Businessman Sentenced to 12 Years in Prison for $395 Million NDIS Fraud
The businessman admitted to 2 counts of falsifying documents and 2 counts of obtaining financial advantage by deception.
A businessperson was sentenced to 12 years in prison for tricking two Korean companies into providing tens of millions of dollars in connection with a National Disability Insurance Scheme (NDIS) scam.
In 2019, Demotrios “James” Charisiou, aged 63, deceived two Korean-based companies into giving his company, LBA Capital, $394.7 million (US$261 million) in credit, claiming it would be invested in NDIS-supported properties in Melbourne.
No properties were purchased, and most of the funds remained in an account.
In November 2023, the businessman pleaded guilty to two counts of falsifying documents and two counts of obtaining financial advantage by deception.
Speaking at the Supreme Court of Victoria on May 24, Justice John Champion described the 2019 scheme as sophisticated and complex, with Mr. Charisiou creating fake documents to execute his plan.
Justice Champion noted that Mr. Charisiou met with representatives from JB Asset Management and KB Securities, the Korean companies, when they visited Melbourne.
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The judge characterized Mr. Charisiou’s deceitful actions as “astounding.”
“Due to your own actions, you have lost much that formed the basis of your lifestyle,” the judge said to Mr. Charisiou.
“The extent of your fraudulent conduct was incredible, although it must be understood in context.”
Justice Champion mentioned the risk that Mr. Charisiou’s abilities and background could empower him to carry out further fraudulent acts, suggesting that the businessman’s motivations could be rooted in his ego and “delusions of grandeur.”
“As a prosperous entrepreneur with an exaggerated sense of self-importance stemming from your hypomanic state, the idea of reneging on the agreement or publicly failing yourself was likely unappealing,” the judge remarked.
Mr. Charisiou will be eligible for parole after eight years. He has already spent over 190 days in custody.
NDIS Vulnerable to Fraudsters
The $42 billion NDIS has become a target for fraudsters and scammers, with over 100 cases of suspected fraud in the NDIS appearing in court in April.
According to federal budget papers released on May 14, the government plans to invest an additional $468.7 million (US$310 million) into the publicly-funded scheme to put it “back on track.”
The funding includes $268.1 million to “enhance protection for NDIS participants and prevent fraud” and $200.6 million for “development and consultation” based on the main recommendations from the independent NDIS review.
In August 2023, NDIS Minister Bill Shorten revealed that the proportion of criminal investigations related to scheme payments had increased to 46 percent, up from 38 percent in April.
“When government funds are involved, some people—opportunists, criminals, and others—are attracted to diverting this money for their own gain, rather than for the benefit of participants,” Mr. Shorten stated at that time.
“There are individuals in the Australian community who have been taking money from participants, defrauding people under the scheme, sometimes not just unethically but criminally.”
AAP and Henry Jom contributed to this report.
