Conman jailed for Ponzi scheme that ‘ ruined lives’

A white- collar criminal has been jailed after stealing millions of dollars over more than a decade with fictitious gold and diamond sales in Thailand, African trade deals and a chicken farm in New Caledonia.

Shane Richard Scott, 60, was sentenced yesterday in the High Court at Auckland by Justice Christine Gordon for running a $ 5.4 million Ponzi scheme over 13 years.

He will spend four years and eight months behind bars.

A Ponzi scheme i s a fraud that promises high returns for investors, but those returns are paid to longestablished investors through revenue paid by new investors.

Scott faced 27 fraud- related charges.

The charges were initially laid by the Serious Fraud Office ( SFO) in the Auckland District Court in January before he pleaded not guilty in February. But he changed his plea last month in the High Court.

Scott narrowly dodged a jail term in 2015 after defrauding the Auckland District Court with a false affidavit in a bid to gain name suppression.

He was convicted of obstruction of justice and has convictions for obtaining by deception.

In Scott’s Ponzi scheme he used funds from 13 long- term investors to pay returns to each other, but there was no evidence of any legitimate investments, the court heard.

The investors believed Scott was investing their money in brokering deals in Thailand and other assets, including the diamond trade and South African trade deals.

Of the $ 5.4m given to Scott, $ 3.6m was used to repay investors. The total loss eventually reached about $ 2.1m from 2001 and 2014.

Scott’s cons also included claims he was converting gold into US dollars through a deal with the Thai government, and a tyre and heavy machinery exporting deal where he would on- sell products to the Australian mining industry.

He also told one investor he could help them gain half the share of a chicken farm in New Caledonia.

“All these were spurious, fake, false. This was a blatant fraud,” Crown prosecutor Nick Williams said.

“This is a true Ponzi scheme,” he said.

Williams said Scott’s motivation was greed, “pure and simple”.

“[ The Crown] doesn’t accept that this offending was borne of some desperation as Mr Scott claims,” he said.

The court heard that many of the investors, some whom lost hundreds of thousands of dollars, were friends Scott had met at bars and rugby clubs.

“The victims trusted the defendant — he ruined their lives. He’s caused friends to turn on each other,” Williams added.

Justice Gordon said many of the victims have been financially destroyed and will now be forced to work long into their retirement years to make ends meet.

Scott, who suffers from ill health, has said his offending was due to poor business management and financial dealing, as well as desperation.

Scott’s counsel, Adam Holland, added the fraud wasn’t sophisticated and involved short handwritten or t yped documents with claims of “quite fantastical” returns.

He said it wasn’t the case that Scott enjoyed a “lavish lifestyle” as a result of his offending, and the court heard Scott had sold some of his assets in an attempt to pay back his victims.

SFO director Julie Read said when Scott pleaded guilty that his admission gave the victims some closure. The SFO also welcomed the opportunity to save taxpayer money as the result of not going to trial.

“We do, however, want to reiterate the importance of checking that investment information is legitimate, whether you are investing with friends, associates or strangers,” she said.

“A few simple checks could save you money. Those thinking of investing should refer to advice on the SFO, Financial Markets Authority and Commerce Commission websites.”