Ross case costly for taxpayers

HAMISH MCNICOL
Last updated 05:00 18/07/2014

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The investigation and prosecution of fraudster David Ross has cost taxpayers about $100,000 in legal fees, not including "significant" staff time at two government agencies.

Last week investors who lost more than $115 million to New Zealand's single biggest fraudster learned they faced a $330,000 bill for his legal representation.

They described the situation as "obnoxious".

Yesterday the Serious Fraud Office and Financial Markets Authority, which both investigated and prosecuted Ross, revealed the combined external legal fees for the agencies was about $100,000.

The SFO had spent about $15,000 on external legal fees from August last year, while FMA's bill had reached $84,000 since October, 2012.

But both agencies said these fees did not include "significant time" incurred by staff from each organisation.

Lawyer Gary Turkington and firm Chapman Tripp have represented Ross in relation to the charges he faced and in dealings with receiver PwC during the liquidation and receivership of his companies.

PwC has disputed the legal costs, and $220,000 has been set aside for an independent barrister to assess what an "appropriate fee" would be.

A report from PwC last week showed payments of about $108,000 had already been made from the receivership for Ross's own legal fees.

Together it effectively means $330,000 could be paid for Ross's own legal representation, for work done over 18 months, out of what would otherwise end up in investors' pockets.

Ram Investors Group head Bruce Tichbon said it was unfair for Ross to have first claim to money he had admitted stealing, for what was "gold-plated" legal representation.

In November, Ross was jailed for 10 years and 10 months for running a fraudulent scheme, through his asset management company, in which more than 700 private investors lost about $115m. His appeal against the "manifestly excessive" five-year, five-month non-parole period failed.

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