A Christchurch man who defrauded his clients of at least $17.5 million through a Ponzi scheme has been sentenced to eight years in prison with a minimum non-parole period of four years for charges brought by the Serious Fraud Office.
Paul Hibbs was sentenced today at the Christchurch District Court. He previously had pleaded guilty to charges of ‘False statement by promoter’, ‘Theft by person in special relationship’, ‘Using forged documents’ and ‘Forgery’.
Mr Hibbs owned and operated Cameron Gladstone Investments Limited and Hansa Limited. Through these entities he provided clients with false investment reports and used their funds for unauthorised activities, which included using the proceeds from sales of clients’ investments to pay other investors. Mr Hibbs also used client money for business expenses, including paying dividends, and for personal purposes.
SFO Director, Julie Read said, “The sentence imposed today reflects the very serious nature of the offending. Mr Hibbs deceived his clients in a number of ways resulting in significant monetary losses. The prosecution of such matters is an important aspect of protecting New Zealand’s reputation as a safe place to invest and do business. People engaged in this sort of misconduct will be prosecuted and held to account.”
The Financial Markets Authority initially referred the matter to the SFO and assisted with the investigation.
FMA Chief Executive, Rob Everett, said, “Investors need to be vigilant about who they deal with and should always check to see if a financial service provider is licensed by us or another New Zealand regulator (such as the Reserve Bank), or the financial adviser is authorised by us. Our website will show which firms or individuals are licensed or authorised by the FMA.”