The devastating effects of an alleged Ponzi scheme targeting Australian superannuation savings have led to the tragic death of one victim.

The individual reportedly took their life after losing their superannuation savings in the collapse of First Guardian and Shield investment funds, leaving behind a trail of devastated investors and families.

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First Guardian and Shield, which are believed to have been masquerading as legitimate superannuation funds, are now being investigated for allegedly being sophisticated Ponzi schemes.

Mark Farnsworth, an investor who reportedly lost $650,000, expressed his despair telling 7NEWS on Sunday night: “I don’t even know if I can have the heater on at this stage.”

His story mirrors that of others, including food importer Juan Carlos Sanchez, who allegedly lost $120,000 in the same fraudulent scheme.

Sanchez issued a warning to Australians: “If it can happen to 12 thousand, it can happen to the other 17 million.”

“One person has taken their life over this.

“Act now, stop being silent.”

Victim pleas ignored

Victims’ desperate pleas for help have allegedly gone unanswered and they claim the corporate watchdog, ASIC, has yet to deliver meaningful results.

Slater and Gordon, a leading Australian law firm, is now investigating a potential class action that could offer affected investors a path to justice and compensation.

Australia’s $4 trillion superannuation system, meant to protect the retirement savings of millions, has been shaken by the alleged collapse of First Guardian and Shield.

Allegations against the scheme reportedly date back to 2019, but it seems the investigation has only gathered momentum in recent months.

At the center of these operations were directors David Anderson and Simon Selimaj, whose assets have reportedly been frozen by the Australian Securities and Investments Commission (ASIC).

With the investigation expected to take at least a year, victims feel abandoned and left without immediate recourse. One said, “One person has taken their life over this. Act now. Stop being silent.”

Compensation claims through the Australian Financial Complaints Authority (AFCA) are reportedly capped at just $150,000, an amount many claim doesn’t even come close to covering their losses.

Investigations ongoing

In the aftermath of the collapse, David Anderson has allegedly been forced to vacate his $9 million mansion in Hawthorn, with authorities changing the locks on the property.

However, despite this, critics allege Anderson may have allegedly moved more than $270 million offshore, with ASIC’s slow response allegedly allowing this to happen.

As the investigation continues, the victims’ pain is growing.

Many express frustration over the delays and lack of action from both ASIC and the alleged perpetrators.

With the investigation expected to drag on for at least a year, the crisis is far from over, and the fight for justice is just beginning.

ASIC response

A spokesperson for the Australian Security Insurance Commission told 7NEWS:

“It is not the case that $270m was moved offshore after the commencement of ASIC’s surveillance.

ASIC has undertaken extensive work on the First Guardian matter and has acted on the available information.

This is work is complex, and ASIC does not accept that it has delayed its investigative work in the manner alleged. In matters of this kind, we need to carefully investigate the operation of managed investment schemes before we decide what action to take in a way that does not precipitate investor losses.

ASIC has taken a range of enforcement action in relation to this type of misconduct over many years, including in 2020 against Smart Solutions Group (Aust) Pty Ltd. We have escalated our response across enforcement action and consumer education due to the scale of industrial misconduct.

ASIC has been giving guidance and warnings about super switching since super choice was first introduced in 2005.

Over the last 12-18 months ASIC has become increasingly concerned with what appears to be a significant increase in unscrupulous business models, on an industrial scale, that deprive people of their superannuation savings. This is commonly done through high pressure selling and promises of better returns, in exchange for the investment of superannuation savings into complex and risky schemes.

ASIC’s surveillance activities and investigations in relation to these unscrupulous business models have been assisted by reports of misconduct. Every single report of misconduct provided to ASIC is reviewed and actioned based on the information available, and the resources available to ASIC for investigations.”

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