Three victims tell how they moved on after suffering a major financial loss

FBI on the case

She was invited to drinks and canapés on multi-million-dollar yachts with other investors. Friendships were built.

When she sold an investment property in Broadbeach on the Gold Coast for around $600,000, she poured in what was left over after paying out the mortgage.

Beirne never saw another cent. She had been caught up in an elaborate international Ponzi scheme targeting Australians. The money was lost to a purported foreign exchange and commodities trading scheme.

The investment scam went on for at least two years until the US Securities and Exchange Commission froze the finances of the man at the centre of the con and laid charges in 2009 after he was unable to pay investors their capital.

A Queensland woman was jailed, but the acquaintance who introduced Beirne to the scheme escaped punishment. Reports to police and meetings with lawyers amounted to nothing. She was interviewed by the FBI in the US, but her money was never recovered.

All up, Beirne lost nearly $500,000 in the scheme. Her son and daughter-in-law had also borrowed to invest, losing $40,000.

The local acquaintance appears to have kept his name clean despite the part he played in the Ponzi scheme. “He was just outside of it all, ushering us all through the door to Kingdom Come,” she says.

But Beirne also accepts some responsibility, admitting she didn’t do her due diligence. “I should have asked for more proof about how the scheme worked. I should have asked my own stockbroker what he thought. Hell, I could have walked away.”

Scammers emptied Tim’s bank account

Melbourne small business owner Tim Watkins was mid-way through a supermarket trip when he received a text message under a thread of legitimate correspondence from his bank telling him that $850 had been withdrawn from his account. The text included a phone number for his bank, and asked him to call if he needed the transaction to be reversed.

Watkins called the number and followed the instructions of the person on the line because he believed these steps would help to protect his account. They also asked him to share a one-time passcode sent to him, which meant he unwittingly had unlocked his bank account for the scammer to access as they pleased. “The person on the end of the line made me feel like I was about to lose more money if I didn’t act.”

Sharing the passcode allowed the scammer to gain remote access to his personal and business bank account, making 10 withdrawals totalling $223,000.

Tim Watkins lost more than $230,000 in a scam. 

To add insult to injury, his bank refused to offer him a line of credit to cover his bills, forcing him to use his offset mortgage to honour payments due in the coming week.

As a victim of fraud, Watkins presumed the bank would acknowledge a degree of liability and offer financial compensation. But after dozens of hours locking horns with the bank, he accepted the money was gone.

“The current legislation means the liability is always with the customer,” Watkins says.

After countless interactions with his bank, reporting the matter to police and the industry watchdog, he had all but given up. Eventually, his bank refunded $29,000.

Tim will never forget the gut-wrenching moment he realised his account had been drained. He felt embarrassment at his stupidity, explaining he was mentally juggling a million things when he received the text. Another day, another time, he would have realised it was a scam, he says.

Watkins remains on medication for sleeplessness and anxiety and continues with regular visits to his psychologist to help overcome the trauma of the event. Retelling the story opens a pandora’s box of emotions for him.

“It has affected me in so many ways, but I can’t take time off work to deal with it,” Watkins says. “The loss of the money is only part of it. Your stupidity eats away at you. I can’t trust, and I know it will take a long time to get over the mental trauma.”

A matter of trust

The effect of financial loss can be particularly traumatic when you have built a relationship over time.

As previously reported by The Australian Financial Review, Mark Gell lost nearly $300,000 in an investment in Scale Australia Investing after building a rapport over several meetings with Sydney businessman Mike Boorn Plener.

Gell lost all of his initial $200,000 investment and a further $60,000 in services rendered, $16,000 on an unpaid coupon and forked out a significant sum on legal costs. A further three Sydney businessmen also revealed they had invested with Plener, losing a collective $155,000.

While the Financial Review does not suggest Gell’s failed investment with Plener was as a result of unlawful conduct, Plener received a good behaviour bond after pleading guilty to failing to assist a liquidator.

And a lack of unlawful conduct matters little to Gell, who says he’s had sleepless nights, not so much over the money, but due to the breach of trust.

“It’s something I just can’t get my head around sometimes,” he says.

“It’s difficult to comprehend, but health and life are more important. I find that by taking ownership for what happened and moving on rather than adopting a victim mentality helps me move on.”

Gell is nevertheless adamant he will never trust others with money again.

Stuck in grief

Financial wellbeing therapist Jane Monica-Jones says victims of fraud present to her because they can’t sleep, have lost their appetite, feel fatigued or constantly agitated and exhausted.

“Most people I speak to are in disbelief, feel worthless and can be deeply self-critical, which has social implications moving forward,” she says. “Hyper-vigilance and dropping out of friendship groups is also common.”

Like death, losing large sums of money pushes a person into the five stages of grief: denial, anger, bargaining, depression and, finally, acceptance.

It takes around a year to move through the stages, but a large financial loss can cause someone to get stuck in any of these stages, depending on a person’s psychological resilience.

Monica-Jones says financial grief is a chronic process for a person that can diminish our capacity to cope with other parts of our lives.

“The shock on our body is massive. People can be highly stressed, and cognition can be reduced.”

A failure to recover can cause chronic health problems.

“It can be very draining to have high levels of cortisol running through our body, which can create anxiety or ongoing depression,” Monica-Jones says.

At 77, Beirne continues to work part-time because she can’t afford to retire.

Going through a divorce and then losing nearly $500,000 in the Ponzi scheme completely upended her retirement trajectory. After losing the Noosa house, Beirne managed to buy a plot of land in the back of Nanango for $144,000 with the last of her super, where she built a tin shed, which she lined and made into a comfortable home.

“It’s just like someone pulls the rug out from under you,” she says. “By the time I cover the bills, I’m skint and I have nothing to fall back on.”

While she’s grateful for what she has, she admits that it’s been an embarrassing fall from grace for someone well-known and respected in her community.

Beirne says she carried terrible shame and humiliation for years but has worked hard to move on emotionally. The pain in her voice is palpable. “No one ever handed me anything on a platter. I worked hard for every penny I ever had. To earn that much money back is impossible later in life. It’s just gone.”

Finding peace

Looking back, Beirne recognises that she was groomed over several months by a man she trusted.

While she was naive to trust, that was her nature. “If you start to distrust everyone, you become cynical, and that’s not who I am, still to this day.”

Nearly two decades after her financial loss, Beirne has found solace, forging a new romantic relationship with a man who makes her laugh.

“Being bitter and boring everyone with my tale of woe until they’re all sick to death of hearing it just makes you bitter and doesn’t achieve anything.”

To her horror, she bumped into the acquaintance at a funeral recently. “He walked up to me, bold as brass, but I told him not to speak to me. You just have to hope that the cops or karma will eventually get him.”

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