An "incompetent" former Tauranga foreign exchange trader will serve four years and three months in jail for inflicting losses of about $1.5 million on investors, including his family and friends, in a failed Ponzi scheme.

Rene Alan Chalmers, 43, appeared for sentence in the Auckland District Court today after earlier admitting 14 charges of theft by a person in a special relationship, dishonestly using a document and making false statements to investors.

The Pukekohe teacher's convictions stem from trading foreign currency and misleading banks when buying three Bay of Plenty properties.

When obtaining loans for these he showed banks accounts from his company, Chalmers Cameron Investments, passing off the balance as his own money, not that of investors.


He also made 519 false statements to 64 investors about his company in which its parlous financial position was not disclosed.

"By August 2011, your false reports claimed investments held of $3.64 million when in fact you held $140,000," Judge Ron Ronayne told Chalmers.

"By March 2012 you'd inflated the claimed investments to $6.2 million, when in fact it held $290,000."

Chalmers initially received money from his family members and friends and then from colleagues and acquaintances, promising a return on the investment. Despite not delivering, he took money for fees to which he was not entitled and even took money his sister deposited in his bank account for her portfolio.

"It's clear to me that you lied to investors when that money was largely gone, and in the last few months you conned for investors to put their savings into your business," the judge said.

The total loss Chalmers caused investors is disputed, but is about $1.5m. Banks were conned out of $1.4m, but as they held securities that was repaid.

Prosecutor Dale La Hood said the operation was never viable and was a Ponzi scheme.

Defence lawyer Paul Mabey, QC, said Chalmers was out of his depth trading foreign currency at night time, while working as a teaching adviser in the United Arab Emirates (UAE).


By his own admission, Chalmers was incompetent at forex trading but when the operation was set up there was no intention to deceive investors, Mr Mabey said.

Chalmers put his own money into the company and on returning to New Zealand in July 2011, bought the three properties to provide a return to his investors.

Mr Mabey said Chalmers rejected assertions made by some who lost money through him that he lived a lavish lifestyle in the UAE.

Judge Ronayne accepted Chalmers, a first offender, was remorseful but said that was countered by his rationalising and minimising his offending. In a letter to the court Chalmers described his "mistakes" and said he thought his venture could be successful.

"That, Mr Chalmers, is impossible to believe," the judge said.

The judge declined to impose a minimum period in jail, meaning Chalmers is eligible for parole after serving a third of his sentence.

His company folded in 2012.