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Charges laid against Kloogh

Former financial adviser Barry Kloogh, who allegedly ran some type of Ponzi scheme, has appeared in court for the first time.

Thursday, February 20th 2020, 10:55AM

Barry Kloogh

He faces a range of charges, including forgery.

The Serious Fraud Office (SFO) alleges he defrauded investors of at least $15.7 million.

Kloogh faces representative charges of false accounting, false statement by promoters, theft by person in special relationship and obtaining by deception. He also faces individual charges of forgery, theft by person in special relationship and obtaining by deception.

He had approximately 2,000 active clients in May 2019.

The Financial Markets Authority referred the matter to the SFO and assisted the agency in its investigation.

Kloogh’s offices were raided by the SFO in May.

Court documents show investors put nearly $16 million into his companies between 2012 and 2019 but authorities are still trying to locate $8.2 million in investments.

Two of his businesses, Impact Enterprises Limited and Financial Planning Limited, of which he was the sole director, were placed into liquidation by the Dunedin High Court on August 29. They have liabilities of more than $12.5 million.

Breathe Financial was a registered financial provider whose clients were advised on an investment plan by Kloogh, the liquidators noted.

Most of the investors had the purchase of their investment and subsequent reporting arranged via a wrap platform, which should have meant that none of their money passed through the adviser or his business.

But the liquidator said the evidence was the companies operated as a Ponzi scheme controlled by Kloogh, in which money from new investors was used to pay existing ones.

“The liquidator will need to review and verify the purchase of each investment currently showing as a custody asset. Initial sample investigations have shown that the actual funds provided by one investor may have been used for other purposes (eg to repay earlier investors), or co-mingled with other funds.

“For each investor, an investment that appears in the records in their name, may actually be purchased with another investor’s funds or a mixture of investors’ funds. The scale of co-mingling and funds misapplied is not known at this stage and will be the subject of investigation. This will involve the liquidator having to assess hundreds, potentially thousands of transactions to verify claims by investors to assets currently held with the custodian on trust.”

He did not enter a plea and was remanded to reappear on March 12.

Part of Kloogh’s bail conditions include not having any contact with investors.

Tags: Barry Kloogh fraud ponzi

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Last updated: 21 September 2020 10:48am

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