An alleged conman told a multiple sclerosis sufferer that he would be cured if he handed over thousands of dollars in "goodwill'' money to travel to a clinic in Cyprus, a court has been told.

Australian man Philip Oates made his way into the witness box with the help of crutches and told Auckland District Court today how Loizos Michaels spoke of the possibility of a cure.

"He kept telling me that he had a friend in Cyprus, a doctor who was leading research in MS.''

Michaels has denied 31 Serious Fraud Office charges of deception connected to an alleged $3 million fraud.


Mr Oates told the court he had already paid Michaels a total of $131,000 for shares in a film studio on Australia's east Coast he headed in 2004.

He said Michaels asked him to hand over $11,000 to show "goodwill'' to the doctors in Cyprus who would cure him. But Mr Oates was already heavily in debt and was told by his bank that he could only have $8000.

"He was going to fly me to Cyprus, they were going to put me through a clinic ... they were going to cure me.''

At one point, Michaels told Mr Oates to go home and pack his bags because they were leaving for Cyprus in the next couple of days.

"We sat at home for a week and didn't hear anything.''

The trip never happened and despite repeated promises that the doctors were coming to Australia, Mr Oates was left with his debilitating central nervous system disorder and a massive debt.

Mr Oates said he was diagnosed with multiple sclerosis in 2001 and had to sell his business a short time later.

He had invested about $16,000 in a small stunt training facility with friends who later met Michaels.


Mr Oates said Michaels spoke of links to the Japanese organised criminal group the Yakuza and the Melbourne underworld.

Michaels took charge of the business, offered Mr Oates a position as director for $400,000 and promised to pay the company's bills and the rent.

He said the company ended up being evicted from the address but Michaels said he would buy the premises. The deal never went through

There was also a film studio company created called Salt Water Films which was to be listed on the European stock exchange. It was into this scheme that Mr Oates paid $81,000 from the sale of his business and a further $50,000 from his savings.

Mr Oates said Michaels had cheques written out to him to repay the debt but they all bounced.

"He kept saying: 'It's under control, the money is forthcoming, you will receive it shortly'.''

On one occasion he was with Michaels in Cairns when Michaels received three cash payments from another alleged victim.

"He spent the day in the casino and he blew the whole lot.''

Mr Oates is yet to be cross-examined by Michaels' lawyer Peter Kaye.

The trial continues.