An Auckland businessman already jailed for fraud today pleaded guilty during a separate trial to using investor funds to repay other clients, to try get a $US20 million loan and for his own purposes.
After giving evidence at his trial, 41-year-old Mark James Whelan today pleaded guilty to 10 Crimes Act charges - three of theft by person in a special relationship and seven charges of false statement by promoter.
Whelan's trial began in the Auckland District Court last month.
The Serious Fraud Office, which brought charges against Whelan, said they related to his involvement with options trading company Derivatek New Zealand Limited and his own company, Global Futures Trading.
From mid-2007 until February 2009, Whelan used this company to obtain funds from high net worth individuals to be traded through Derivatek, the SFO said.
Whelan used investors' funds for an advance fee on a US$20 million loan, for personal use and to repay other investors, the SFO said.
In order to conceal this activity, Whelan issued false statements to the investors.
"This investigation uncovered a multi-layered fraud, with the need to fund one fraud driving further offending. Where the return on investment is significantly higher than market rates investors should be aware that they may lose their money, because very high returns generally equal very high risk or, in some cases, fraud," SFO director Julie Read said today.
Derivatek New Zealand's director, Auckland stockbroker Greg Arnott, also pleaded guilty to SFO charges last month for similar offending.
Arnott and Whelan are next due to appear in the Auckland District Court on Thursday.
In May last year, Whelan was sentenced in a seperate case to four years and four months' jail after he pleaded guilty to 66 charges for fraudulently obtaining loans from
Dunedin-based vehicle finance company, Motor Trade Finances. Whelan was a dealer for MTF from 2005 and became a franchisee in January 2008.
Between July 2005 and February 2009, Whelan obtained loans totalling $4.9 million and the funds were used for personal gain, including the purchase of land, servicing of personal debts and investing in a futures trading scheme run by Global Futures Trading.