Liquidator looks to recover ponzi ‘profits’

A liquidator has reviewed more than

100,000 transactions connected to disgraced Dunedin financial adviser Barry Kloogh.

The 57-year-old pleaded guilty in March to 11 representative charges concerning his involvement with a ponzi scheme.

The liquidator’s six-monthly report into Kloogh’s former companies – Financial Planning Ltd and Impact Enterprises Ltd – has given an insight into his offending.

Kloogh, who was declared bankrupt on November 18 last year, lost $15 million of his clients’ money.

As part of his offending, he would change the trading name of his bank accounts to make it appear they were owned by another entity.

The liquidator reviewed more than

100,000 transactions, plus bank transactions for Kloogh’s companies accounts, going back to 2012.

They found ‘‘a small number’’ of clients were not affected by Kloogh’s fraud. Their names had been provided to investigators by Kloogh, and their accounts were released to them once the information was confirmed as being correct.

However, the much larger task of reviewing transactions involving defrauded clients remains. That was because funds paid by cheque had been diverted, or given false bank account details.

Investigators were trying to find instances where stolen funds from Impact Enterprises Ltd were used to purchase other assets in another client’s name.

The liquidator noted any ‘‘fictitious profits’’ – not the underlying capital investment – were liable to be clawed back for the benefit of other investors.

‘‘Therefore, the liquidator will review whether clawbacks of fictitious profits are available from investors who have received some or all of their money,’’ the report notes.

The report also notes Kloogh’s clients were not given access to a platform designed to provide an overview of their investments.

It appeared Kloogh used the platform to keep track of ‘‘what he had stolen from his clients in order to evade detection’’.

After Kloogh’s guilty plea in March, Serious Fraud Office (SFO) director Julie Read said Kloogh ‘‘exploited the trust and goodwill of his clients to misappropriate a significant amount of money from them’’.

‘‘Many victims lost their retirement savings and are not in a position to recover financially,’’ she said.

Kloogh, who was the sole director and shareholder of his various companies, had about 2000 active clients in May 2019.

While his investors have interim name suppression, some told The Press outside of court about the impact of the offending.

One man and his partner had lost a ‘‘six-figure amount’’, a ‘‘big chunk’’ of their retirement nest egg. The man said he now had to postpone his retirement.

Kloogh will be sentenced on July 31.