The Serious Fraud Office is prosecuting two Auckland businessmen involved in a $6 million pyramid-style investment scheme.
A jury was selected in the High Court at Auckland this week for the eight-week trial before Justice Patricia Courtney.
Roderick Bernard Harrison, of Kohimarama and Alan Victor Jones, of Remuera, face aseries of charges in relation to their investment scheme.
The SFO's summary of facts and indictment states that between January 1999 and December 2002, Jones and Harrison operated the Harvest Investment Club which allegedly defrauded members of the public here and overseas by promoting investment schemes and collecting money. Harvest promised a high-yield interest of 4 per cent a month. But the SFO said the pair knew their promises were false.
Investors paid $4.7 million into two bank accounts run by Harvest and Kingbourne Investments. They put a further $1.3 million into the Standard Chartered Bank in Jersey under the name of Crownthorpe International SA. Investors thought the funds would be invested offshore in the high-yielding schemes, the SFO said.
Harrison and Jones raised the money from 46 investors, including family members. People wanted to make provision for their retirement and all the money was deposited into accounts controlled by the pair.
The SFO alleges that about $2.2 million of the $6 million in funds was used to pay for shares in various companies made in the names of Jones and Harrison. No offshore investments were made from either the Harvest or Crownthorpe bank accounts.
"Money from these accounts has been used to make capital and interest payments to other Harvest Investment Club investors and also to make investments in the names of companies and trusts associated with Jones and Harrison," the SFO claimed.
"The majority of the remaining funds... have been used to pay for personal debts and living expenses of Jones or Harrison."
The two are facing charges of conspiracy to defraud, using a document with intent to defraud and defrauding members of the public on the basis of false terms or promises.
