Friday 23rd March 2018
|Text too small?|
Christchurch businessman Paul Hibbs has been sentenced to eight years in jail for defrauding clients of at least $17.5 million through a Ponzi scheme.
The sentence, handed down in the Christchurch District Court, includes a minimum non-parole period of four years. Hibbs had pleaded guilty to charges under the Crimes Act including false statements by a promoter, theft by a person in a special relationship, using forged documents and forgery.
The Serious Fraud Office said in a statement that Hibbs owned and operated Cameron Gladstone Investments and Hansa, and through these two companies "he provided clients with false investment reports and used their funds for unauthorised activities, which included using the proceeds from sales of clients’ investments to pay other investors."
The white-collar crime investigator also said Hibbs used client money "for business expenses, including paying dividends, and for personal purposes."
"The sentence imposed today reflects the very serious nature of the offending," said SFO director Julie Read. Hibbs "deceived his clients in a number of ways resulting in significant monetary losses."
Cameron Gladstone Investments was put into liquidation in May last year while liquidators were appointed to Hansa in November 2016. The first liquidators' reports for both companies, from Waterstone Insolvency's Damien Grant and Steven Khov, described the businesses as "Financial Investment/Ponzi scheme".
When Hibbs appeared in court in June last year, the SFO said his legitimate businesses developed into a Ponzi scheme – where new money is used to pay existing investors – in 2008, and that he gave false investment reports to clients and used investors’ funds for purposes other than required, such as paying other investors.
The SFO's statement today gave background to its investigation, saying Hibbs was "employed for a number of years as a private banker, dealing with high net worth individuals, buying and selling shares and managing clients’ investment portfolios."
The SFO said Hibbs left banking in 2002 and incorporated the investment advisory businesses, Cameron Gladstone Investments, and later, Hansa.
"Hibbs solicited some of his old banking clients who brought with them their existing portfolios and investments," it said. "Mr Hibbs was not a registered financial services provider."
No comments yet
MARKET CLOSE: NZ shares fall as investor uncertainty weighs on exporters; F&P Health, A2 drop
NZ dollar drops below US68c on plan to up bank capital
Noel Leeming fined $200,000 for misleading consumers
Big four banks face stiffer capital requirements from RBNZ
Infratil signals A$50m investment in Canberra Data Centres
Govt provides $2.5 mln to develop Opotiki aquaculture
Labour co-ordinator role may alleviate kiwifruit labour shortage
NZ manufacturing activity chugs along in November
Australia's GWA lobs in $118M bid for Methven
Govt leaves door open for higher emissions price cap