Formal complaints of fraud were made against giant alleged ponzi East Wind five years ago, but authorities failed to formally investigate the apparent scam whose expected losses subsequently ballooned to exceed $45 million.
East Wind, an Auckland-based financial and immigration consultancy targeting Japanese nationals, was revealed by the Herald today to have operated for at least seven years as an alleged ponzi scheme .
Liquidators found more than 200 creditors were owed $45m with only $1m in assets to satisfy them.
The sudden death in February from chronic alcoholism of East Wind founder and chief executive Tom Tanaka, also known as Masatomo Ashikaga, saw the scam unravel as liquidators began piecing together a network of related companies they now call "the labyrinth".
It emerged today that a formal complaint of fraud against East Wind and Tanaka was sent in August 2014 to the Serious Fraud Office by immigration lawyer and former cabinet minister Tuariki Delamere.
Delamere told the Herald an apparent lack of action to stop the scam then meant someone now had to demand answers and "bring the hammer down" on authorities.
The complaint letter, including a detailed timeline and affidavits from two sets of alleged victims, claimed "they are victims of a deliberate fraud with both families having been defrauded of more $200,000 each" and that "they are just [two] of many dozens of victims, possibly numbering in the hundreds over the past 15 years".
In December 2015 a principal investigator for the SFO wrote to one of the victims and said, "we have reported our findings to the director of the SFO and it has been decided the matter will be referred to Immigration NZ".
A spokesperson for Immigration NZ told the Herald they had "looked into the matter at the time, assessed the information but declined to take any further action due to other operational priorities".
A spokesperson for the SFO said they had concluded in 2015 it was "most appropriately dealt with by another agency", but they had recently re-opened the file.
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"We have received more complaints recently which give rise to some different issues, and we are making inquiries into these complaints," the SFO spokesperson said.
Delamere told the Herald that at the time of the complaint he was acting largely pro-bono on behalf of two Japanese couples who had been given bad immigration advice by unlicenced advisers East Wind, and who struggled to recoup hundreds of thousands of dollars purportedly "invested" in companies set up by Tanaka that they were told would assist the granting of visas.
Delamere said he could not understand why his complaint appeared to have been ignored.
"There was a lot of evidence there and it had the smell of a lot more behind it. It seems to me it definitely should have been something that should have been investigated by them," he said.
That East Wind was allowed to keep operating for five years following the complaint, would have seen considerable additional harm done to the community, he said.
"As you found out, it's even worse than I thought. He wouldn't have just stopped with those two families, he'd be running this shit with more. It's very sad it continued like that.
"The inaction of the SFO and Immigration NZ has led to many others being exploited."
The Japanese embassy, whose citizens comprise the vast bulk of alleged victims, said yesterday it was referring complaints to liquidator Grant Thornton but "if the NZ authorities request our support, we are willing to cooperate".