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Home / Business / Companies / Banking and finance

Liquidators eye Ponzi investors

NZ Herald
26 Jan, 2015 04:00 PM3 mins to read

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Jacqui Bradley's clients were told their money was securely invested with a Macquarie Bank fund in Australia. Photo / Brett Phibbs

Jacqui Bradley's clients were told their money was securely invested with a Macquarie Bank fund in Australia. Photo / Brett Phibbs

Backers who were paid out before scheme folded could face attempt to claw back $2m.

The liquidators of fraudster Jacqui Bradley's failed business are mulling whether to try to claw back $2 million from eight investors who were paid out before her Ponzi scheme folded.

Bradley was sentenced to seven years and five months' jail in 2012 for her prolonged and premeditated defrauding of clients of B'On Financial Services, which she ran with her now-deceased husband, Mike.

The former financial adviser, in her mid-60s, swindled 28 investors out of about $15.5 million and was found guilty of 75 fraud-related charges.

Bradley's clients 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.

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But these investments didn't exist. Instead, client money was in a Ponzi-like scheme, being used by the Bradleys to repay other B'On investors and fund the couple's lifestyle.

It was spent on school fees, clothes shopping, payments on a BMW and the mortgage on a Remuera home valued at $4.7 million in 2008.

B'On shut its doors in December 2009 and more than five years later liquidators are considering trying to claw back funds from investors paid out two years before the collapse.

"We have written to eight investors who received payments in [the] two-year period prior to liquidation," liquidator Brian Mayo-Smith said in a report released last week. "The total amount of the payments detailed in these letters is $2.04 million. At the date of this report, we continue to assess the responses received and are taking legal advice on the merits of pursing any claims further."

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Mayo-Smith said he was watching with interest the claw-back test case involving Ross Asset Management, but would not necessarily wait for its conclusion if starting his own action.

Wellington-based RAM cost investors about $115 million when it collapsed in November 2012.

Investors are likely to get only a fraction of this money back.

Its director, David Ross, ran the country's largest Ponzi scheme and was sentenced to 10 years and 10 months' jail in 2013.

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The firm's liquidators, John Fisk and David Bridgman, have taken High Court action against three investors who got payouts before the collapse.

The first of these test cases, where $3.8 million is at stake, is due to be heard in Wellington this March.

While several of Ross' victims welcome the claw-back, one burned Bradley investor was against B'On's liquidators taking similar action.

The investor, who did not want to be named, lost hundreds of thousands of dollars with the Bradleys and was concerned money could have been funnelled overseas. He said the liquidators should focus on recovering funds such as those instead of money from investors.

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