by Tony Keim November 08, 2011 The Courier-Mail

A US conman was an international fugitive when he fled to the Gold Coast and fleeced “mum and dad investors” out of almost $2.5 million almost a decade ago, a court has been told.

The Brisbane District Court was told David Elliott Kennedy, then aged 36, was poised to be jailed for ripping off 522 of his fellow countryman to the tune of $12 million in 2002 when he fled to Australia to set up a similar scam.

Kennedy ripped off Australian investors by setting up an unregistered managed investment scheme between October 2002 and April 2003 and swindled investors via a scheme allegedly financing various Gold Coast property developments.

Commonwealth prosecutor Paul Huygens said Kennedy, who used many aliases and gained entry to Australia using his own brother’s identity, marketed the scheme via a website, telemarketing and bogus prospectus offering investors returns of up to 18-and-a-half percent.

Kennedy also told investors his company had already acquired land at Main Beach and Robina and had plans approved to build multi-million complexes at both sites.

He said Kennedy raised $2.245 million dollars during the fraud, $2.2 million of which was siphoned into the so-called company account of First Foundation Developments Limited the front for his operation.

The court was told Kennedy’s scheme soured when the Australia Securities and Investments Commission became aware of his operation and froze the fugitive’s accounts after receiving complaints from investors.

Mr Huygens said Kennedy was able to pocket $1.3 million in ill-gotten gains into a personal account before fleeing the Gold Coast via Brisbane, Melbourne and then on to Dubai.

The court was told Kennedy made two failed bids to transfer frozen funds to the value of $1.2 million while in Rome, Italy, and $800,000 in Paris, France.

Mr Huygens said Kennedy was finally forced into custody when he tried to set up a similar fraudulent operation in Mexico and authorities there exiled him back into the US in July 2005.

The court was told Kennedy, who has been in custody since returning to the US, was sentenced to five years jail for his offences there and was deported to Australia upon his release on good behaviour in December 2010.

Upon his return to Brisbane it was revealed had scammed a total of 12 local investors – all “mum and dad investors”.

Kennedy, now aged 44, today pleaded guilty to 11 counts of dishonestly obtaining a benefit of $728,000 under section 408C(1)(d) of the Criminal Code (Qld) and one count of carrying on an unlicensed financial services business.

The court was told Kennedy used all of the money he fraudulently obtained to live the high-life – including to fund numerous prestige cars and live in plush and exotic accommodation.

Judge Michael Shanahan jailed Kennedy for six years, saying that combined with the US term totals 12 years imprisonment.

He ordered Kennedy, who has been in custody on remand for 333 days, be eligible for parole in February 7 next year.

It is likely Kennedy, who holds dual US and Canadian citizenship, will be deported upon his release.