Despite his "foolproof" sports-betting scheme haemorrhaging money, Michael Pryde recklessly invited friends, family and more to gamble away thousands of dollars of their funds.
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In the end, he lost over $1 million of their money in the failed scheme as he tried to beat the odds and recoup his losses.
"I have continued to bring on new clients as a way of paying out clients of old and all this has created a fraudulent cycle of behaviour from myself," he wrote on an iPhone note in July 2022.
"There is no excuse for what I have done, it is as unethical as it is illegal."
The 32-year-old ran the Simply The Bets scheme with a promise that his self-made algorithm would bring about big wins for participants betting on golf, horse racing, basketball and baseball.
"A foolproof sports betting system designed to make you big long-term profits... guaranteed," his profile on X, previously known as Twitter, still reads.
But the profits were never guaranteed and the 32-year-old was later declared bankrupt ahead of his sentencing on Thursday for defrauding $1.2 million from 20 victims.
Inviting participants to deposit money into the scheme, he would then place bets and take 20 per cent of the winnings.
While the algorithm worked initially, his gambling became more reckless and he started losing money, Magistrate Scott Nash said at Sydney's Downing Centre Local Court.
Between 2018 and 2023, the 32-year-old asked friends and family to join so he could use their funds to try recouping losses experienced by those who had made deposits earlier, Mr Nash said.
"His motive was to try and repair, albeit deceptively and dishonestly, the damage to the business caused by the haemorrhaging losses it was experiencing over time," he said.
While Pryde defrauded more than $1 million from victims, he did not use the funds to live a lavish lifestyle.
The scheme was not a sophisticated one, Mr Nash noted, pointing out that it was a straightforward gambling enterprise.
Pryde also created a fraudulent document dramatically inflating the balance he claimed he had in a Commonwealth Bank account in a doomed effort to try to postpone bankruptcy proceedings.
He earlier pleaded guilty to one count of dishonestly obtaining a financial advantage or causing disadvantage by deception and one count of using a false document to obtain a financial disadvantage.
Supported by his father in court, Pryde was sentenced to a two-year intensive corrections order, which he will serve in the community.
Mr Nash said the Sydney man showed real signs of remorse and contrition for his actions, and genuinely wanted to repay his victims.
In another note found by police on his iPhone, Pryde admitted running a Ponzi scheme for eight years.
"So basically I'm a criminal," he wrote in November 2022.
The magistrate declined to impose a full-time sentence, saying it would impede the 32-year-old's treatment for his gambling problems and prevent him from becoming a socially beneficial member of society.
Pryde will have to serve 202 hours of community service and will be made to attend mental health treatment during the next two years.
He has also been ordered to repay $100,000 to his victims, the maximum allowable through NSW's local court system.
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Australian Associated Press
