The All Black, his clients and the fraud case

Steven Pokere was one of New Zealand's most gifted All Blacks. But his stellar rugby career has been overshadowed by a court case in which he has been charged with fraud. KIM CHISNALL investigates.



One of the most significant days in Steven Pokere's life was overshadowed by flour bombs and bloodied and beaten New Zealanders. It was September 12, 1981, when Pokere ran on to Eden Park, and into sheer hell - the fresh-faced 23-year-old making his All Black test debut on a field surrounded by barbed wire and a ground swamped by anti-Tour protesters. As well as dodging the huge Springbok forwards that day, Pokere and his team-mates were forced to outwit the light-plane pilot dropping flour bombs on to the ground. Pokere avoided the bombs, although All Black prop Gary Knight was an unlucky target.

It was an unnerving start to the masterful midfielder's 18-test career, in which he came to be regarded as one of the finest and naturally talented All Blacks of all time, a player who stepped off both feet and was, despite his light stature, a fearless tackler.

Today, Pokere lives with his wife Lesley in Howick. He is a devout Mormon - and is facing arguably a challenge bigger than anything he confronted on the rugby field. Pokere, 46, is accused of conspiring to defraud investors who put money through a company, FF Traders, of which he was a director. He has been committed to trial in a case which the Serious Fraud Office says investors are owed up to $3 million. It alleges the company used investors' money to pay other investors, as well as the company directors' personal and business expenses. The former company's three other directors, Tina West, Donna Frost and Phyllis Mareroa, also face fraud charges and their depositions hearing resumes next year.

The Auckland District Court last week allowed the Herald on Sunday access to the hand-up depositions in the case - the court documents that outline the Serious Fraud Office's case against Pokere, the investors' witness statements, and the sums of money allegedly involved.

According to the SFO, FF Traders received almost $4 million from investors - but put just $924,650.83 into actual investments. As we will see, many investors - most of them family or friends of the directors - say they were left devastated and out-of-pocket.

To understand how it has come to this, it is necessary to turn the clock back five years, when FF Traders was born out of death. In November 1999, Pokere's friend, Fatu Frost, died during a game of squash. At his wake, Pokere met and chatted to Tina West, who was flatting with Frost's sister Donna in Australia. The pair discussed Fatu Frost's involvement in foreign currency trading through Ord Minnett. "The idea was thrown about that maybe we could look at, you know - a similar thing . . . passing on the things he was doing," Pokere told the SFO investigators.

From there, Pokere, West, Frost, and a friend called Phyllis Mareroa set up the company as an investment vehicle for mainly family and friends.

Despite Pokere having no experience in trading, Mareroa told the SFO he was given the role of accounts keeper. "He's not an accountant, he doesn't have a qualification ... but he gave our clients a level of comfort because he's ... got a nice way about him."

Pokere brought a personal touch to the investment scheme, saying he often hand-delivered profit payments to investors. He was also involved in securing the investors - court documents show most of the investors were either family of the directors (parents, aunts, cousins, and in-laws) or friends, old workmates and fellow church-goers.


Each was wooed with offers of high returns, some as much as 100 per cent over four months, and many were told their principal money would be safe. But it soon turned pear-shaped for many.

June Orrell says she trusted Steven Pokere because he was her son's friend. In her witness statement, she told the court she was introduced to Fatu Frost by Pokere - but lost a $22,000 investment after his death. "Later, Steve told me he felt sorry for me after losing money ... so he was able to offer me a good investment," she says.


In June 2000, she cashed in her bonus bonds and invested $10,000, through FF Traders. In November, Pokere offered her the chance to roll over the investment for a further two years, at a return of 100 per cent. She agreed. "He later called me to tell me that he had heard from Donna and that it appeared all my money was lost. He said that he, too, invested and lost money."

Solo mother Leonie Bradshaw, of Sydney, was encouraged to invest by her best friend Donna Frost. "Donna assured me in the strongest terms that as her best friend my money would be returned and that I had nothing to worry about."

She invested A$60,000 and, aside from some early returns totalling A$7000, has lost the lot. "It has caused me considerable financial hardship and I'm finding it extremely difficult to make ends meet and have lost my business," she says in her witness statement.

Retired teacher Kaye Riddell, Tina West's aunt, was another early investor _ handing over $10,000. She was told it would be invested in money trades, and she recalls she was promised returns of around 5 per cent. "The profit payments were regular initially, but became irregular over time."

In June 2000, she invested a further $100,000 and was promised a 100 per cent return by the end of that year. "Tina seemed to be doing very well and was very enthusiastic about everything. I therefore felt comfortable in making a second and more substantial investment," Riddell says in her witness statement.

By November 2000, she was offered the chance to invest a third time - rolling over her now $200,000. She took out $50,000, invested the other $150,000, but has never been repaid.

Retired army officer Rex Harris - an MBE recipient for his services to the military - invested a total $300,000 through several deals between December 2000 and January 2002. He says he was constantly reassured by Tina West that his money was safe, but all he ever received was $88,000.


Several other individuals and families have outlined similar woes. It was only when the Serious Fraud Office started investigating the company in August 2002 that the bigger picture became clear. SFO forensic accountant Michelle Peden clearly found the books to be a mess, saying in her witness statement the directors had no real idea of the company's financial position.

Some early investors - thinking they were being paid profits on their investments - were, in fact, receiving cash out of later investors' principal investments.

Peden said the company received $3.91 million for investment, but invested just $924,650. "In summary, the schedule shows that as at the maturity date according to each contract, the amount of principal and interest owed to investors ... totals $2,993,227.29."

The actual cash loss to investors was almost $1 million.

Peden's analysis also shows that between November 1999 and July 2002, the company paid $693,908.47 to its four directors, including $189,362.58 to Pokere.

So what did FF Traders actually invest in? More than $80,000 was lost on an internet-based stock investment game, while a further $816,574.93 was made to Fung Poh Chooi - Peden could not find any documents explaining the nature of those investments. The company received $494,609.57 back.

"Based on my analysis, I concluded that the money received from investors by the FF Traders operation was largely used to pay other investors, and for personal and business expenses of the defendants," said Peden. "There was little actual investment made by FF Traders and the amounts invested would not provide adequate returns to meet the commitments made by the directors under their contracts with investors."

SFO investigator Alex Tan told the court that the case displayed many of the same characteristics of other high yield investment programmes (HYIPs).

Known as "affinity fraud" because of the high degree of trust between investors and the promoters of the scheme, the scheme is only ever offered to family and friends and confidentiality is stressed.

Those in charge of HYIPs would often encourage investors to roll their investments over into longer terms that paid better returns, this was done often because the funds weren't available to pay back investors.

Mr Tan said because early investors got returns, others were encouraged to join the scheme.

Evidence of how far FF Traders went to paint a rosy picture of the company's position is outlined in investor Kaye Riddell's witness statement.

"In about August 2000, I went on an all-expenses paid trip to the Gold Coast as a guest of FF Traders. There were 14 of us altogether. The four directors went, as well as close members of their families. The whole tenor of the trip appeared to be celebrating how well FF Traders was doing."

Asked by the SFO about the trip, Pokere simply said it was "for fun". But in the aftermath of the SFO investigation, and with a court case pending, no one appears to be having a good time now.



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