​ASIC investigation sees former IT CEO jailed over AU$4.8m advancement

Peter Mavridis, former CEO of S Central Group, has been sentenced to four years and eight months behind bars, as a result of the active advancement of almost AU$5 million over a nine-month period.

The former CEO of the S Central Group of companies has been sentenced to four years and eight months in jail, following an investigation lead by the Australian Securities and Investments Commission (ASIC).

Peter Mavridis was found guilty by a jury in October in relation to 23 counts of obtaining a financial advantage by deception and 10 counts of false accounting under the Victorian Crimes Act. On Thursday, the County Court of Victoria issued Mavridis with his jail sentence, and a non-parole period of three years.

The investigation found that between January and September of 2009, Mavridis directed David Cologna, the financial controller of S Central Group, to submit duplicated or falsely inflated invoices to the National Australia Bank under a debtor factoring agreement, which ASIC said led to credit totalling approximately AU$4.8 million being advanced to companies within the S Central Group.

At the time of conviction, ASIC explained that debtor factoring involves the assigning of debts that are owed in exchange for credit advanced by a finance provider.

"In order to retain ongoing access to bank credit, Mavridis signed end-of-month reconciliations that disguised the falsifications and had them submitted to the bank," ASIC said.

In handing down his sentence, Judge Roy Punshon said that Mavridis' conduct was "deliberate, repetitive, and systemic" and that he had "used and exploited an employee" as part of the offending.

"Mavridis' sentence sends a strong message, particularly to heads of companies," ASIC Commissioner John Price said. "ASIC will use all means necessary to take strong action against those considering fraud or encouraging employees to behave in this dishonest manner."

In 2013, when ASIC investigated Cologna, it was not alleged he received any direct personal financial benefit from his conduct, but he pleaded guilty to five charges of falsifying books of a company contrary to section 1307 of the Corporations Act 2001, and was sentenced to 12 months jail, and suspended for two years.

The S Central Group -- which consisted of S Central Pty Ltd, S Central (NSW) Pty Ltd, S Central Products Pty Ltd, Expressapps Pty Ltd, and Infotronics Software Pty Ltd -- provided IT services to customers in Victoria, New South Wales, and Queensland.

In November 2009, two months after the period investigated by ASIC, S Central Group was wholly acquired by fellow services provider Brennan IT. At the time, Brennan IT's CEO David Stevens said the deal was signed to bolster his company's presence in regional Australia.

According to ASIC, the S Central Group companies entered liquidation at various times between November 2009 and April 2010, which left total deficiencies in excess of AU$7 million.