Business Insider: US regulator moves to get wanted man from Tonga

United States authorities are trying to snatch a former Auckland resident whose New Zealand companies were allegedly part of an $8 million Ponzi scheme.

Christopher Pedras, also known as Antone Thomas Pedras, came to the attention of the local business community in 2013, when the Financial Markets Authority cancelled a prospectus issued by his firm FMP Medical Services, which claimed the company would use investor money to set up dialysis clinics.

It was the first time the FMA had cancelled an offer document, which said that Pedras - an American who was living in Orewa - had a diverse business background that included him running a Hawaiian nightclub chain and developing a network of 368 ATMs.

A month after the FMA scrapped the prospectus, US authorities named Pedras, FMP, another New Zealand company and American firms in a complaint about an alleged Ponzi scheme peddling sham investment opportunities.

The US Securities and Exchange Commission alleged Pedras misled his initial investors into believing they were investing in a profitable trading platform in which his company served as an intermediary between global banks.

When Pedras and his companies encountered difficulty paying the promised 4 to 8 per cent monthly returns, they began steering investors to a different investment programme to purportedly increase the value of their investment by 80 per cent, through funding kidney dialysis clinics in New Zealand, the SEC alleged.

However, the SEC alleged that neither of the investment programmes was real.

"Instead the programmes are a Ponzi scheme," the SEC said in its 2013 complaint.

Of the US$5.6 million raised, Pedras and other defendants paid out US$2.4 million to other investors as purported "returns", the agency claimed.

"Defendant Pedras has misappropriated nearly US$2 million in cash, cars, retail purchases, and transfers to and from his relation companies," the SEC alleged.

Default judgment was entered against Pedras in 2014 by a Californian court for US$3.2 million, representing profits gained from offering securities.

That judgment also revealed that the SEC had frozen 14 New Zealand bank accounts linked to Pedras or companies associated with him.

Island time

Pedras appears to have been living in Tonga for the past few years and in 2014 won an appeal against deportation from the island nation.

Business Insider can now reveal that the SEC's enforcement division is trying to extradite Pedras.

A minute from the SEC, issued this month, said an extradition hearing took place in Tonga on March 29. The decision has yet to be released.

Even if an extradition order is made, the SEC notes that Pedras may not immediately be packing his bags for his native turf and may well appeal any such decision.

Flight delay

Qantas boss Alan Joyce this week had some fun at the expense of Air New Zealand chairman Tony Carter, while speaking at an Institute of Directors event.

When a question from the floor asked about the competition between the respective national carriers, Joyce described the airlines as fierce rivals who still had a lot of respect for each other.

However, Joyce also reminded the audience he had to be careful - given that the last time he praised Air New Zealand, they ran a full-page advert in the Sydney Morning Herald thanking him for his "kind words".

The ad also claimed that Air New Zealand had signed Joyce to its frequent flyer programme.

"Tony, I'm a little disappointed, 'cos my membership card never arrived," Joyce is understood to have told the room.

Marathon ending

The marathon fraud trial of failed Crafar Farms bidder May Wang is drawing to a close, with verdicts expected in a fortnight.

Business Insider - and anyone else interested - has been unable to follow the cut-and-thrust of the six-month case as reports from inside the Hong Kong courtroom are strictly prohibited.

Likewise, when an entourage of lawyers took a jaunt to Auckland for evidence to be taken before a High Court judge, media were banned from divulging the details.

Despite the information blackout, Business Insider has learnt that the end appears in sight, in a trial that has stretched on since October.

The verdicts and any subsequent sentencing (if verdicts come back guilty) are likely to be the last time New Zealand hears of Wang, best known in this country as the failed purchaser of 22 North Island dairy farms, known as the Crafar Farms.

The events leading up to that failed purchase form the case against Wang.

With co-accused Keen Chen and Wenjye Yee, she faces charges of conspiracy to defraud, laid by Hong Kong's Independent Commission Against Corruption (ICAC).

According to prosecutors, Wang and Chen allegedly induced Hong Kong-listed firm Natural Dairy to acquire the Crafar Farms from one of her companies.

This company, according to prosecutors, did not own the farms but would purchase them with Natural Dairy's money in the name of another of Wang's firms, UBNZ Assets Holdings.

Natural Dairy would, in turn, own UBNZ Assets Holdings and therefore the dairy farms.

Although the Crafar Farms were allegedly on the brink of bankruptcy, Wang and Yee are accused of falsifying their accounts so they appeared to be in substantial profit.

The trio are also accused of failing to declare that Chen and Wang had an agreement to share the commission arising from the sale and purchase of the Crafar Farms.

Unaware of this relationship, and ignorant of the true state of the farms' finances, prosecutors say Natural Dairy approved the acquisition and in 2010 raised HK$955 million ($186 million) to finance the purchase.