Duo behind fraudulent Forex broker BlackfortFX get sentenced in New Zealand

The individuals behind fictitious Forex broker Arena Capital Limited, also known as BlackfortFX, were sentenced in New Zealand today.

The Serious Fraud Office has confirmed that Lance Jack Ryan (44) was sentenced at the Christchurch District Court today. He has been jailed for seven years and six months, with a minimum non-parole period of three years and nine months, for charges brought by the SFO. Mr Ryan had pleaded guilty earlier to charges of ‘Obtaining by deception’, ‘False accounting’, ‘Forgery’, ‘Reproducing a document with intent to deceive’ and ‘Theft by person in special relationship’.

Lance Jack Ryan, also known as Lance Jared Thompson, used the forex platform BlackfortFX as a façade to persuade more than 900 investors, who were mostly from the Christchurch region, to invest about $8.3 million in the Ponzi scheme. Mr Ryan has a number of previous dishonesty convictions including ‘misleading a social welfare officer’ and ‘taking or using a document for pecuniary advantage’, together with other Insolvency Act and Companies Act offences.

Jimmie Kevin McNicholl (56) who was the public face of BlackfortFX, as well as its sole shareholder and director, was sentenced to 11 months of home detention and $50,000 reparation. As FinanceFeeds reported in May, he pleaded guilty to obtaining the registration as a financial services provider by deception.

In reality, BlackfortFX did not conduct any Forex trading, or any other form of investment activity.

KordaMentha were appointed receivers of Arena in May 2015, after New Zealand’s Financial Markets Authority (FMA) confirmed that it was undertaking an investigation into the “broker”. The FMA obtained asset preservation orders over the assets of Arena/Blackfort and associated persons amid concerns that investor funds might be at risk.

In October 2016, New Zealand’s Serious Fraud Office filed charges against Arena’s director Jimmie McNicholl. The SFO alleged that BlackfortFX had obtained registration as a financial services provider by deception. Under the allegations, BlackfortFX was a Ponzi scheme into which investors paid approximately NZ$8.3 million when there was in fact, no trading undertaken.

Commenting on the sentences, SFO Director Julie Read said:

“The sentence imposed on Mr Ryan reflects the very serious nature of his offending. He cynically manipulated vulnerable and trusting investors, many of whom have suffered considerable stress in addition to financial loss. Some of the lost money was payouts from the Earthquake Commission. Mr Ryan also deceived the Financial Markets Authority and the Companies Office. The prosecution of such matters is an important aspect of protecting New Zealand’s reputation as a safe place to invest and do business.”