Dreamers came down to Earth with a thump

When word got out in Southland that people in the know could make fabulous sums from a highly secret form of investment, everyone wanted a piece of the action.

Not for them the 5 or 6 per cent return from the building society. They wanted to be part of the exclusive club of high-rollers taking part in international "trading programmes" with returns of up to 2000 per cent a week.

These were investments reserved for big business, Governments and high net-worth individuals who conspired to pay the little people a pittance while reserving the real money for themselves.

According to the spiel, there were only 10 traders in the world certified by the United States Federal Reserve.

And when investors in Dunedin and Invercargill heard of Equity Solutions Group, they thought they had found the holy grail of investment.

On offer was a return of 500 per cent for a six-to-eight-week term.

Their unrealistic expectations came under the spotlight during the past fortnight at the Auckland District Court, where Douglas John Potter, 65, of Gore, and Bryan Thomas Dolheguy, 67, of Remuera, were charged with theft of US$1 million ($1.4 million) by misappropriation.

They were said to have told investors their money would be "blocked" in a New Zealand bank account and therefore risk-free. A letter from the bank was supposed to be provided to an overseas "trader" who would somehow use the letter to conduct lucrative trades.

Opportunities to get involved in a trade were rare, and when they arose they were not to be missed.

So when a mysterious US trader called Partridge told the pair there was a lucrative deal to be done, but the money had to be sent by telegraphic transfer immediately or they would miss out, the pair agonised before deciding to send the money.

It went into the account at the Wells Fargo Bank in Arizona of a company called El Dorado Mining International, named after the fabled lost city of gold.

Not surprisingly, the money was never seen again.

The Serious Fraud Office said Potter and Dolheguy and the investors had been victims of a "prime bank investment fraud".

Prosecutors Mark Woolford and Shane Walsh told the jury that irrespective of whether the pair were deceived, they had no authority to send the money abroad.

After deliberating for 24 hours, the jury yesterday morning found the pair not guilty.

Hugh Rennie, QC, for Potter, and Guyon Foley, for Dolheguy, said there was no binding direction that the money stay in New Zealand, and even if there was, their clients did not deal with the funds dishonestly.

They had caved in under "clever psychological pressure" when they were contacted by Partridge, a real trader, who "played them beautifully".

Mr Foley said Dolheguy was a gullible, foolish dreamer, not a cheat.

After the hearing, Mr Rennie said the SFO was making presentations around the country emphasising that these schemes were "insane bunkum".

"Everybody got burned in Gore and the lesson has been learned there. The next time it will be Whakatane, Nelson, Whangamata ... "

Potter told the jury that he repaid investors $27,000 out of his own money. And outside the court, Dolheguy said he felt sorry for investors who lost money.

"We were sucked in by a professional guy who makes his money from people like us who are looking to make money."

He now saw clearly that the scheme was a fiction and they were duped by a "hell of a hype".