Ponzi scheme mastermind appears in court in New Zealand

The story around Cameron Gladstone Investments Limited and Hansa Limited, the investment businesses run by Paul Clifford Hibbs, is starting to unravel, as Mr Hibbs appeared in the Christchurch District Court on Tuesday in relation to a New Zealand Serious Fraud Office (SFO) prosecution.

The New Zealand SFO has announced that Mr Hibbs faces Crime Act charges of ‘False statement by promoter’, ‘Theft by person in special relationship’, ‘Using forged documents’ and ‘Forgery’. Each of these counts carries a maximum penalty of 10 years in prison.

Under the allegations, from around 2008, Cameron Gladstone Investments Limited and Hansa Limited, developed into a Ponzi scheme. Mr Hibbs provided clients with false reports with regard to their investments – for instance, he sold investments without clients’ knowledge, he falsely reported the proceeds of sales were held in cash management accounts or investments had been purchased. The SFO claims that Mr Hibbs used investors’ funds for purposes other than required – he used clients’ funds to make payments of capital or investment returns to other clients, a typical feature of Ponzi schemes.

The legal action comes after investors who suspected their money was misappropriated reported the matter to the New Zealand Financial Markets Authority (FMA). Last year, FMA published a notice about investigating Hansa and Mr Hibbs and asked for more information from investors.

According to media reports, at least $20 million were missing from Hansa’s accounts. Both Cameron Gladstone Investments Limited and Hansa Limited have been put into liquidation.

According to the first report by the liquidators of Hansa, the company failed to invest and manage the funds in line with the agreements signed with investors. Instead the company was run as a Ponzi scheme and and Cameron Gladstone Investments Limited was also involved in the fraud.

Mr Hibbs will reappear in the Christchurch District Court on July 12, 2017.