relisting, page-5

Failed investment firm 'repaid' $150,000 to accountant

09feb06
AN Adelaide accountant invested $150,000 in a failed investment scheme despite admitting he would not recommend it to his clients.

But unlike about 80 investors who have been left about $60 million out of pocket, Nicola Formichella got his money back.

Mr Formichella, a partner in Melbourne St, North Adelaide, accounting firm BCFR, was examined in the Federal Court yesterday as part of an Australian Securities and Investments Commission investigation into the failed Mercorella investment scheme.

Mr Formichella said yesterday his firm performed accounting work for scheme operator Giuseppe "Joe" Mercorella, as well as Anthony Sobey, who is understood to be a life member of bikie gang the Gypsy Jokers.

Mr Formichella said he "invested with Joe Mercorella for a short period of time", investing more than $150,000, despite later saying he would not recommend it to clients because investors were given no indication of where the money was invested or any documentation about it.









ASIC has alleged the Mercorella scheme involved Mr Mercorella in accepting loans from people and companies in return for interest rates of between 2 and 5 per cent a month.

It collapsed in July last year and has been placed in liquidation.

Mr Formichella told the court yesterday Mr Mercorella was "extremely secretive" about where he invested the money.

Mr Formichella also revealed yesterday the BCFR trust account was used to funnel money from a company, owned by Mr Sobey, to Mr Mercorella and back.

He said he understood Mr Sobey's company made a commission on these transactions.

A company owned by Mr Sobey's wife, Tracey, is now claiming security over $17.4 million involved with the Mercorella scheme, which turned over more than $250 million from 2002-05.

As well as performing accounting work for some of Mr Mercorella's companies, Mr Formichella was a co-director of several companies with Mr Mercorella, including Australian Stock Exchange-listed companies Lion Energy and Entek Energy. Lion has yet to relist after its shares were suspended in August.

Julian Waterman, who was voted off the Lion board in December and is an associate of Mr Sobey's, is expected to be examined in the Federal Court today.