New Zealand businessman David John Hobbs, of Stoke, near Nelson, allegedly masterminded a series of investment schemes which Australian authorities claim netted more than $58 million.
Mr Hobbs, his wife Jacqueline Hobbs, and six Australians have been accused of misleading investors.
Since 2002 hundreds of Australians had invested more than
$58m through funds which had targeted superannuitants, the Australian Securities and Investments Commission (ASIC) said today on its website.
"In fact, investors' funds were dispersed to various off-shore accounts including in New Zealand, Hong Kong, and the US and some were also used, as in a Ponzi scheme, to pay monthly returns to other investors," ASIC said.
"Only a portion of investors' funds were actually invested and, contrary to the promises made, these funds were used to engage in high risk commodities, futures and options trading in the USA".
ASIC has sought court orders to disqualify the people managing the investment funds.
It said Mr Hobbs was the principal among the unlicensed operators of 14 unregistered offshore-managed investment funds operating in Australia, along with a former Vanuatu company, Future Trading Corporation Ltd.
In 2007 and 2008 ASIC froze eight offshore trading accounts containing investors' funds.
According to ASIC, the scheme operators required investors to set up their own off-shore companies, in countries such as the British Virgin Islands, Anguilla and Vanuatu to circumvent Australia's financial services laws.
Most of the investors and self managed superannuation funds were promised access to offshore investment opportunities and/or the wholesale financial market generating returns in the order of 3 per cent to 4 per cent each month and that there was no risk of losing the invested money.
Other investors were promised a stake in offshore investment companies involved in project investment, principally in China.
ASIC is also seeking court orders for Mr and Mrs Hobbs, Ms Li and Mr Collard to pay a financial penalty.
The case will return to court on June 11.
- NZPA
