Mr Moore said the term was used with evidence, as the provisional liquidator had explained that investor funds were used to buy assets that did not generate an income or did not expect to for some time.

The use of the term “Ponzi” to describe Mayfair has been debated previously in the lawsuit that led to Justice Stewart Anderson finding Mr Mawhinney and the Mayfair 101 Group engaged in misleading and deceptive conduct in raising funds from the public.

ASIC maintained that three products in the Mayfair suite had the “hallmarks of a Ponzi scheme”, which Mr Mawhinney had rejected, instead arguing he was engaging in capital management.

Investors were not sophisticated

Justice Anderson did not rule on that definition, and his judgment noted that ASIC ultimately contended “that nomenclature is of little [importance] and the inherent and undisclosed risks to unsophisticated and inexperienced Australian investors is the overriding concern”.

Mr Moore said in the penalty hearing on Tuesday that Mayfair’s advertising targeted “unsophisticated people” and provided some user reviews on the Trust Pilot website as evidence.

“The inference is clear that many people that invested in Mayfair were not sophisticated people,” Mr Moore said.

In total, Mr Mawhinney’s group raised over $200 million from investors that qualified as sophisticated under the Corporations Act through the IPO Wealth and Mayfair Platinum brands.

The products offered cashed-up widows, retirees and…

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