguised".

Justice Tracey went on: "I have concluded that Mr Siminton’s conduct constituted wilful disobedience and contumacious disregard of (the court’s) orders. His multiple contraventions are rendered all the more serious by reason of the fact that he had, by the time at which they were committed, been found guilty of a number of contempts constituted by breaches of orders which related to the same funds which are subject of the present charges."

In a contempt action initiated by APRA, Justice Tracey sentenced Siminton to a total of 12 months jail on each of eight charges for his efforts to access frozen money. In a separate contempt proceeding heard at the same time and initiated by the Federal Court District Registrar, Justice Tracey imposed a sentence of four months imprisonment relating to Siminton’s failure to pay a fine imposed in respect of a previous contempt conviction in relation to APRA action against his unauthorised bank.

The sentences have been deferred pending the outcome of appeals by Siminton.

The Court had earlier appointed Colin Nicol of McGrathNicol as Receiver of over $1 million that had been frozen in various accounts. Mr Nicol will try to identify all those who had made deposits in the unauthorised bank in order to return available funds. The Court has also ordered that Siminton pay APRA’s legal costs of the Federal Court proceeding.

Justice Tracey found that Siminton, the self proclaimed ‘Governor of the Principality of Camside’ and the ‘State of Sherwood’ in Melbourne's South Yarra, deliberately contravened the Banking Act 1959 by setting up his unauthorised bank in around January 2004.

APRA commenced proceedings restraining Siminton from conducting unauthorised banking business and seeking to freeze funds in certain bank accounts after it learned Siminton had been advertising his ‘bank’ on the internet and at other public events promising returns of up to 50 per cent or more a year.

The Banking Act prohibits anyone from conducting a banking business without the appropriate authority. It also prohibits the use of words that suggest the carrying on of a banking business. Depositors in authorised banks are protected by prudential requirements.

Depositors in unauthorised entities have no such security.

After APRA began its legal proceedings, the court ordered that Siminton immediately discontinue the operation of his unauthorised bank, cease advertising it as a bank and that all funds be frozen pending a hearing. After the Banking Act proceedings were commenced, APRA initiated a campaign that included advertising in key newspapers in Australia, calling for people to come forward who had put money into ‘Terra Nova Cache’.

The Banking Act matter was heard in October this year and in the November hearings Justice Tracey permanently restrained Siminton from:

• receiving money from members of the public by way of deposit in the unauthorised bank Terra Nova Cache or the so-called Principality of Camside;
• assuming or using the words ‘bank’, ‘banker" or " banking" or any words or phrases of like import, in relation to his business; and
• advertising, representing or stating that he will carry on banking business.

In handing down his judgement in APRA’s original Banking Act proceedings, Justice Tracey found that "the evidence suggests that Mr Siminton, from time to time, drew on depositors’ funds for his own purposes" and that he "deliberately embarked on a course of conduct which has involved contraventions of the Act". Siminton has lodged an appeal from this judgement.

Justice Tracey also found that Siminton "has not acknowledged that any of his conduct has been unlawful nor has he expressed any willingness to desist from future conduct which would constitute a contravention of the Act".

APRA maintains a list of all authorised deposit-taking institutions such as banks, credit unions and building societies on its website www.apra.gov.au. Enquires can also be made by calling APRA on 1300 13 10 60.

The Australian Prudential Regulation Authority (APRA) is the prudential regulator of the financial services industry. It oversees banks, credit unions, building societies, general insurance and reinsurance companies, life insurance, friendly societies, and most members of the superannuation industry. APRA is funded largely by the industries that it supervises. It was established on 1 July 1998. APRA currently supervises institutions holding approximately $3 trillion in assets for 21 million Australian depositors, policyholders and superannuation fund members.

Media and industry inquiries only:
Stuart Snell, Head of Public Affairs
Australian Prudential Regulation Authority
Telephone: 02 9210 3384
Mobile: 0407 250 276

All other inquiries:
APRA Contact Centre 1300 131 060.