A group of men who oversaw a scheme that wiped out $530 million of the super savings of nearly 6000 people could face millions of dollars in fines and orders banning them from overseeing companies.
Paul Chiodo, the operator of the Shield Master Fund, was on Friday hit with formal action by the corporate watchdog for the collapse of the fund in 2024.
The Australian Securities and Investments Commission alleges Chiodo and his colleagues transferred $305 million of investor money to Chiodo’s private companies to fuel his dreams of building a portfolio of ultra-luxury resorts in Venice, Fiji, Port Douglas and K’Gari (Fraser Island) without investors’ knowledge.
The troubles at Shield, including the transfers of vast sums of investor money, was first revealed by an investigation by this masthead two years ago.
ASIC alleges the transfers were made despite the Shield Master Fund telling investors their money would be invested in more traditional vehicles such as shares in ASX companies.
The allegedly illegal transfers included $30 million being paid out for the building of a luxury resort project in Fiji where there was no construction and millions more being paid out to build the Port Douglas resort when there was no development approval in place.
A further $64 million of investor money – or 12 per cent of the superannuation invested – was allegedly paid to “lead generators” who lured people to switch their money from larger superannuation funds.
ASIC also alleges $155 million of investor money was given to wealthy Melbourne entrepreneur Robert Filippini under the pretence that he would build a range of projects, though Filippini had no building background, no building licence and there were no contracts or invoices to explain the payments. Filippini is not named as a defendant in this ASIC action.
Investor cash was also used to fund Chiodo’s smaller property projects in Melbourne, most of which were not completed.
Chiodo’s colleagues Ilya Frolov and Mark Yorston, both directors at the company that oversaw the scheme, Keystone Asset Management, are also named as defendants to the ASIC action. They are all expected to vigorously defend the action. Chiodo and Yorston were contacted for comment. Frolov, who left Australia for Dubai in 2024, could not be contacted.
Macquarie Group, which had offered Shield as an investment option, has already agreed to pay $350 million in compensation to investors.
ASIC has already taken action against some lead generators, financial planners and other groups for their involvement in the allegedly rogue scheme.
ASIC chairman Sarah Court said the case reflected alleged failures in how hundreds of millions of dollars of Australians’ super savings were handled and protected.
“These proceedings are about holding those we allege to be involved to account and sending a clear message that directors operating schemes of this kind must act in investors’ best interests,” said Court.
ASIC is seeking fines and banning orders of Chiodo and his colleagues. It is not allowed to seek or recommend a specific amount for the fines or time for the ban.
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Sarah Danckert is a senior reporter who specialises in investigations and corporate wrongdoing. She is a two-time Walkley Award winner, and has won six Quill Awards and two Kennedy Awards.Connect via X or email.
