Westpac accused of enabling $250 million ‘Ponzi scheme’

Banking giant Westpac is being sued by liquidators of Perth businessman Chris Marco for allegedly enabling a $250 million Ponzi scheme.

The case dates back to early 2020, when the Australian Investment and Securities Commission (ASIC) accused Marco of operating an unregistered managed investment scheme while working without a licence.

Marco was found guilty by a Supreme Court jury earlier this month. The jury gave a unanimous verdict, finding him guilty of all 43 fraud charges totalling over $34 million to six investors.

While Westpac was not involved in the proceedings, it was revealed that Marco was holding hundreds of millions of dollars of investors’ funds in multiple Westpac accounts.

According to an AFR report, liquidators argue the scale and nature of these flows should have prompted intervention, particularly given Marco was not licenced to handle investor funds.

ASIC also began making inquiries into his accounts as early as August 2017, yet Westpac allegedly continued to accept investor deposits afterwards.

Special purpose liquidators from PKF, appointed to recover funds for victims, allege the bank “wilfully and recklessly failed” to act on obvious warning signs.

“Westpac had knowledge that Marco, trading as Coastline Group, was receiving and dealing with funds of investors and should have known he never held an Australian Financial Services Licence,” said the liquidators.

A Westpac spokesman said: ​​​​“We take our legal and regulatory obligations very seriously. We are defending the alleged claims. As the matter is still before the courts we won’t be commenting further.”

Marco is set to be sentenced on 30 October.

ASIC deputy chair Sarah Court said of his conviction: “Today’s guilty verdicts mark the end of a sorry chapter that many of Mr Marco’s investors would rather forget.

“This result delivers justice to investors who Mr Marco defrauded and speaks to ASIC’s painstaking investigation into this complex matter.”