A New Zealand man who ran a supposed foreign exchange investment scheme which turned out to be a Ponzi scheme has admitted to a series of charges.
Kelvin Clive Wood, who is 69 years old, submitted his guilty plea on March 20th during a hearing at Auckland District Court.
He had been accused of a number of offences, including “Theft by person in a special relationship” and “Obtaining by deception”.
Mr Wood, who is from Auckland, had been investigated by the Serious Fraud Office in the country. The case was passed to them when the country’s Financial Conduct Authority sent it on in May of 2017.
Wood used two companies as part of the scam: Forex (NZ) Limited and Forex NZ 2000 Limited.
According to court information, Wood realised that his legitimate investment scheme was starting to incur losses.
As a result, he began to use funds incoming from new investors to provide what looked like returns to others – a common scam known as a “Ponzi scheme”.
The crimes spanned an extended time period too.
The New Zealand Serious Fraud Office claims that Wood managed to lose over $7 million New Zealand dollars in cash put down as investment from 18 separate investors over the course of around eight years.
Senior figures at the Serious Fraud Office said that the organisation would continue to pursue fraudsters in the forex space.
“Mr Wood earned the trust of a group of investors through his personal and professional association with them”, said Julie Read, the Director of the Serious Fraud Office.
“He misappropriated their funds and falsely reported trading profits so they would not seek to withdraw their funds.
“The SFO will prosecute all serious fraud matters brought to our attention to protect other investors and New Zealand’s reputation as a corruption-free market”, she added.
The case against Kelvin Clive Wood has gone on for a long time, and the case has had a number of twists and turns.
As of late last year, Mr Wood was denying the accusations against him – pleading not guilty at a hearing in the same courtroom on December 14th.
However, a report released when Mr Wood’s company went into liquidation back in 2017 indicated that Wood had owned up to some failures.
“The director has admitted wrongdoing with respect to the treatment of investment funds for the period he operated the business as sole director”, the report read.
“We understand that the director is waiting for the relevant authorities to complete their investigations in relation to this wrongdoing”, it added.
Forex fraud is unfortunately not uncommon in New Zealand.
In July of last year, for example, two people who ran a sham forex platform were sentenced over their role in a scam relating to BlackfortFX, or Arena Capital Ltd.
One of them, Lance Jack Ryan, was sent to prison for seven and a half years. The other, Jimmie McNicholl, was given nearly a year in home detention and told to pay a compensation charge of around $50,000 New Zealand dollars.