Investors defrauded by Melissa Caddick before her disappearance and death will recoup a portion of their $23m in losses after settling a class action lawsuit with her auditors.
Victims have already been repaid $7.25m 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.
The federal court Justice Brigitte Markovic on Monday signalled a further win in the proceedings, approving a $3.5m settlement that the five auditors agreed to in September.
“It’s a great outcome for the group members,” the class action law firm Mackay Chapman’s director Michael Chapman said.
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 $3.5m will go to the solicitors at Mackay Chapman and litigation funder Therium, which backed the lawsuit.
Melbourne-based Mackay Chapman will get about $1m 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% on the fees owed to ensure that at least 50% of the settlement returned to the victims.
“We wanted to ensure that justice was done,” he said.
The remaining $1.73m in funds is expected to be returned to investors within a month.
Caddick, a self-styled financial adviser, plundered $23m from family and friends via an investment scam to live a life of luxury.
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Bruce Gleeson, from liquidators Jones Partners, said in 2024 investors would recover about 32c in the dollar.
Caddick, 49, disappeared in November 2020, days after her luxury home in Sydney’s affluent east was raided by Australian Securities and Investments Commission (Asic) agents investigating her Ponzi scheme.
Caddick engaged in “a sham or facade”, using her company Maliver to transfer investor funds, Markovic found in November 2021 in a separate federal court lawsuit brought by Asic.
Maliver was used to conceal that victims’ funds were not used to buy shares for their self-managed superannuation funds, but rather spent on Caddick’s lavish lifestyle, the judge said.
The 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 New South Wales south coast 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.