Youpla Directors Disqualified Over Collapsed Funeral Fund Scandal

The Federal Court of Australia has issued bans and fines against three former directors of the Youpla Group, a collapsed funeral fund that previously operated as the Aboriginal Community Benefit Fund (ACBF). This legal action follows a long-running investigation into the Youpla Aboriginal funeral fund, which targeted Indigenous communities across Australia with insurance policies that ultimately left thousands without coverage. Justice Geoffrey Kennett ordered the trio to pay a combined $90,000 in penalties and disqualified them from managing corporations for periods ranging from five to 10 years.

Jonathan Law was ordered to pay $50,000 and banned for six years, while Michael Wilson and Geoffrey Clayton were each fined $20,000 and banned for 10 and five years, respectively. The court found that the directors failed to act with the necessary care and diligence, neglected to manage conflicts of interest, and caused significant detriment to their members. In addition to the fines, the group was ordered to pay $17,000 toward the plaintiff’s legal costs.

Governance Failures and Misconduct

These penalties follow a separate judgment involving the company’s founder, Ron Pattenden, who was ordered to pay $250,000 and barred from management for 15 years after admitting to breaches of duty. The Australian Securities and Investments Commission (ASIC) initiated proceedings in 2023, alleging that the directors maintained insurance arrangements with a Vanuatu-based company, Crown Insurance, which was controlled by Pattenden and Law, rather than acting in the best interests of the ACBF members. Former chief Bryn Jones was also found to have breached his duties, with his penalty to be determined at a future hearing.

For decades, the fund marketed its products to Indigenous Australians by utilizing the colors of the Aboriginal flag and distributing items like children's toys and books. The company collapsed in March 2022, leaving more than 13,000 people without funeral coverage. Many affected families, including those with elderly relatives in palliative care, were forced to rely on crowdfunding or were unable to bury their loved ones immediately.

Former directors of the Youpla funeral fund have been banned and fined for breaching duties to Indigenous clients.

Why it matters

The collapse of the fund caused widespread financial and emotional trauma for low-income Aboriginal families who were misled by junk insurance policies. The federal government has since introduced a $97 million support package to assist those affected, with payments available until December 1, 2024.