Fraudster's family to benefit
Investors are furious that the family of the man responsible for New Zealand's single biggest fraud will walk away with what is likely to be more than $1 million, while hundreds of victims have lost everything.
The Lower Hutt mansion of David Ross, which has a capital value of $2.2 million, has sold after coming to the market late last year.
But investors will only gain half of the sale, while Ross' wife Jillian receives the rest.
In November Ross was jailed for 10 years and 10 months for operating a fraudulent scheme in which private investors lost about $115m.
His company Ross Asset Management (Ram) fleeced at least 700 investors through portfolios in which they thought they had more than $380m.
Ross has since appealed against the minimum non-parole period of five years five months as "manifestly excessive".
But a settlement approved in the High Court at Wellington yesterday has confirmed Jillian Ross would take half of the value of the sale of the home and its assets.
Real estate agent Debbie Curran would not confirm the sale price, but based on the property's value Jillian Ross could walk away with in excess of $1m.
Furthermore Ross' children, Anna and William, have kept over $200,000 in shares in a deal Justice Stephen Kos said had a "heavy dose of pragmatism".
But Ram Investors Group head Bruce Tichbon said he felt "screwed" and "very uncomfortable" by the agreements.
The family was walking away with money which would have comfortably paid off the student loan of his own daughter, who had just started university, he said.
"That [money] could easily belong to the sad widows and the retired 90-year-old couples I've spoken to that have lost everything.
"Investors who have lost money are being quietly exhausted financially and emotionally and kind of tenderised to a point where they will accept crumbs instead of their sandwich back."
PwC liquidator John Fisk said the Ross mansion, at 105 Woburn Road, was in a trust established in 1987, before Ram was founded in 1990.
"It would have been difficult to prove that Ram investor money, that any of that, went into the property so we actually think it's a good outcome for the investors."
He said Ross' half of the sale would be distributed to Ram investors, but would not go into potential value as the house was yet to settle.
The deal was not opposed in the High Court yesterday, with Jillian Ross being said to support it.
"Yes, I suspect she would," Justice Kos said.
Ross' children, William and Anna, would also receive about $226,000 between them, after an agreement was reached between them and the liquidator and approved in court yesterday.
Last year a Ross family trust which held shares in United Kingdom company Arria NLG was placed into receivership so PwC could investigate how the shares were paid for.
The receivership had been opposed by the children.
But PwC's investigation could not find evidence of precisely where the cash had come from, though there were some movements from Ram portfolios to the children.
As such, a settlement was reached whereby the shares, which were now worth about $453,000, would be split.
Fisk said it was a pragmatic solution for what would have turned out to be a difficult process for both parties.
- © Fairfax NZ News