Witness in conman trial quizzed over $50k

Loizos Michaels in 2010. File photo / Brett Phibbs

A witness in the trial of alleged conman Loizos Michaels has been quizzed about why he handed over $50,000 he had been saving for his daughter's education when he had already been given bad cheques totalling more than $130,000.

Philip Oates, a multiple sclerosis (MS) sufferer, is giving evidence at the trial in Auckland District Court.

Michaels has denied 31 Serious Fraud Office charges of deception connected to an alleged $3 million fraud.

Mr Oates told the court today Michaels offered him a directorship in his Gold Coast film company, Salt Water Films, with the promise of a salary totalling around $1.5 million a year.

"The future looked rosy," he said.

Mr Oates didn't heed the warning signs when he received a phone call saying they were being kicked out of the film studio because the rent had not been paid.

"[Michaels] said he was taking care of it."

Then the alleged requests for money started, supposedly to buy shares in the company.

On three occasions Mr Oates was asked for $16,700, and each time he he handed over the money - in cash, he said.

He did not receive any receipts or share transfer certificates but on two occasions he was given cheques for the same amount he had given, which both bounced, the court heard.

At one point Michaels also allegedly asked for the $50,000 Mr Oates was saving for his daughter's education, which he kept in a box in his home.

Michaels' lawyer Peter Kaye asked: "Why would you give Michaels that sort of money knowing that all the previous cheques had bounced?"

"Because I trusted him," Mr Oates replied. "[He told me] it would come back to me in a couple of weeks, with interest. Silly me."

Michaels then gave Mr Oates another cheque for $100,000, which also bounced, he said.

The court also heard evidence from Mr Oates' partner, Sharon Louise Ferguson.

She was under the impression the man she knew as Michael Loizos had inherited his father's shares in a cruise line company in Cyprus worth $100m, "and basically that he was loaded".

He offered her a job as a "script reader" for Salt Water Films, for which she was to be paid $400,000 a year, she said.

She jumped at the opportunity, quitting her job with the Alzheimer's Association.

At one point Michaels asked her for $15,000 to help him pay for a private doctor who was treating his wife during a difficult pregnancy, she said.

She was unable to come up with the money but borrowed $9000 from her mother, and said she handed it to Michaels in a mall carpark in Queensland.

She said she never saw the money again.

"It was always a different excuse. It was 'things had been held up', or 'the money was coming'. There was always some sort of glitch - it was never going to be long, just a little more time."

Yesterday (Tue), Mr Oates told the court he sold his business after being diagnosed with MS in 2001.

He said he later met Michaels, who told him that he would be cured by doctors in Cyprus if he handed over thousands of dollars in "goodwill" money.

The trial continues.