It pays to listen to the skeptics: When something seems too good to be true, it probably isn't.

Simon Finnigan, an unlicensed financial planner and Ponzi operator in New South Wales, has pleaded guilty to charges of defrauding $1.96 million from investors between 2001 and 2007.

Finnigan described himself as a ''Robin Hood'' who could help investors earn more wealth using his financial management techniques.

In a report by the Sydney Morning Herald, Finnigan promised much bigger investments coming in to his hands, which guaranteed a 15 per cent return.

But then all the money he got from middle class investors went to his personal account, paying off his credit card bills, overseas travels, and even interest to earlier investors.

During a sentencing hearing on Friday for Finnigan, Judge Michael Finnane heard victim impact statements from nine investors, many of whom have suffered great losses after entrusting their money to Finnigan. Some victims lost their homes and ruined their marriages, while others are still paying off debts incurred from "investing."

''Many people who are extraordinarily intelligent and well-educated are deceived by such people,'' Judge Finnane said.

One person stood for Finnigan despite the charges against him. Steven Johnson, the managing director of VIP Higher Car Services, gave testimony that Finnigan had been a diligent employee, driving cars and helping with the books, according to Herald. Johnson had worked for Finnigan at Financial Partners Pty Ltd from 2002 to 2003 and had shared rent-free the company apartment with Finnigan at Connaught.

Finnigan will be sentenced on December 16.