US regulator freezes Kiwi bank accounts
The United States' Securities and Exchange Commission has frozen more than a dozen New Zealand bank accounts and banned an Auckland man from selling unregistered securities.
According to a June 9, 2014 default judgment from California's Western District Court, Chris Pedras - who lives in Auckland's Silverdale - has been ordered to pay US$5.2m representing civil penalties and "ill-gotten gains" from his Ponzi schemes.
The judgment also ordered the freezing of dozens of bank accounts, including 14 based in New Zealand held with the ANZ, BNZ and Westpac.
Pedras did not reply to questions sent by the Sunday Star-Times.
Details of the allegations and the emergency asset freeze were detailed in both a November 4 SEC press release and the SEC complaint itself.
The SEC action related to Pedras' operation of an investment scheme called Maxum Gold Bnk and an associated offer of shares in a company claiming to operate a string of renal dialysis clinics in New Zealand.
The SEC alleged both schemes were bogus and relied on a network of shell companies registered in New Zealand and the United States.
According to the SEC complaint, Pedras' schemes attracted US$5.6m from more than 50 US-based investors through Maxum Gold, which claimed to generate monthly returns of up to 8 per cent, and later the sale of shares in FMP Medical Services.
The SEC alleged the returns from Maxum Gold were recycled funds from new investors, and when cash dried up, Pedras then turned to offering shares in FMP Medical Services.
In October New Zealand's Financial Markets Authority (FMA) cancelled the prospectus of FMP Medical Services, stating it was false or misleading.
Late last year the SEC, when announcing the schemes had been shut down, thanked the FMA for rendering assistance.
The FMP Medical Services prospectus contains little detail about the planned business - operating a network of dialysis clinics in New Zealand - but plenty of explanation by Pedras for a slew of online complaints about his business conduct.
In the prospectus, Pedras blamed many of the complaints on a "disgruntled former agent".
He also said he had obtained a commercial banking licence in Tonga, but the venture had foundered.
"Unfortunately, due to various corrupt individuals on the island, moves were made to remove the licence and various legal actions were commenced to that end . . . some clients lost money, but [Pedras] personally saw to it that they were repaid, and this took him about three years."
Pedras said in the offer document he had a background in running nightclubs, armoured car services and ATM machines in Hawaii.
Internet archives of Maxum Gold's website reveal spelling mistakes and references to non-existent regulators.
The website said Maxum Gold was operating under the guidelines of "New Zealand Inland Revue Department" and was "safer than a bank".
Pedras, also known as Antone Pedras, has formerly lived in California and Hawaii.
The island state's Star-Bulletin reported in 1997 that Pedras - described as a local nightclub owner - had lost US$135,000 to Nigerian scammers.
Pedras described how he thought he was investing in a refinery in the African country and would have received millions in return.
Pedras said he had gone public about the 1997 scam in order to warn others: "I was a fool, now I'm paying the price. But at least someone else in the state doesn't have to get cooked by this fraud," he said.
Sunday Star Times