"Ponzi scheme mastermind" Melissa Caddick is likely dead but uncertainty about when that occurred is causing issues for scammed investors trying to recoup lost funds, a court has been told.
The self-styled financial adviser went missing in November 2020 after the corporate regulator sought to freeze her assets and wind up her company Maliver.
The 49-year-old Sydney woman is accused of faking documents to swindle more than $30 million in funds, including those invested by trusting family and close friends.
She returned $8.5 million, but liabilities now outweigh assets by between $15 million and $23.7 million, the Federal Court has been told.
"Our submission is it is plain that Ms Caddick formed and used Maliver as a vehicle to perpetrate quite an elaborate fraud," Farid Assaf SC, for corporate regulator ASIC, said on Wednesday.
"(Maliver was used) to disguise the fraudulent Ponzi scheme of which she was the mastermind."
ASIC says the "quite exceptional facts" of the case mean the court could and should make orders effectively creating a "single insolvency regime" in which the remaining assets are pooled now.
Maliver was effectively a facade for Ms Caddick's earlier swindling, leaving one available pool of assets that could be more quickly distributed to investors and creditors, Mr Assaf said.
But Justice Brigitte Markovic expressed caution in light of Ms Caddick's "indeterminate status".
The only part of Ms Caddick found since her disappearance was her partial, decomposing foot, which washed up in a running shoe on a beach about 400km south of Sydney in February 2020.
Asked to address "the elephant in the room", Mr Assaf said he must accept "on the balance of probabilities, Ms Caddick is ... may be deceased."
But apart from appointing receivers to take control of her property, there was no one who could practically represent Ms Caddick's interests without a clear date of death, Mr Assaf said.
Bankruptcy law requires a date of death for a trustee to be appointed.
The date of death could be determined by a coroner but it was still unknown if an inquest would be held, the court was told.
Justice Markovic said she understood the benefits of allowing one receiver to sit over all of the assets of Ms Caddick and her company.
But jumping over regular steps in an effort to make the process simpler could result in more complexity should competing claims - such as on her estate - eventuate down the track.
"The shortest route must be the one where there are no hiccups along the way that must later be unravelled," she said.
Ms Caddick is unrepresented in the proceedings.
A contradictor, appointed to make submissions in her absence, told the court he wouldn't oppose an order that Caddick had unlawfully operated without an Australian financial services licence from 2012 to 2020.
The court's been told Ms Caddick convinced customers of her "prowess in creating wealth" before sending regular but entirely fictitious portfolio evaluations.
In reality, she used investors' funds to buy real estate, motor vehicles, artworks and jewellery, Mr Assaf said.
One man who'd known Ms Caddick since he was a child, trusted Ms Caddick with $1.3 million for retirement and investment purposes.
"He's received nothing," Mr Assaf said on Wednesday.
The hearing continues.
