On 30 June 2005, in the first refund of its kind, Denara Nominees - a PricewaterhouseCoopers company appointed by APRA as acting trustee of the Perth‑based Australian Independent Superannuation Fund (the Fund) - repaid $240,347 of a grant received from the Commonwealth in June 2002 under the Superannuation Industry (Supervision) Act 1993 (the SIS Act).

The SIS Act contains financial assistance provisions under which superannuation funds can be compensated by the Commonwealth for money lost through fraud or theft, if the Minister considers such assistance to be in the national interest. Any civil recoveries obtained by the acting trustee are normally required to be returned to the Commonwealth as (part or full) repayment of the Government’s assistance.

APRA’s Deputy Chairman, Mr Ross Jones, said the repayment of the Commonwealth grant marks the first time an amount has been repaid to the Commonwealth under the financial assistance provisions of the SIS Act.

'It is pleasing to see money lost through fraud recovered and paid back, so that the Commonwealth can reduce the burden of financial assistance levies on average fund members’, he said.

The repayment of the grant will reduce the Financial Assistance Levy applied to all APRA‑regulated superannuation funds for financial year 2005/06.

As a result of the grant and the acting trustee’s actions, Fund members had their account balances restored to approximately the levels they had been advised of before the fraud. Member benefits have been rolled over to other funds, and the Fund has now been wound up.

Background

In 2000, APRA replaced the then trustee of the Fund with an acting trustee.

In 2000, Mr Lindsay Dods, a former trustee director of AISF, pleaded guilty to defrauding the Fund of about $400,000 of its $900,000 assets, and was sentenced to a jail term in Western Australia.

The Fund subsequently received an $812,020 grant of financial assistance from the Commonwealth for losses due to fraud. The grant covered 90 per cent of the direct losses and the consequential costs incurred by the acting trustee for its administration work and recovery action. A condition of the grant required the acting trustee to pursue all reasonable efforts to recover the money lost due to fraud.