Shane Richard Scott has been sentenced to four years, eight months’ imprisonment for operating a Ponzi scheme, in a prosecution by the Serious Fraud Office.
Mr Scott appeared in the Auckland High Court today.
In September he pleaded guilty to four charges of ‘Obtaining by deception’, 20 charges of ‘Theft by person in special relationship’, one charge of ‘Using document with intent to defraud’ (for offending prior to 1 October 2003) and two charges of ‘Obtaining by false pretence’ (for offending prior to 1 October 2003).
Mr Scott operated a Ponzi scheme with no direct evidence of any legitimate investments.
Mr Scott had some friends and associates who invested with him over a number of years and some who were relatively short term.
The long term investors believed he had been working on various overseas investments. The short term investors believed they would receive high returns in relation to property developments and exporting/importing deals.
The total of Mr Scott’s offending was approximately $5.4 million.
“A Ponzi scheme works by using the money provided by later investors to pay out the earlier investors. There was never an intention to invest the money as promised and inevitably the scheme falls over when the new investors’ money is insufficient to pay out ‘investments’ that have fallen due,” says SFO Director, Julie Read.