The man behind New Zealand's largest Ponzi scheme has been sentenced to 10 years and 10 months in jail - a punishment deemed too lenient by one of his victims.
David Ross, Wellington financier and former head of the Ross Asset Management (RAM), was sentenced at the Wellington District Court today by Judge Denys Barry.
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.
His sentencing today follows guilty pleas to a combination of Serious Fraud Office (SFO) and Financial Markets Authority (FMA) charges.
A minimum non-parole sentence of five years and five months was imposed by Judge Barry.
Bruce Tichbon, who lost money with RAM and heads the victim's group Ross Support, said outside court today the assigned jail time was not enough.
"It is not a sufficient disincentive to stop further white collar fraud in this country. We have had a raft of it in the last five or six years, and I confidently predict that we will see more."
SFO director Julie Read said more than 1200 client accounts had been affected by Ross' scheme.
"The financial losses are not only significant to hose individuals but they will have a flow-on effect as those investors' dealings in the New Zealand economy are impacted."
FMA chief executive Sean Hughes said he had the utmost sympathy for investors who had placed their trust in Ross.
"From next year financial advisers who manage a client's portfolio under an investment authority will no longer be able to hold that money or property themselves," he said.
Among Ross' 700 victims were a couple who had given over their life savings in the hope of securing funding for their autistic son's future.
"This was to be the nest egg for the future care of our mentally disabled son," the wife told the court through their victim impact statement.
They were planning to put returns earned from RAM investments towards a home for their son where he could live with others under supervision when they were no longer able to care for him, she said through tears.
"He is entirely dependent on us."
Another of Ross' victims revealed how the ordeal had led to him being suicidal.
The investor said he and his wife invested $1.4 million in the company.
"It was the capital reward from years of hard work and stress."
The pain and anguish had even been too much for the man to draft his victim impact statement, which had to be written by his wife, he told the court.
"I was not up to it, I was suicidal."
Judge Barry said Ross' actions had "blighted the remaining lives of the often elderly and all innocent citizens''.
"Effectively, your hubris has wrought incalculable harm to many hundreds of people."
While he accepted Ross' remorse was genuine - demonstrated in court by the reading of an apology letter from Ross to his investors - any mitigating factors in his sentence had to be tempered against the sheer scale of his offending.
The letter, read by Ross' lawyer Gary Turkington, expressed Ross' regret over his actions.
"I'm so sorry for the losses that you have incurred for my actions."
Judge Barry said even though Ross had no previous convictions, the offending had taken place over at least 12 years and involved an "increasingly complex deceit" focused on maintaining the illusion that he was a skilled and trusted benefactor.
Many of his victims had been elderly, disabled and frail, Judge Barry said.
SFO prosecutor Kristy McDonald, QC, said Ross' offending was "unprecedented in New Zealand".
"No fraud case comes close to it in terms of offending and scale," she said.
Jeanette Buchanan and Bruce Tichbon are among David Ross' 700 victims.
The pair, who have been in contact for about a year, met in person for the first time at the failed financier's sentencing today.
Both attended as representatives of their families, who had invested and lost much of their life savings with Ross Asset Management.
Mr Tichbon said Ross' Ponzi scheme was the last straw.
The 63-year-old father-of-five had already lost money with failed companies Bridgecorp, St Laurence and Strategic Finance.
"I just lost it".
This time, he was determined to see those at the top held to account.
Ross' sentence was merely another step in his mission to bring about about tougher regulatory rules in New Zealand, Mr Tichbon said.
He had prepared himself for a "low" sentence outcome, but the minimum imprisonment period of five years and five months had been disappointing, he said.
"The guy was just so ruthless.
"He would talk to a retired couple, and he would listen to their objectives, what they wanted to do for their children and for their old age. He would listen to these people's stories and respond so compassionately," Mr Tichbon said.
There were countless stories of how reassuring and understanding Ross was towards those who trusted him with their money.
His sentence will not be a big enough deterrent to New Zealand's white collar criminals, Mr Tichbon said.
Mrs Buchanan, who lives in Nelson with her husband, said they had trusted the financier with savings of $620,000.
"He was seemingly really passionate about what he did."
The investment sum was made over a five-year-period and was the couple's retirement fund, the 56-year-old said.
They were also hoping it would earn enough money to help their two daughters, both at university, with their student loans.
"When we first invested with him, he said don't be afraid around Christmas time to ring me up and cash in $20,000, because he said a lot of people do around Christmas time.
"We actually were mid- to long-term investors; it was our superannuation ... so we didn't do that.
"Now, it's all gone," she said.
Mr Tichbon and Mrs Buchanan both believe many people were aware of the Ponzi scheme, but refused to reveal the truth.
"People knew what was going on," Mr Tichbon said.
"When it collapsed, there were 600 who had lost money still in, and 200 who had made money who were still in.
"We believe there was another 500 who drew all their money out in good time."
These 500 people were not covered by the Companies Act.
"They could have had knowledge, drawn all their money out, walked away with everything and they're not even being pursued."
"The system sucks," Mr Tichbon said.
David Ross, sentenced on eight charges
* Serious Fraud Office: four of false accounting, one charge of theft by person in special relationship.
* Financial Markets Authority: one of supplying false information, one of dishonestly obtaining authorisation to act as an authorised financial adviser, one for acting as a broker without authorisation.
Reparations for victims:
* Ross' lawyer Gary Turkington said all Ross' assets would go towards reparations
* This included three properties in his family trust
* This was likely to be "infinitely small'' compared to what investors had lost, with Mr Turkington estimating the value of Ross' assets to be between $1m to $2m.
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 last year 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.