The Federal Court has sentenced Peter Foster to three years imprisonment, with 18 months to be served and 18 months suspended, for contempt of court.
Justice Logan also placed conditions on Mr Foster’s involvement in the weight loss, cosmetic or health industry for a further three years.
“This decision shows that the ACCC and the Court regard deliberate breaches of court orders very seriously,” ACCC Chairman Rod Sims said.
In September 2013, Justice Logan found Mr Foster guilty of contempt of court orders made by the Federal Court, in ACCC v Chaste Corporation Pty Ltd (in liquidation) & Ors (Chaste) in 2005.
The Court found Mr Foster was directly knowingly concerned in the conduct of Sensaslim, a weight loss business, in breach of the court orders.
Justice Logan found that Mr Foster engaged in ‘a deliberate course of conduct’ and had an ‘intimate involvement from inception with and control of Sensaslim’s operations'.
In handing down his sentencing judgment yesterday, Justice Logan noted this case was an ‘extremely serious contempt’ and that ‘it was difficult to envisage a more flagrant and deliberate breach’. He found that Mr Foster was ‘directly culpable’ and ‘utterly without remorse or contrition’.
In deciding the penalty, Justice Logan expressly took into account that the conduct was not victimless. He noted that ‘Foster’s subterfuge and deliberate breach denied investors the real benefit of making an informed decision’ and that the conduct was ‘deliberate, flagrant and directed wholly to mercenary ends’.
Justice Logan also made orders for $125,000 paid to the Court as surety for the release on bail of Mr Foster to be forfeited to the Commonwealth, a warrant has been issued for his arrest and imprisonment.
On 11 November 2011, the ACCC commenced proceedings against Mr Foster for breaching orders in Chaste, which operated until 2 September 2010. The ACCC alleged that from December 2009 to 2 September 2010 Mr Foster was:
- directly or indirectly knowingly concerned in the promotion or conduct of the business of Sensaslim which was a business relating to weight loss, and thereby breached order 27 made against him in Chaste;
- knowingly concerned in Sensaslim, making or permitting to be made representations as to the particular standard or quality of the Sensaslim Solution, without providing the representee, prior to making the representation, with a copy of the Chaste orders, or informing the representee of the existence of the orders and giving the representee the address of the Federal Court website, and thereby breached order 29 of Chaste.