"David Ross, you are the worst kind of person. You gained my trust, confidence and friendship, while acting illegally and immorally."
These were the words and sentiment of one of the victims of a multimillion-dollar Ponzi scheme run by a Wellington financial advisor.
In the Wellington District Court this morning, Ross, 63, was sentenced to 10 years and 10 months in prison with a minimum period of half the term in prison.
He had previously admitted eight charges, including false accounting charges and theft by a person in a special relationship. They were laid following an investigation by the Serious Fraud Office (SFO) and the Financial Markets Authority (FMA).
The prosecutor called unprecedented offending and "the most serious of its kind in New Zealand to date".
Before Judge Denys Barry handed down his sentence, the court heard four emotionally charged stories of victims who told of losing their entire savings, their homes and of Ross treating them as friends while misusing their money.
Ross was the director of Ross Asset Management (RAM), and ran the scheme which paid out money to investors using their own money or using funds from other investors, rather than its own profits.
Large portions of Ross' client portfolios, which were shown as invested through broker Bevis Marks, were fictitious and never existed. This resulted in an overstatement of investment positions by more than $380 million. At least 700 clients in New Zealand and overseas lost around $115 million in the more than a decade-long scam.
The scam began to unravel in 2012, when investors started complaining they were experiencing difficulty or unable to withdraw their fund from RAM.
The FMA then applied to the High Court to bring in the receivers.
Prosecutor Kristy McDonald called the offending premeditated, systematic and an "egregious breach of trust".
"No fraud case comes close to it in terms of magnitude and scale," she said.
"It was premeditated and the motivation was driven by ego and that he wanted to be seen as leader in this field."
A number of victims were vulnerable in that some were ill, or too old to recover from the financial loss.
Ross' lawyer Gary Turkington said his client read each of the victim impact statements and had "deep, personal regret" for the position he left the victims in.
"He appreciates and wishes that he could turn the clock back and that this had never happened. It can't happen. And there is a wreckage now that it is your duty [Judge Barry] to address."
Ross and receivers yesterday signed a deed which ensured every asset he had an interest in, whether it was involved in the offending or not, will go to the receivers.
He had no offshore bank accounts.
"Essentially, he has taken the shirt off his back to give whatever remains to those people," Mr Turkington said.
Ross had cooperated with the authorities, as best as he could, "given a tangled situation, a mishmash of fictitious investments, a labyrinth of money trails".
During Mr Turkington's submissions, Judge Barry had to silence members in the public gallery who scoffed at suggestions of what discount in sentence Ross deserved, to allow him to finish.
Judge Barry labelled Ross a liar and a thief.
"At the heart of your dishonesty is not just the money lost, but the lengths you went to cultivate relationships to keep their trust and their money. These are honest and hardworking people. These aren’t faceless entities - these are the life savings of people you have dissipated.
"Effectively, your hubris has wrought incalculable harm."
Judge Barry conceded no sentence imposed on Ross could help the victims or give them solace.
"They simply remain your victims."
Judge Barry took into account Ross' cooperation, ill health and offer to pay some reparation.
source: newshub archive