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Financial Markets Authority Ponzi Scam


  • Financial Markets Authority Duped by Ponzi Scammer

    New Zealand has a horrible history of ponzi schemers.
    In five of the last nine years, ponzi schemers have been banged up in jail as a result of their scams.

    Now a Financial Markets Authority analyst has been charged with forging a glowing academic record to get his job and then stealing nearly $210,000 in a Ponzi-type scheme. Benjamin Anthony Kiro is alleged to have convinced women he met on online dating sites such as Tinder, or businessmen introduced to him by associates, to invest in companies soon to list on the stock exchange.

    The 35-year-old had an impressive CV, which included law and commerce degrees, as well as a master's degree in business administration from a prestigious business school in Australia. But the police allege the funds given to him, ranging from $2000 to $120,000 from each of the six complainants, were never invested.

    Even more embarrassing for the FMA, which is responsible for policing the markets in New Zealand, is the allegation that Kiro forged his qualifications to get the job.

    Court documents show that Kiro, a former professional league player in Sydney, is charged with forging his academic record at the Australian National University and the Macquarie Graduate School of Management to land the job at the authority.

    "Working at the FMA gave him credibility and you would assume they would do some due diligence, some background checks, on the people who work there," said a businessman who "invested" $120,000 with Kiro.
    The Auckland man, who spoke on the condition of anonymity, said the returns on the investments offered by Kiro were "not off the planet; it wasn't too good to be true". He was introduced to Kiro by a trusted friend and the compliance paperwork looked legitimate.

    "Three months later, it became clear the money wasn't coming."
    When queried about the investment, Kiro supplied a Citibank statement showing $247,100 in the account. The police allege the document is false, the reason for one of the 11 theft or forgery charges laid in the Auckland District Court, where he will reappear in November.

    The maximum penalty for using a false document is 10 years in prison. "He's been charged with ripping me off, but you've got to ask, what is going on at the FMA?" said the businessman who eventually laid a complaint with the police. Another man and four women, at least one of whom met Kiro on Tinder, are listed as complainants in the charge sheets.

    One of the women was having dinner in Ponsonby with friends, one of whom also recognised Kiro from his profile on the online dating site. They ended up exchanging phone numbers and seeing each other socially over several months, before he convinced her to invest $2000 through him.

    "He is charming, gregarious, good looking, well spoken, well dressed, clearly intelligent," said the woman. "I thought he was a really nice fellow until the police called me."

    The FMA declined to answer questions about Kiro because, a spokesman said, "we may be called as a witness in the event of a trial". The Weekend Herald understands that Kiro, who was charged last week, left the FMA several months ago. He recently set up a management consultancy called Phoenix Orik.
    Kiro was recommended to the FMA by Frog Recruitment.

    Director Jane Kennelly said the matter was being taken "extremely seriously". "Our recruitment process exceeds industry standards and involves thorough checking and vetting, including identification checking, competency interviews, two verbal references and evidence of qualifications and academic transcripts, which in this instance, had been stamped and verified by a justice of the peace," she said.

    Private investigator Danny Toresen said too many companies relied on the word of a recruitment agency that a prospective employee had been robustly vetted. He was often hired to complete background checks on staff - after they had already been hired - and said employers should independently check the bona fides first. "Or at least ask the recruitment agency to provide confirmation of someone's criminal history, or academic record," said Mr Toresen. "Everything can be checked, you just need to ask the right questions. It's scary how senior some of these people can get."

    Detective Gill Holland, of the Auckland City police fraud squad, said she expected to lay more charges against Kiro and encouraged anyone with any concerns to contact her. The Parnell apartment given as Kiro's address on the court documents and in Companies Office records was last night being professionally cleaned as he had moved out.

    New Zealand's proud history of Ponzi schemes...

    2014: Seventy-nine-year-old Dunedin lawyer John David Milne described in court as "a consummate thief and liar" was jailed for more than eight years after his Ponzi scheme cost investors $2million.

    2013: Our greatest Ponzi schemer, David Ross was jailed for 10 years and 10 months. The court heard that the Wellington fund manager said he was investing people's money in shares, but that was a charade. In all, he overstated returns by well over $300m. Total losses to investors appear to be over $115m. Unwinding the scheme threatens to take years.

    2012: Aucklander Jacqui Bradley was jailed for seven years and five months. The court heard she and her now-dead husband stole from investors while pretending to invest their money. In all $15.5m was lost by investors in the B'On Financial Services business. Investors were told their money was invested with Macquarie Bank, the New Zealand government and in gold futures. It wasn't, and when money needed to be paid out, the Bradleys used other investors' money to do it.

    2009: Hawkes Bay man Warren Pickett was sentenced to five years in prison over the operation of a finance company scheme that morphed, according to the High Court, into a Ponzi scheme. A 2010 judgement from the Napier High Court said: "In time (it is hard to tell when), Warren Pickett began to mine new deposits from depositors to meet interest commitments in respect of existing deposits, rather than making the loans or investments that he represented to depositors he would be making with their money." More than 200 investors lost a combined $3.77m. Most lived in the small township of Waipawa. A trusted figure in the community, Pickett was a justice of the peace and a marriage celebrant.

    2006: Margarite and Bill Papple, and Tina Marie West from Rotorua were found to have defrauded investorsof at least $8.3m of the $14.6m in 2000 and 2001. "The appellants' method of soliciting funds from investors was to offer high returns, ranging from an effective interest rate of 3 per cent per month up to 10 per cent per month and sometimes even higher," the Court of Appeal found. West and Margarite Papple were sentenced to five years in jail. Bill Papple, who was found to have acted out of "a sense of misguided loyalty to his wife", received a lesser sentence.

    Credit; NZ Herald
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