Fraud victims lash out at David Ross

Ross sentenced to 10 years, 10 months

Last updated 13:57 15/11/2013
Fairfax NZ

David Ross Supporters Group Head Bruce Tichbon speaks after the convicted fraudster's sentencing.

David Ross
CHRIS SKELTON/Fairfax NZ
SENTENCING: David Ross learns his fate in court.

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The man responsible for the single biggest individual fraud in New Zealand's history has gone to jail for 10 years and 10 months.

Ross, 63, the former manager of Ross Asset Management, has pleaded guilty to five Serious Fraud Office charges.

They were false accounting and fraud and three from the Financial Markets Authority of providing a financial service when he was not registered to do so, made false or misleading statements to get authorisation as a financial adviser and supplying information to the authority that he knew to be false or misleading.

The SFO charges alleged Ross ran a Ponzi scheme, which he disguised by falsely reporting clients' investments.

Large portions of client portfolios were shown as invested through a non-existent broker 'Bevis Marks', resulting in a $380 million overstatement of investment positions.  

More than 1200 RAM (Ross Asset Management) client accounts had been affected by the scheme.

Wellington District Court judge Denys Barry ordered him to do a minimum non-parole period of half of the sentence, five years and five months.

He also made an order of reparation which would be sorted out by the receivers.

Judge Barry said Ross dealt with money that came in differently to how investors expected.

"You used the funding to repay the paper profits of other of your clients.''

He said Ross stole from people who trusted him with their life savings.

"It was an enormous web of increasingly complex deceit to maintain the illusion that you were a skilled and trusted benefactor,'' 

Judge Barry said the cold hard reality was Ross was a liar and thief on a scale unprecedented in New Zealand.

He said the raw hurt in the voices of the victims who had spoken in court was palpable.

The judge said they were not corporates or faceless entities but people who Ross had  worked at keeping their trust and money.

"Your hubris has wrought incalculable harm," he said.

He acknowledged that a prison term would do little to provide solace to the victims.

Judge Barry said he accepted there were no ill-gotten gains from the money.

Instead it seemed to be a twisted form of vanity that led Ross to offending, he said.

'MAY YOU ROT IN HELL'

‘‘I have never felt so devastated, empty, foolish and betrayed in my life,’’ a Ross Asset Management investor has told the man who lost his money.

‘‘May you rot in hell.’’

The investor, whose name was suppressed, was one of the victims who read out statements to the court at the sentencing of David Robert Gilmour Ross in Wellignton today.

Ross, 63, the former manager of Ross Asset Management, has pleaded guilty to five Serious Fraud Office charges.

Wellington District Court judge Denys Barry welcomed the victims to the sentencing and invited the four who had elected to read their victim impact statements.

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The investor told Ross to look him in the eye.

‘‘Show some guts,’’ he told the man in the dock.

He said he felt nothing but contempt and disgust for Ross.

He had invested hoping to later do things like help his son and daughter pay off student loans.  He had even advised them to invest themselves.

The investor said he could not believe it when he heard about the collapse and that Ross could not meet his financial obligations.

‘‘You are the worst sort of person, you gained my confidence and friendship all the while acting illegally and amorally.’’ Another victim said he had felt suicidal.

A third said they had invested the money to help leave a legacy for their 14-year-old autistic son who would need care for the rest of his life.

Ross victim Bev Nicholson, 51, said ''nothing was ever going to be long enough''.

''The only thing that would make me really happy is if they bring him out in a box. The rest of us are sentenced for the rest of our lives.''

Nicholson, a cleaner of 30 years living in Kingston, had little money in reserve and her future depended on the $170,000 she stood to gain from Ross Asset Management before the company collapsed.

Ross knew Nicholson's partner had recently died of cancer but he convinced her to keep money invested in his crooked scheme anyway.

She wanted to be in court to see him sentenced, where she would also have asked him to look her in the eye, but it was just another expense.

''He is a coward, and he is only sorry for himself.''

''He should die in there.''

'UNPRECEDENTED' OFFENDING

David Ross’s offending – losing over $115 million of his client’s money – was driven by his ego, the SFO has told the judge.

Prosecutor Kristy McDonald, QC, has told Wellington District Court judge Denys Barry that it was the most serious offending of its kind in New Zealand ‘‘Unprecedented in New Zealand, no fraud case comes close to it in magnitude or scale,’’ she said.

Mrs McDonald asked the judge to consider a starting point in sentence over 15 years jail and for a minimum non-parole period, which with a discount for pleading guilty should have an end sentence around 10 years and six months.

She said the offending took place over 12 years, had over 700 victims in New Zealand and overseas, and was not spur of the moment.

Mrs McDonald said any sentence of the FMA charges should be on top of the sentence imposed for the SFO charges.

She said it was the first time those type of FMA charges had been before the court and the harm to investor confidence could not be over estimated.

The ability to recover loss was limited, she told the judge.

ROSS SUFFERED TOO: DEFENCE

David Ross had now given the shirt off his back to help repay all he could to investors, his lawyer has said.

Ross' lawyer Gary Turkington said a deed has been executed with the receivers to allow all assets he has an interest in to be realised.

The Lower Hutt house - which has been for sale - is owned by a family trust but his half would go to the receivers.

Mr Turkington said he was not able to say what the final figure will be.

"It will be regretfully infinitesimally small compared with the losses the good people have suffered," he said.

He said it was often asked what Ross did with the money.

"It was a Ponzi scheme, money came in through the door was paid out to other investors on the basis of fictitious inflated portfolios."

The rest went on normal business expenses.

Mr Turkington said there were no hidden funds or assets offshore.

The latest report from receivers unable to find anything of significance, he told Judge Barry.

Mr Turkington then spoke about how Ross had been hospitalised himself suffering severe depression and being suicidal but after coming out of hospital was interviewed and later pleaded guilty to the charges.

He said it was acknowledged that what the victims had suffered was profound and Ross was truly sorry.

"He wishes he could turn back time."

He said Ross wanted to write to the investors and explain how he felt the situation happened but because of court orders was prevented from contacting him.

He read out a letter that Ross had wanted to send out.

"I only wish this had never happened to you," it said.

Mr Turkington had asked for a discount for Ross' guilty plea which resulted in several victims calling out from the back of the court.

Judge Barry said he understood emotions were high but asked them to give the same courtesy to the defence counsel that they had when they were quiet for the SFO prosecutor.

The judge has begun sentencing.

- The Dominion Post

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