bodyType

customContents

entityId

entityUuid

articlePageQuery

filter

article

articleBaseAdvertisingInfoArticle

articleListArticle

articleSeoArticle

hooksArticleAcknowledgementGateOverlayArticle

hooksTrackPageViewArticle

hooksContentInterestArticle

articleLinkingDataContent

hooksAmpRedirectArticle

articleSchemaContent

liveArticle

advertZone

sentiment

contentLock

topics

types

sections

paywallTypes

createdDate

publishedDate

sponsorType

urlAlias

moreOnThisArticles

commentCount

authorLocations

authors

corrections

displaySlideShow

multimediaEmbed

printHeadline

seriesContainer

articleSpeeches

socialHeadline

headline

images

flag

firstTopic

glossary

flattenTypeIds

image

relatedLinks

relatedNewsletters

__typename

sponsor

pdfFiles

seriesReverseOrder

series

disableOffPlatformContent

published

updatedDate

summary

subHeadline

body

keywords

readingTime

customTimezone

liveContents

SCMP Reporter

AN entrepreneur accused of conning thousands of people into paying a total of $78 million to grow milk mould for cosmetics was yesterday jailed for four years and nine months.

  Australian businessman, Robert Walsh, 62, was also fined $250,000 by Mr Justice Leonard in the High Court.

  The court had heard Walsh set up a vast network of growers to cultivate the mould in their homes using lactic powder bought from his company.

  Breckenridge Corporation, which promised growers a minimum of $3,000 a month for three hours work, then bought back the mould to turn into cosmetics for their ''series 333 line''.

  Walsh said when he and his wife Susanna Wong Sau-ping, 43, set up the scheme he was convinced it would be ''the biggest thing Southeast Asia had ever seen''.

  But Breckenridge went into liquidation in July 1991 with a deficit of more than $28 million and owing growers almost $40 million, the court heard.

  Prosecutor Bernard Ryan said by then, Walsh had tricked 3,400 people into paying a total of $78 million for lactic powder worth less than $600,000.

  The court heard $12 million still remained unaccounted for and the current owner of the company Michael Taylor had fled to the Philippines.

  Yesterday the jury convicted Walsh of fraudulent trading between April 1990 and June 1991 after nearly 11 hours deliberation. He was also found guilty of two counts of theft totalling nearly $2 million.

  But he was cleared of conspiring with Mr Taylor to defraud shareholders, creditors and growers of $4 million.

 Ms Wong was acquitted of one charge of fraudulent trading. After the verdicts she collapsed in tears and left the court.

 Passing sentence, Mr Justice Leonard told Walsh: ''This is a serious offence, if not the most serious of its kind.''  He jailed Walsh for three years for each theft, to run concurrently, and three years for fraudulent trading to run partially concurrent, making a total of four years nine months.

 He also banned him from being a company director or manager for five years after his release.

  Liquidators Ferrier, Hodgson and Marfan are now expected to pursue a civil action against Walsh for unspecified damages.

 During the trial the court heard how growers, who invested between $4,000 and $32,000 for the lactic powder, were promised up to $6,000 a month by selling back the mould.

  Breckenridge also invited growers to put part of their earnings into investment schemes, but participants never received a cent back.

 Key witness Li Meocre, a partner with Arthur Andersen and Co, said if the growers had been paid as promised it would have cost $59.9 million to run the scheme for just one year.

  But Mr Li said Breckenridge could have grown the lactic ferment for just over $2 million a year if they had set up a factory with five employees.

 Tests showed the Series 333 line of cosmetics did not contain any lactic ferment which had no commercial value whatsoever.

 The jury also heard how Walsh had taken out $1,560,600 and $400,000 from Breckenridge funds in January and March 1991.

 Outside court Acting Chief Inspector Jeremy Dicker said he hoped the verdicts would deter conmen operating similar frauds.

 He said: ''These schemes have been around for some years and are carried out in many countries.''   Chief Inspector Dicker said most of Breckenridge's victims were housewives or people on low incomes and he warned the public to steer clear of get-rich-quick offers.



Milk mould trickster jailed for $78m scam