Hamish Fletcher

Business reporter for the NZ Herald

David Ross loses appeal over sentence

David Ross was jailed for 10 years and 10 months for running a Ponzi scheme in which his investors lost $115 million when his business collapsed. Photo / Mark Mitchell
David Ross was jailed for 10 years and 10 months for running a Ponzi scheme in which his investors lost $115 million when his business collapsed. Photo / Mark Mitchell

Jailed fraudster David Ross must serve at least 5 years 5 months in prison after he lost an appeal against his minimum non-parole term today.

Ross, Wellington financier and former head of the Ross Asset Management (RAM), was sentenced at the Wellington District Court last year to 10 years 10 months' jail.

The 63-year-old's elaborate fraud, spanning 12 years, cost hundreds of investors their life savings and retirement funds.

In total, $115.5 million of investments is estimated to have been lost in the group, which folded last November. Prior to its collapse, Ross had led investors to believe they had $351.5m in client portfolios.

A minimum non-parole sentence of five years and five months was imposed by the sentencing judge.

Ross earlier this month appealed against that minimum non-parole sentence in Wellington and his lawyer argued that it should go down to 4 years.

But Justices Christine French, Jillian Mallon and Geoffrey Venning have dismissed that appeal today, a spokeswoman for the Serious Fraud Office said.

The Financial Markets Authority and SFO - who took the case against Ross - said they welcomed the decision:

"We believe that the decision to uphold the original sentence reflects the seriousness of Mr Ross's criminal offending and the significant harm that his behaviour has caused to investors," they said in a statement.

When the appeal took place, a spokesman for Ross Asset Management Investors Group, Bruce Tichbon, said he had received emails expressing anger that victims could not counter appeal for a longer sentence.

The investor group have received messages from those angry at Ross' lawyer "having the cheek to appeal".

There was frustration that "Ross in many ways seems to get better treatment than his victims."

"Cruelly the victims cannot be a party to this appeal," Tichbon said earlier this month.
Ross' original sentence was the longest given out in a Serious Fraud Office case.

How it stacks up - recent white collar criminal sentences:


Michael Swann - 9 years, 6 months

Michael Swann was sentenced to nine years six' months jail in 2009 for his part in defrauding the Otago District Health Board of $16.9 million. He spent almost $11.6 million on boats, flash cars and properties - buying some with suitcases of cash. A former employee of the health board, Swann was released on parole earlier this year after serving four years and eight months of his sentence. As at July, police had recovered about $3.6 million from Swann, mostly through the sale of assets seized under the Proceeds of Crime Act. Millions of dollars more remain unaccounted for.

Neal Nicholls - 8 years, 6 months and Wayne Douglas - 8 years, 2 months

The founders and beneficial owners of failed finance company Capital + Merchant, Neal Nicholls and Wayne Douglas are serving sentences of over 8 years in jail each. This followed a Serious Fraud Office trial where the men were found guilty of theft by a person in a special relationship for a series of loans totalling almost $20 million.

The pair loaned investor money for their own benefit in ways that breached Capital + Merchant's trust deed. In sentencing them, Justice Edwin Wylie said the directors' actions were cynical. "The offending was sophisticated," he said. "Each of the offenders was driven by self-interest and greed."

The men both got 7 and a half years in jail and had their sentences extended to after pleading guilty to Financial Markets Authority charges. C+M collapsed in November 2007 owing $167 million to 7500 investors. They are likely to see none of their money back.

Gavin Bennett - 8 years

This Christchurch businessman was behind a $103 million fraud that funded his "lavish and "grandiose" lifestyle. Gavin Bennett was sentenced to 8 years' jail last year after pleading guilty to a running a Ponzi-style scheme which swindled South Canterbury Finance for at least $23 million. He is the former owner of IT firm DataSouth and pocketed millions from the six year scam, at times partying with models and drinking "Dom Peringnon like it was Speights". Judge Jane Farish when sentencing Bennett said it was "an unprecedented level of fraud in our criminal history".

Jacqui Bradley - 7 years, 5 months

Jacqui Bradley swindled 28 investors out of around $15.5 million through her business, B'On Financial Services Ltd, which she ran with her now-deceased husband. In 2012 she was sentenced to seven years and five months' jail for her prolonged and premeditated defrauding of clients. Bradley's clients - who handed over millions of dollars - were told their money was securely invested with a Macquarie Bank fund in Australia, or had been used to buy New Zealand Government stock and gold futures. Instead, client money was in a "classic Ponzi scheme" being used by the Bradleys to repay other B'On investors and fund the couple's lifestyle. Investors' money was spent on school fees, clothes shopping, payments on a BMW and the mortgage on a Remuera home that was valued at $4.7 million in 2008, the Auckland District Court heard during her trial.

Rod Petricevic - 6 years, 10 months

One of the most vilified faces following the wave of finance company collapses around the global financial crisis, former Bridgecorp director Rod Petricevic is presently serving a sentence of six years, 10 months in jail for misleading investors and fraud charges. He was sentenced following two separate cases from the Serious Fraud Office and Financial Markets Authority Bridgecorp collapsed in July 2007 owing 14,500 people about $490 million.

Stephen Versalko - 6 years

A former investment adviser at ASB Bank, Stephen Versalko stole $17.8 million from its customers over nine years before being discovered and jailed. Versalko spent most of the stolen funds on multimillion-dollar homes and a lavish lifestyle, this included paying at least $3.4 million to two prostitutes and showering them with $800,000 of gifts. He was sentenced to six years in jail in 2010.

- NZ Herald

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