An Auckland bullion trader has been placed in liquidation, and investors with a total of at least $3 million outstanding are warned to "expect the worst".

The Serious Fraud Office said yesterday it had launched a formal probe of Grace Holdings NZ Ltd, which ran the Bullion Buyer website. The website advertised heavily on television and radio and called itself "New Zealand's most trusted name in bullion trading".

But last week, Bullion Buyer told a Christchurch family they would not be getting back $340,000 they had invested with the company. Since then, the SFO has received numerous complaints about the company and on Monday seized financial documents from its Auckland City offices.

SFO general manager of financial markets and corporate fraud Simon McArley said yesterday that he believed about 50 people had a total of about $3 million with the bullion investment company.


"We can't tell you how much the loss will be because it may not be anything or it could be the whole lot or something in between. Obviously that's the amount people have got invested but we don't at this stage know where that's gone or what might have happened to it."

West Auckland man Paul Baker said yesterday he would lose his income if he could not get his money back from Bullion Buyer.

The 61-year-old said his family had about $175,000 invested with the company, but "luckily" was able to get some money out late last year.

"We're semi-retired and we were planning on not really doing a lot - this was our income. So our income has stopped ... 61-year-olds aren't really employable."

For other members of his family with money in Bullion Buyer, he said any losses would disrupt their plans to buy a house.

Mr Baker said he started to have problems with Bullion Buyer in November last year and from December was unable to access his online account to check the performance of his investment.

Liquidator Grant Reynolds, who was appointed on Monday, said investors should "expect the worst".

Mr Reynolds said he did not know the exact state of Grace Holdings' accounts because the SFO had taken most of the company's documents.


Bullion Buyer is blaming its failure on a former employee, Florida-based preacher Gus Elijah Geldman.

"Mr Geldman is in custody in the United States of America," a statement on the Bullion Buyer website said.

In September, Geldman resigned from Bullion Buyer after a Herald investigation revealed he had been charged with fraud by United States federal authorities. At the time of the resignation, a Bullion Buyer director, Simon Bratley, said clients' investments were safe.

Mr Bratley resigned as a director on January 27, according to Companies Office records, and has not returned phone calls for the past week. Grace Holdings NZ's sole director, Robert Kairua, has also not returned calls.

Paul Baker is looking to get in touch with other investors. Please email: