The NSW Supreme Court has begun hearing a criminal case against Rural & General Insurance Brokers founder and MD Charles Pratten, who faces seven charges of obtaining a financial advantage by deception.

In March last year prosecutors accused Mr Pratten of misappropriating funds between 2003 and 2009 by sending millions of dollars to Vanuatu from his Sydney-based brokerage.

They say the funds were disguised as payments to a Vanuatu insurance company and that Mr Pratten then transferred $5 million for use as undeclared income.

Mr Pratten has denied having an overseas income or a company outside Australia.

In a statement to insuranceNEWS.com.au shortly after being charged last year, he said the decision to prosecute him was “unprincipled, wrong and unfair under the circumstances”.

He said the charges were “based on legal deficiencies and factual mistakes in the Commonwealth’s case”.

The trial continues this week.