Auckland man admits to running $5.4m Ponzi scheme

An Auckland man has admitted running a $5.4 million Ponzi scheme and deceiving friends and associates.

Shane Richard Scott built up trust with some investors across a decade, according to the Serious Fraud Office (SFO).

Some thought he'd been working on overseas investments while others thought they would receive high returns because of property developments and exporting or importing deals.

But Scott was instead running a Ponzi scheme, using money from new investors to pay returns to others, the SFO said today.

"There was no direct evidence of any legitimate investments," the organisation said in a statement.

Despite initially pleading not guilty, Scott today admitted 27 fraud-related charges in the High Court at Auckland.

These included charges for obtaining by deception, theft by a person in a special relationship and using a document with an intent to defraud.

Scott will be sentenced in October.

"Mr Scott built up trust with some investors over a long period of time (over a decade for some), and as a result of Mr Scott's alleged offending, they have lost significant amounts of money. Some of the short term investors received their money back from Mr Scott, but only after extended delays and excuses," the SFO said today.

SFO director Julie Read said: "Mr Scott's admission provides the victims with some closure and the SFO welcomes the opportunity to save public money as the result of the matter not going to trial," she said.

"We do, however, want to reiterate the importance of checking that investment information is legitimate, whether you are investing with friends, associates or strangers.

"A few simple checks could save you money. Those thinking of investing should refer to advice on the SFO, Financial Markets Authority and Commerce Commission websites."