Investors defrauded by Melissa Caddick before her disappearance and death will recoup a portion of their $23 million in losses after settling a class action lawsuit with her auditors.
Victims have already been repaid $7.25 million after liquidators of the dead fraudster sold off her assets in 2023 and 2024.
The 32 investors also launched a class action in September 2023 seeking damages from the five firms who audited Caddick’s accounts between 2012 and 2020.
They claimed the auditors failed to identify fraudulent documents or identify whether shares the fraudster claimed were held in the victims’ self-managed superannuation funds existed.
Federal Court Justice Brigitte Markovic on Monday signalled a further win in the proceedings, green-lighting a $3.5 million settlement which was agreed to with the five auditors in September.
“It’s a great outcome for the group members,” class action law firm Mackay Chapman’s director Michael Chapman told AAP.
The lawsuit was aimed at getting the highest compensation for victims in the most efficient manner possible, he said.
The auditors did not admit liability in agreeing to the settlement.
Just under half of the $3.5 million will go to the solicitors at Mackay Chapman and litigation funder Therium, which backed the lawsuit.
Melbourne-based Mackay Chapman will get about $1 million in legal costs plus an additional $127,000 to send the remaining funds to investors.
Therium will be paid a commission of $492,000.
Chapman said the amounts represented a discount of about 70 per cent of the fees owed to ensure at least 50 per cent of the settlement returned to the victims.
“We wanted to ensure that justice was done,” he told AAP.
The remaining $1.73 million in funds is expected to be returned to investors within a month.
Caddick, a self-styled financial adviser, plundered $23 million from family and friends via an investment scam to live a life of luxury.
Bruce Gleeson, from liquidators Jones Partners, said in 2024 investors would recover about 32 cents in the dollar.
The 49-year-old disappeared in November 2020, days after her luxury home in Sydney’s affluent east was raided by ASIC agents investigating her Ponzi scheme.
Caddick engaged in “a sham or facade” using her company Maliver to transfer investor funds, Justice Markovic found in November 2021 in a separate Federal Court lawsuit brought by the Australian Securities and Investments Commission.
Maliver was used to conceal that victims’ funds were spent on Caddick’s lavish lifestyle instead of being used to buy shares for their self-managed superannuation funds, the judge said.
Coroner Elizabeth Ryan in May 2023 ruled Caddick was dead, but she was unable to determine the cause because most of her body had not been found.
The fraudster’s badly decomposed right foot, which was still attached to a running shoe, washed up on a beach on the south coast of NSW in February 2021.
Caddick’s husband Anthony Koletti was the last person to see her alive and declared her missing.
He withheld information relating to his wife’s disappearance and could not be ruled out from being involved, the coroner found.
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