Several well-known Auckland businessmen have been identified as having invested in a money-making scheme that has been the subject of a fraud hearing in the Rotorua District Court this week.
Two of the businessmen have succeeded in getting their names suppressed to save them from embarrassment.
But Auckland businessman Lloyd Johns is among those called to give depositions and another, Paul Hyslop, has also been named as an investor.
The court is taking depositions in respect of a joint charge of conspiracy to commit fraud brought against Bill Papple, 67, Lee Papple, 49, also known as Marguerite Huia Papple, both from Rotorua and Tina West, 44, from Dunedin.
The Papples are also jointly charged with failing to supply the Serious Fraud Office with information.
One prominent company director told the court he did not want the public to know he was "conned" for more than half-a-million dollars.
The man, who has been granted name suppression by Judge James Weir, said he was advised to apply for suppression because it would be better if the Papples and West were not publicly associated with his companies.
It was revealed in court that the man had been a director of 71 companies, including a prominent finance company, although he said he had recently moved to Australia and had resigned from a number of directorships.
It was important for him not to be connected with the Papples and West, as he had been "duped into doing an investment with people who conned me for a lot of money", he said. "I don't want to make that public."
The man had told the court he invested $561,066 with the trio.
He received a payment of $120,000, followed by a further three sums totalling $336,000.
He then learned that the Papples' businesses, Wespap and Lakeland Wealth Creators, had been placed in liquidation and the chances of getting his money back would be unlikely.
He said he had agreed to invest the money on a personal basis and did not consider using money from one of the many financial institutions of which he was a director.
Asked why a man of such financial experience and knowledge would "chuck half a million or so" into a scheme that promised returns of 160 per cent over two months, he said he was used to people honouring their contracts and their word. "That's how you survive in business."
He did not hold responsible an acquaintance who introduced him to the Papples and Ms West.
"The error was in the people not being trustworthy and not honouring the contract. This came down to trust and I was told I could trust these people. I believed them. I was wrong."
He now doubted there was any investment and believed the trio had spent the money themselves.
"I have heard of them buying assets for themselves, buying a house, assets and jewellery."
Johns told the court that he was paid a total of $75,000 to get his business acquaintances to invest money with Wespap.
He was originally offered a deal involving US$10 million that would give a return of 120 per cent over two months. One acquaintance declined the deal, but subsequently agreed to invest US$250,000.
Asked to describe the investment, Johns said he now thought it was "absurd".
The money was to be held in Wespap's WestpacTrust bank account in Rotorua. They were then told the money needed to be kept in an account in Papple's name in New York, as there was concern in the United States that since September 11 overseas funds might have a "criminal origin" tagged to it.
Asked how the investment would generate such high returns, Johns said the funds would be electronically scanned two or three times a day and would somehow be used as security for trading.
Johns also got two other acquaintances to invest. One was another high-flying businessman who has name suppression, and the other was Hyslop, who hit national headlines four years ago when he was investigated for insider trading in Fletcher Challenge shares.
Hyslop has been a director of several companies, including family restaurant chain Cobb & Co.
By June 2003, Johns said, his clients were becoming worried about the irregularity of payments. They tried unsuccessfully to get back their money.
The Papples and West gave various reasons for the irregularity of the payments, including delays as a result of a European bank holiday, delays in money being cleared after it had been transferred from a New York bank account to one in Hong Kong, and the need for individuals to go to Switzerland to collect the money personally.
Then it emerged that liquidation action was being taken against Wespap and the Papples' other money-making company, Lakeland Wealth Creators.
Johns revealed that he followed Papple to Geneva to try to find out what happened to money.
When he asked Papple why the investment terms had changed, Papple could not answer his questions.
The hearing is before Justices of the Peace Barry Gayland and Daphne Stewart and is expected to last two weeks.
* Bill Papple, 67, and Lee Papple, 49, both of Rotorua, are charged along with Dunedin resident Tina West, 44, with conspiracy to commit fraud.
* The Papples' companies, Wespap and Lakeland Wealth Creators, have been placed in liquidation.
* Witnesses say the Papples were offering investors returns of as much as 160 per cent.
* One prominent company director told the court he did not want the public to know he had been "conned" for more than $500,000.