Ponzi investors 'refusing to speak' to liquidators

FMA and SFO investigations continue.

Investors who withdrew more money than they deposited in a Christchurch ponzi scheme are “refusing to speak” to liquidators, who have launched legal action against 12 such clients.

And a judgment released yesterday, which found investors who paid $249,000 into Arena Capital a week after regulators moved to shut it down should get their money back, is unlikely to be appealed.

The company, trading as BlackfortFX, was shut down by the Financial Markets Authority in May last year.

Liquidator KordaMentha’s November update said more than 900 people were owed about $7 million while 96 clients owed the company about $2.5 million.

This figure exists because those clients were paid “fictitious profits” by the company, of whom 14 clients had agreed on repayments with the liquidators, worth about $200,000.

The latest liquidators’ report, however, says 21 clients have now agreed repayments while formal legal notices have been served on 12 investors.

“A number of debtor clients are refusing to speak with us about our claims and have failed to agree on repayment arrangements that are appropriate to their circumstances.

“We intend to take further action against these clients.”

The FMA today defended its disclosure relating to Arena, which saw $249,000 paid in by investors in the six days between asset protection orders being obtained and the FMA announcing its action.

KordaMentha says it will not appeal yesterday’s decision and, if none of the 17 clients appeal, the $249,000 will be repaid.

“Repaying these post-APO deposits in full will reduce the amount of money available to Arena’s other clients and creditors.”

The report says various recoveries have been made, including two vehicles which have been sold, $80,000 deposited for two luxury vehicles, and a section of land in Auckland, which was bought for $1.18 million using Arena’s money during the month it was shut down.

Arena’s sole director is Christchurch resident Jimmie McNicholl, while Lance Jack Ryan, who in 2005 was convicted of welfare fraud after stealing the identities of five dead people, is also said to have played a key role.

Arena began receiving deposits from clients in May 2014, who understood the money would be placed with a Swiss trading entity.

They were also provided with a statement claiming profits had been made but KordaMentha says they were fictitious.

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