A Dunedin man who ran a Ponzi scheme has admitted defrauding investors of at least $15.7 million.
Barry Edward Kloogh (57) pleaded guilty in the Dunedin District Court today to all but one of the charges brought by the Serious Fraud Office.
Kloogh provided financial advisory services through several companies of which he was the sole director and shareholder. He had approximately 2000 active clients in May 2019.
The Director of the SFO, Julie Read, said, “Mr Kloogh exploited the trust and goodwill of his clients to misappropriate a significant amount of money from them. Many victims lost their retirement savings and are not in a position to recover financially.”
An SFO statement after Kloogh’s first appearance gave further details of the extent of Kloogh’s business dealings, and how much money might be lost.
“Mr Kloogh provided his financial advisory services through several companies of which he was the sole director and shareholder,” a spokesman said.
“He had approximately 2000 active clients in May 2019.”
That date was when the SFO executed search warrants at his home and business premises, the ODT reported.
In August, two firms operated by Kloogh (57), Financial Planning Ltd and Impact Enterprises Ltd, went into liquidation.
The official assignee’s first report into the liquidation of FPL and IEL estimated that more than 170 clients were owed between $12 million and $14 million.
The SFO yesterday said its charges alleged Kloogh had defrauded investors of at least $15.7million.
Charging documents allege Kloogh stole almost $630,000 belonging to two investors, and included a representative charge alleging $15 million belonging to a number of investors was stolen.
The defendant was remanded in custody to reappear in the Dunedin District Court for sentencing on 14 May.
The Financial Markets Authority referred the matter to the SFO and assisted the agency in its investigation.
Pro Bono Legal Help
Other SFO allegations include that Kloogh altered bank statements and portfolio valuations, made fictitious investments, and placed money into accounts other than those where he said he would deposit the funds. The SFO also alleged that Kloogh used loaned money to repay investors rather than buy real estate, as he had represented.
Kloogh was ordered to surrender his passport and not apply for a new one, remain resident at his bail address, and to have no contact with investors in his failed companies unless through the official assignee.
Affected investors have formed a group to offer each other support and advice following the demise of Kloogh’s companies.
A spokeswoman said investors did not wish to comment at the moment, but urged anyone who believed they had lost money to join the group.
Several Dunedin lawyers and advisers are helping the group on a pro bono basis.