KEY POINTS:
A Kiwi treasure hunter facing jail in Australia says he will sue his New Zealand lawyers for landing him in trouble with the law.
Lawrence James Phillips, 38, has been found guilty in a Brisbane court of failing to comply with Australian securities law in raising funds to
salvage lost treasure in shipwrecks.
Though the scheme aimed to raise more than $2 million internationally, Phillips and Queenslander Christopher Paul Woolgrove were prosecuted only over about US$620,000 ($761,000) worth of Australian investments, the Courier Mail newspaper reported.
Woolgrove and Phillips - who now lives in Brazil - pleaded guilty to operating an unregistered managed investment scheme between October 2001 and February 2004.
Woolgrove was arrested after a joint investigation by the Australian Federal Police and the Australian Securities and Investments Commission (ASIC). The Auckland-based Serious Fraud Office was also involved.
In 2006, the High Court at Auckland spent three days hearing evidence for the Australian Director Of Public Prosecutions (DPP) for the trial.
The company's website said the trust was incorporated in New Zealand and returns of up to 1365 per cent on investment were allegedly promised.
In Australia, the Crown did not allege they had committed a fraud but they were alleged to have acted at least recklessly in not registering the company to comply with the Corporations Act.
All investment funds must be registered with ASIC.
Prosecutor Gary Long asked that the pair be jailed as a general and personal deterrent, but Judge Tony Rafter put off sentencing until next week.
Mr Long said though New Zealand solicitors were involved in establishing the scheme, Phillips and Woolgrove recklessly ignored the need to register the company in Australia.
Barrister Simon Lewis said Phillips was suing the solicitors in the New Zealand High Court.
He said Phillips should not serve any jail time because he had already served 71 days in very harsh conditions in Brazil, where he was kept in a small crowded cell with 15 others and forced to live on rice and water.
The court was told the pair established a scheme entitled the Hatcher Unit Trust (HUT) to raise more than $2.6 million to help fund a series of operations to find shipwrecks across the globe and salvage them.
Would be investors were told if all the lost treasure could be recovered from the ocean and its wealth evenly distributed, every person on earth could live comfortably for the rest of their lives.
Investors have not received any returns so far.
Mr Long said each man was centrally involved in setting up the company and each benefited substantially, with each receiving about US$170,000 from the Australian investments.
- NZPA
