A man who induced people to invest in an Internet radio station has been sentenced to 500 hours of community service after he pleaded guilty to 11 charges brought by the Australian Securities and Investments Commission (ASIC).
Paul Hodges was sentenced in the New South Wales district court today after he previously pleaded guilty for 10 counts under the Corporations Law of making statement that he knew to be false, which induced people to deal in securities.
Hodges made false statements that induced 10 people to invest approximately AU$240,000 in the Talk Australia project between August 1999 and August 2000.
Hodges also pleaded guilty to one count under the Corporations Law of being a disqualified person acting in the management of a corporation.
The Talk Australia project, operated by Talk Australia Pty Limited, involved the building and operating of an Internet radio station that was sold as offering talkback and news services.
A studio was built in Glebe, NSW and went on air on 16 October 2000. The station operated for one month before being closed down on 17 November 2000 due to insufficient funds.
Hodges's false statements included promises that high profile announcers such as Ray Martin would appear on the station. He also claimed that Ozemail had a contract with Talk Australia and would be putting in up to AU$600,000, and that six foundation advertisers had already put in AU$100,000 each.
Hodges was ordered to perform 500 hours community service on each of the 10 counts of making a statement that was known to be false and 100 hours community service on one count of being a disqualified person acting in the management of a corporation. The community service orders are to be served simultaneously.
Approximately AU$445,000 in "seed" capital was raised from 46 members of the investing public from August 1999 to September 2000.