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Ponzi scheme operator pleads guilty

Media Release

11 October 2017

Ponzi scheme operator pleads guilty

A Christchurch man who used his businesses to conduct a Ponzi scheme has appeared in the Christchurch District Court today and pleaded guilty in a Serious Fraud Office (SFO) prosecution.

Paul Clifford Hibbs faced Crime Act charges of ‘False statement by promoter’, ‘Theft by person in special relationship’, ‘Using forged documents’ and ‘Forgery’. He has pleaded guilty to all of those charges and has been remanded in custody until sentencing.

Mr Hibbs owned and operated Cameron Gladstone Investments Limited and Hansa Limited. Through these entities Mr Hibbs provided clients with false reports in relation to their investments and used investors’ funds for purposes other than required.

SFO Director, Julie Read said, “If investors have doubts, a good option is to check the list of Authorised Financial Advisers on the Financial Markets Authority website. All financial advisers must comply with the requirements of the Financial Advisers Act 2008. Mr Hibbs was not registered.”

Mr Hibbs will reappear for sentencing in the Christchurch District Court on 7 February 2018.

ENDS


Note to editors

Background information

Mr Hibbs was employed for a number of years as a private banker, dealing with high net worth individuals, buying and selling shares and managing clients’ investment portfolios. In 2002 he left banking and incorporated investment advisory businesses, Cameron Gladstone Investments Limited and later, Hansa Limited. He solicited some of his old banking clients who bought with them their existing portfolios and investments.

Mr Hibbs was not a registered financial services provider.

Crimes Act offences

Section 220 Theft by person in special relationship
(1) This section applies to any person who has received or is in possession of, or has control over, any property on terms or in circumstances that the person knows require the person—

(a) to account to any other person for the property, or for any proceeds arising from the property; or

(b) to deal with the property, or any proceeds arising from the property, in accordance with the requirements of any other person.

(2) Every one to whom subsection (1) applies commits theft who intentionally fails to account to the other person as so required or intentionally deals with the property, or any proceeds of the property, otherwise than in accordance with those requirements.

(3) This section applies whether or not the person was required to deliver over the identical property received or in the person’s possession or control.

(4) For the purposes of subsection (1), it is a question of law whether the circumstances required any person to account or to act in accordance with any requirements.

Section 242 False statement by promoter, etc

(1) Every one is liable to imprisonment for a term not exceeding 10 years who, in respect of any body, whether incorporated or unincorporated and whether formed or intended to be formed, makes or concurs in making or publishes any false statement with intent—

(a) to induce any person, whether ascertained or not, to acquire any financial product within the meaning of the Financial Markets Conduct Act 2013; or

(b) to deceive or cause loss to any person, whether ascertained or not; or

(c) to induce any person, whether ascertained or not, to entrust or advance any property to any other person.

(2) In this section, false statement means any statement in respect of which the person making or publishing the statement—

(a) knows the statement is false in a material particular; or

(b) is reckless as to whether the statement is false in a material particular.

Section 257 Using forged documents

(1) Every one is liable to imprisonment for a term not exceeding 10 years who, knowing a document to be forged,—

(a) uses the document to obtain any property, privilege, service, pecuniary advantage, benefit, or valuable consideration; or

(b) uses, deals with, or acts upon the document as if it were genuine; or

(c) causes any other person to use, deal with, or act upon it as if it were genuine.

(2) For the purposes of this section, a document made or altered outside New Zealand in a manner that would have amounted to forgery if the making or alteration had been done in New Zealand is to be regarded as a forged document.


Section 256 Forgery

(1) Every one is liable to imprisonment for a term not exceeding 10 years who makes a false document with the intention of using it to obtain any property, privilege, service, pecuniary advantage, benefit, or valuable consideration.

(2) Every one is liable to imprisonment for a term not exceeding 3 years who makes a false document, knowing it to be false, with the intent that it in any way be used or acted upon, whether in New Zealand or elsewhere, as genuine.

(3) Forgery is complete as soon as the document is made with the intent described in subsection (1) or with the knowledge and intent described in subsection (2).

(4) Forgery is complete even though the false document may be incomplete, or may not purport to be such a document as would be binding or sufficient in law, if it is so made and is such as to indicate that it was intended to be acted upon as genuine.

(5) Every person is liable to imprisonment for a term not exceeding 3 years who, without reasonable excuse, sells, transfers, or otherwise makes available any false document knowing it to be false and to have been made with the intention that it be used or acted on (in New Zealand or elsewhere) as genuine.


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