National Party president and rich-lister Peter Goodfellow lent his friend more than $100,000 to invest with an alleged conman but knew something was up when he saw the state of the conman's shoes, a court has been told.

Mr Goodfellow gave evidence at Auckland District Court today where Loizos Michaels is on trial accused of 31 Serious Fraud Office charges relating to $3 million of alleged deception offences.

Mr Goodfellow, who chairs New Zealand's largest publicly owned fishing company Sanford, told the court he lent his friend of 30 years Stephen Lyttelton a total of $116,000 in two payments.

"He said the people he was involved with, Michaels in particular, were keen for him to show good faith and be involved in activities and he wanted to borrow some money for him to do that," he told the court.


Mr Goodfellow said he agreed to lend the money to Mr Lyttelton, the former chief executive of Christchurch Casino, but on the second occasion he quizzed his friend of 30 years over the arrangement.

"He was convinced it was legitimate."

Mr Goodfellow said that some days later he was invited to lunch at the upmarket Viaduct restaurant Euro with Mr Lyttelton and Michaels.

He told the court Michaels claimed to be working for the high-powered Ho family in Macau who owned casinos.

Michaels also talked of his own family, who he said had a contract to supply textiles to an Italian company for the next 50 years.

Mr Goodfellow - who also chairs the Cambridge Clothing Company - confirmed to Crown prosecutor Christine Gordon that anyone could have discovered his business interests by searching on the internet but didn't know if Michaels had done so.

"I knew there were no 50-year contracts in the Italian textile industry. There is simply no way anyone would have that ... It made me feel very suspicious that he didn't know what he was talking about."

He said Michaels also told him that the Ho family wanted to appoint him as a director of the company.

"I felt that was incredulous. There was no way that a company of that size and substance, with the resources they had, that they would want a New Zealand businessman as a director of their company."

Mr Goodfellow said Michaels did not come across as the person he said he was.

"I noticed his clothes were not particularly sharp and his shoes were scruffy, and this was a man who said he had connections with one of the most wealthier families in Asia ... It just didn't add up."

Mr Goodfellow said he and Mr Lyttelton talked about Michaels as they walked back to his Queen St office after the Viaduct lunch.

"I said in my view, [Mr Lyttelton] should not lend Michaels any more money and should try and get his money back ... He wasn't in the same space as I was. He still believed in his investments," he told the court.

"The lunch was confirmation for me that this was not someone I would lend money to or invest money with."

Under cross-examination from Michaels' lawyer Peter Kaye, Mr Goodfellow confirmed that his friend wouldn't listen.

He confirmed that Mr Lyttelton was convincing when he insisted that he needed to borrow cash to invest in his employer's enterprises.

"Perhaps Michaels had schooled him to be reassuring," Mr Goodfellow said.

The trial continues.

Victim accused of laundering

Earlier today, a woman who says she lost more than $350,000 to the alleged conman was accused of money laundering while giving evidence.

Janet Jackson told the trial that the accused persuaded her to buy 12 apartments at the Sacred Water complex she co-owned in Taupo.

She was to buy them from her co-owners then sell them to Michaels in 2008.

Mrs Jackson told the court that Michaels said his money was in a Belgian bank account and his backers needed some security. He convinced her to make seven payments worth more than $350,000 to ensure the sale went ahead.

Mrs Jackson said she told Michaels the requests for money were "getting ridiculous'' but Michaels said the deal was almost closed and would be cancelled if she did not pay.

Under cross-examination from Michaels' lawyer Peter Kaye, Ms Jackson was asked a series of questions about the amounts she transferred to a home improvement business account connected to Michaels.

"It was part of a scheme to launder cash? And get money at the other end, then to say that the money was spent on renovations?'' Mr Kaye asked.

That was "totally wrong'', Mrs Jackson said.

"It is a lie. You're bloody still at it, aren't you,'' she said, referring to Michaels.

At one point, Judge Christopher Field had to stop Mrs Jackson's evidence and remind her that all the lawyers in the room, including Mr Kaye, had a job to do.

Mrs Jackson told Mr Kaye she was an honest person who had been conned.

"I object to you suggesting that. He's conning you now,'' she said, referring to Michaels.

She said the constant requests by Michaels for money made her feel sick.

"I felt I was in deep.''