Share Investor: Serious Fraud Office set to Make "Ponzi" Arrests

There is going to be an arrest today based on evidence obtained by The Serious Fraud Office (SFO) of an individual involved in a "ponzi" type money go round scheme where 10s of millions of dollars have gone south.

There is conjecture though as to who the individual might be. There are a number of SFO investigations currently active as listed on their website. Those involved with investor money, and with more than $20m of losses are as follows:

Aorangi Securities
B'On Financial Services
Bridgecorp
Capital+Merchant Finance
Dominion Finance
Five Star
Hanover Finance
Kiwi Finance
Nathan Finance
National Finance
South Canterbury Finance
WSD Global Markets

All the above have been involved in dodgy shell games with other peoples money so it is anyone's guess just who it might be.

In my opinion the most likely contenders are Hanover Finance, Aorangi Securities and South Canterbury Finance.

The last two entities are just two of Allan Hubbard's failed financial vehicles and have been under investigation for a number of months by the SFO and other financial oversight bodies but the investigation is unlikely to be finished yet due to the complications surrounding bookkeeping issues, the sum of money involved and the complex interrelation of insider companies lending money to each other.

There has been some indication though from evidence thus far disclosed that there has been some sort of "ponzi" like money go round, with fake investments, forged documents and lack of full disclosure or any disclosure at all with the bulk of investments made during the last two years or so.

To me though the most likely contender for manacles today will be either Mark Hotchin or Eric Watson from the failed Hanover Finance group.

In the dying days of Hanover many millions were transferred from the company to the personal accounts of the aforementioned and for many more years before that the company operated on a knife edge cashflow wise as dividends were stripped and short term money was invested in long term assets - as most finance companies did.

Hanover has been under the shadow of the SFO for most of 2010 and only a few weeks ago pressure was put on directors as they faced some "serious questions" from an SFO ready to finally grab one of the more high profile individuals from New Zealand finance company failures over the three or four years.

From the list of Finance companies above there are already a number of individuals as directors facing court time in 2011 and some have already been charged with other financial misdemeanors and worse and have either walked or faced a slap on the hand with the proverbial bus ticket.

Hanover is the most high profile finance company failure bar the Allan Hubbard Saga and Hotchin and Watson certainly do not have the support that Hubbard has had and would be a feather in the SFO cap as they seemed to have reached a frenzy of activity over the latter part of 2010 after being relatively quiet over the last 4 years on finance company failures.

The scalp of either Watson of Hotchin would be a major public relations coup for them and for that reason, along with their clear hide and seek nature with investors funds of their former business, I will take a punt and pick them for court time in 2011.

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Hanover Saga

Hanover, Allied Farmers deal more of the same
Hanover's "White Knights" are really daylight robbers
Hanover collapse: It was just a matter of time

Allied Farmers Saga

Allied Farmers: Rights Issue Decision
Allied Farmers: Prosecutions should be on the cards
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Allied Farmers: What's it Worth?
Hanover, Allied Farmers deal more of the same

Allan Hubbard Saga

Full SFO Statement on SCF Fraud Investigation

c Share Investor 2010

4 comments:

AnonymousDecember 9, 2010 at 10:56 AM
My bet is on the Bradleys followed by Ed Hartman.
AnonymousDecember 9, 2010 at 10:59 AM
Read Ed Harman
Share InvestorDecember 9, 2010 at 12:27 PM
You might well be right Anon.

The NBR reckons it is somebody we have not heard of too (except for you:))

http://www.nbr.co.nz/article/sfo-make-arrest-tomorrow-case-involves-tens-millions-134406
Share InvestorDecember 9, 2010 at 11:24 PM
So it was John & Jacqueline Bradley in one case:

http://www.nbr.co.nz/article/auckland-couple-charged-over-alleged-ponzi-scheme-134501

Plus two Capital & Merchant directors:

http://www.nbr.co.nz/article/sfo-arrests-charges-capital-merchant-finance-directors-145m-case-134508

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Thursday, December 9, 2010

Serious Fraud Office set to Make "Ponzi" Arrests

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