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Ross investors receive some good news

Investors who suffered losses in David Ross’ ponzi scheme may be eligible to share in a tax refund, the Inland Revenue has confirmed.

Ross is to be sentenced in the Wellington High Court this morning after pleading guilty and being convicted on eight charges relating to his company, Ross Asset Management (RAM).

RAM operated a fraudulent discretionary investment management service that ultimately swindled investors of about $115 million.

At the time of its demise last November, Ross investors thought they had more than $450 million in funds under management, but the accounts were overstated by more than $300 million.

Inland Revenue has released a letter in an attempt to assist investors with their tax returns, where they may have previously included income in relation to their RAM investments.

The head of an investor group, Bruce Tichbon, says this is a big win for investors.

“We estimate that about $15 to $20 million will be refunded by IRD. We will seek confirmation of these figures by IRD.”

IRD’s letter, posted here, outlines some scenarios where investors may be eligible for a tax refund.

More by Duncan Bridgeman

Comments and questions

Good News for investors. However perhaps Mr Tichbon can make clear when they are talking losses are they talking actual losses or the inflated losses RAM reported as gains on their investment, I believe its the latter. Makes a huge difference to the actual reported losses.

Very generous of Mr Taxman to only tax "investors" on a reduced amount of a non-existent income. The fact is that Ross stole money off people and the portfolio reports that people based their tax returns on were just part of the fiction. Those few that got more back than they got stolen off them should be (and have been) taxed on the difference but everybody else should not be taxed as anything they get back is a part return of capital funds stolen from them in the first place. The only person that should be taxed on income that was created from the theft is Ross as NZ tax specifically legislates to tax illicit gains.But of course Ross has nothing to give so instead IRD will look to minimise the tax loss by refusing to fully refund the victims of the theft that paid tax on an investment that did not exist.