Victim of million-dollar theft warns others - don't be as stupid as me
A victim of million-dollar fraudster Ian Ludwig says she feels stupid to have handed over nearly half a million dollars for what she thought were genuine investments.
The woman, aged in her 60s, is so embarrassed she has asked not to be named.
She is one of seven victims who collectively lost more than $1.3 million to Auckland man Ian Ludwig, who on Thursday was jailed for four years and nine months after pleading guilty to charges of theft by person in a special relationship.
The former businessman convinced his victims that the money they gave him was an investment in his clients at his franchisee business New Zealand Home Loans.
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One woman gave him $410,000 in separate amounts, something she cringes at now.
She agreed to speak about her experience in the hope it would encourage others to do their due diligence when investing money with people they didn't know well.
She and her husband ran a successful business in Hamilton, their turnover topping between $5m and $8m each year.
When her husband died suddenly of a heart attack in 2000, she took over the business while looking after the pair's two teenagers.
In 2003 she sold it for a million-dollar profit and at that point, she says, began looking for investment opportunities.
That's when she met Ian Ludwig.
Through friends the pair was introduced and she knew he had helped associates get financing, and loaned people money himself.
He was a franchisee of New Zealand Home Loans, and the woman believed he was a legitimate, successful businessman.
"We sat down one day and talked about what I was going to do with my money, because I had close to $2m to invest. If you get that in your hands in one fell swoop, what do you do with it?" the woman said.
"He was supposed to be a friend that was helping me invest my money. He wasn't charging me anything for it. That was how it all sort of started."
"THE MONEY WENT IN ONE DOOR AND OUT THE OTHER"
Initially she looked at investing in property, shares and forestry blocks but Ludwig came to her with the idea that she could be a financial backer for his clients.
Some had a gap between selling their home and buying a new one and needed someone to momentarily plug the financial shortfall, Ludwig explained.
He offered to pay her 12 per cent interest on her loans, to be paid out monthly, and the woman said she felt satisfied she was helping people get onto the property ladder.
"In 2004 the property market was really bad. If you wanted to buy a house, the day the house went on the market it was sold and you paid what they were asking. You didn't bother bartering because you'd miss out," the woman said.
"I thought I was giving his clients the money to pay the deposit to buy the existing house. There's lots of people who do second-tier financing. That's what I thought I was doing, that I was just helping people get to the next level."
The woman began receiving receipts for her investment, printed on New Zealand Home Loan stationery, and she received monthly interest payments, satisfying her that everything was above board.
Years later Ludwig said he had a client who was interested in buying an apartment block, but that he needed capital.
"I wanted to seal (the original investment) at $200,000, that's all I wanted to do. $200,000 was fine. But one day he rang me at work and said one of his clients was buying a block of apartments and they ... hadn't quite got their financials together and did I have a spare $250,000 to lend them just for three months?
"My first reaction was no, and he said, I'll have it back in under three months and I thought, well OK. At the end of the three months I got an email to say they still hadn't got the loan.
"(The money) just went in one door and out the other. I was never going to get it back."
She became suspicious after her monthly interest payments dwindled, sometimes appearing as random amounts in her bank account, other times not appearing at all, or on different dates.
"I feel stupid that I was sucked in really. We used to sit in my lounge right here and just chat, but all the while ... that's what really gets to me. He knew right from the very start what he'd done with the money, and that he could sit there and talk to me normally ... Could you do that? I couldn't do that, I'd feel guilty."
She began asking for her money back and was repeatedly assured by Ludwig that it would be returned.
Eventually Ludwig's net closed around him after another of his investors became suspicious and called the head of New Zealand Home Loans to complain.
The company hired a forensic accountant to inspect Ludwig's accounts and the matter was eventually referred to the Serious Fraud Office, and the police.
"He rang me one day, it was early in the morning, and said 'I've run out of money and I don't know what to do'. I said, well you better f...... find some because you owe me a lot.
"I feel stupid. Why did I let somebody do that? It's really embarrassing and I'm sick of thinking about this whole bloody thing."
She got her own lawyers involved, including a high-powered Queens Counsel, but was told the money was gone and Ludwig would never be able to repay it.
The Auckland District Court was told on Thursday that Ludwig had spent the money on his lifestyle-gambling, buying properties, and taking holidays.
Judge Rob Ronayne said Ludwig's motivations had simply been greed for a better lifestyle, "nothing more, nothing less".
"He squandered it, absolutely squandered it," the woman said.
"It wasn't until the s... hit the fan that I looked back at things and thought, well that probably wasn't right. I mean, how do you know?
"I felt like my stomach had hit the floor and I had to pick it back up and I was numb for a couple of days."
Due to the success of her family's business she says she's fortunate that it hasn't ruined her life, unlike some of Ludwig's investors who had given him their life savings and were left with nothing.
Still, she had gone back to work to ensure she had enough, and watches her money more closely than she ever thought she would need to.
She was gobsmacked after later discovering a request from Ludwig on LinkedIn, a business networking website for professionals.
"I thought, are you f...... kidding me? I mean really, does he have a conscience?
"A friend told me once don't trust a man in fancy shoes. Ian always used to wear patent leather shoes. So now I look at men's shoes."
The Financial Markets Authority's head of investor capability, Paul Gregory, said he couldn't comment on the case but advised potential investors to deal with local companies and check the business was licensed by the authority.
"Investment scams can happen to anyone and it can be hard to tell them apart from a genuine opportunity," he said.
"The promise of high returns for low risks should be a warning sign. Scams are also likely to be offered by someone you don't know, or when little or no information is offered in writing.
"People involved in scams can be very credible, with professional-looking websites. If you are told the offer is being made available to a select few and is a 'secret' then you should be very wary. This is likely to try to stop you speaking to a genuine adviser or the authorities."