Ross was confronted by staff
A FORMER staff member of Ross Asset Management raised concerns with convicted fraudster David Ross seven months before the ponzi scheme collapsed.
Helena Lintern, who worked at Wellington-based RMA, appeared in the High Court at Wellington yesterday as a witness in Duncan Priest’s case against liquidators of the failed company.
Priest, a former stock broker, is attempting to force the liquidators to release shares which are worth about $1.8 million.
During his cross-examination, Bell Gully partner Mike Colson, representing the liquidators, asked Lintern, who started working for Ross in 2006, questions about how Ross conducted his business and if she had noticed irregularities.
When Colson asked Lintern if in hindsight she could see there was a ponzi scheme operating, she responded: ‘‘Yes, I see that now.’’
He put to her that in early 2012 she could see all was not well with the company. She responded: ‘‘All was not well with David Ross.’’
Colson referred to an email she had sent to Ross in March 2012 that indicated concern on her part, he said.
David Ross was jailed after pleading guilty to fraud.
In the email to Ross, Lintern noted that clients were making enquiries asking about money and alleging it was not there any more, he said.
She told the court such inquiries from clients were ‘‘very regular, in fact they became the norm’’.
When questioned about specific transactions on a RAM investor database she told the court she could not remember what happened.
Ross Asset Management was raided by the Financial Markets Authority on October 31, 2012 and two days later the regulator was granted a High Court order freezing the company’s assets.
It turned out to be a ponzi scheme, believed to be the largest in New Zealand’s history. While investors were told they were making strong returns through good investment, in fact when they were withdrawing money it was covered by deposits by new investors, with little share trading taking place in the later years.
On Tuesday another former employee, Melissa Bunt, also gave evidence in the case, explaining what happened when a client asked to withdraw money.
‘‘People would put their request in and then we’d present it to David [Ross] and say, ‘this person wants this amount of money’, and then he would theoretically make a sale and the money would be in the bank account . . . [but] chances are it was someone else’s money.’’
The case is the first time anyone from inside the company has spoken publicly since the collapse.
Both Bunt and Lintern refused to speak to the media after their appearance, and were ushered out of court by members of Priest’s legal team.
Most of the questions the pair faced were about the way they handled Priest as a client.
Priest claims that he used Ross as a share trading service, with employees acting at his direction, which means he had quite a different arrangement to other Ross investors, who allowed the company to manage their money for them.
When the company collapsed, around 1700 investors who had deposited $115m believed it was managing close to $450m on their behalf.
Liquidators discovered the returns were a fiction and the company had only around $10m in assets when its problems came to light.
David Ross was jailed for 10 years and 10 months after pleading guilty to fraud.