$5m ponzi fraud­ster sen­tenced

The Southland Times - - BUSINESS - TOMMY LIV­INGSTON

A man who de­frauded his friends to the sum of $5.4 mil­lion by con­vinc­ing them to pour money into bo­gus over­seas in­vest­ments has been im­pris­oned.

Shane Scott, 60, used prom­ises of high re­turns for non-ex­is­tent prop­erty de­vel­op­ments and over­seas in­vest­ments to de­ceive 13 peo­ple he knew over a pe­riod of 13 years.

He was sen­tenced to four years and eight months’ im­pris­on­ment at the High Court in Auck­land yes­ter­day by Jus­tice Chris­tine Gor­don.

Some of the phony in­vest­ments he of­fered were deals in Thai­land, di­a­mond trad­ing, South African trade deals, a chicken farm in New Cale­do­nia, and im­port­ing mer­chan­dise for $2 shops.

‘‘There were no in­vest­ments; this was bla­tant fraud,’’ Crown pros­e­cu­tor Nick Wil­liams said.

‘‘The mo­ti­va­tions, the SFO [Se­ri­ous Fraud Of­fice] says, is greed, pure and sim­ple. It does not ac­cept Mr Scott’s ex­pla­na­tion this was born out of desperation.’’

Scott’s of­fend­ing was a classic ponzi scheme, which had caused mas­sive fi­nan­cial and emo­tional harm to his vic­tims, Wil­liams said.

‘‘This was not money ob­tained from strangers; it was from friends and as­so­ci­ates … It was a com­plete and ut­ter fabri­ca­tion. There was no money in­vested at all,’’ Wil­liams said.

Due to the na­ture of the ponzi scheme, not all of Scott’s vic­tims lost money. The court heard some were paid back, but $2.1m was still out­stand­ing.

Scott’s lawyer, Adam Hol­land, told the court his client’s of­fend­ing was not so­phis­ti­cated.

‘‘He un­der­stands a cus­to­dial sen­tence is the only out­come avail­able to the court to­day,’’ he said.

‘‘He is fully aware of the vic­tims in court to­day and fully ac­knowl­edges the harm he has caused to those in­di­vid­u­als.’’

Hol­land said Scott was in poor health, which had been ex­ac­er­bated by the court process.

Jus­tice Gor­don told Scott his of­fend­ing caused much pain to his vic­tims. ‘‘Some have lost their retirement sav­ings and now strug­gle to make ends meet. You abused the trust of friends and as­so­ci­ates over 13 years.’’

She noted Scott had at­tempted to pay some vic­tims back by sell­ing as­sets.

Scott first ap­peared in the Auck­land District Court in Jan­uary and ini­tially en­tered a plea of not guilty.

At the High Court last month he pleaded guilty to 27 charges. Th­ese were 20 charges of theft by a per­son in a spe­cial re­la­tion­ship, four charges of ob­tain­ing by de­cep­tion, two charges of ob­tain­ing by false pre­tence and one charge of us­ing a doc­u­ment with in­tent to de­fraud.

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