SFO probes US lender over missing millions
The Serious Fraud Office is probing a foreign loan provider which charged hefty advance fees for loans that were never delivered.
Transactions involving United States-based Brockstar made an appearance in the SFO's successful conviction of Ponzi fraudster Jacqui Bradley and her B'On scheme, and form part of the SFO's prosecution of the directors of Derivatek and Global Futures Trading.
Total losses to investors in these cases exceed $17 million.
In each case, US$1.3m of investors' funds was sent to Brockstar in 2008 on the promise of loan packages exceeding $20m.
But no financing was delivered and the advance fees were never returned.
Brockstar, run by Californian man Brian Willis, has been the subject of numerous complaints by investors. An Orange County Superior Court judge last month awarded an investor US$837,000 following a civil suit and described Brockstar's loan business as a "classic con game".
Willis said he was appealing the judgment and blamed the collapse of the New Zealand loans on third parties and the global financial crisis.
In Auckland District Court, Bradley's failed defence of fraud charges hinged largely on the Brockstar loan as evidence that funding was in the works to repay all investors.
Bradley last month was sentenced to seven years and five months in prison after being found guilty of 71 counts of fraud.
Willis rejected any suggestions of impropriety by him or his company and said in an emailed statement: "Brockstar has suffered an immense hoard [sic] of false and erroneous accusations and has been used as an escape goat [sic] for others misgivings and failures."
SFO acting chief executive Simon McArley said his office was keeping tabs on Willis and a decision to open a formal investigation was pending.
"We are aware that transactions with Brockstar have been a feature of a number of recent investigations and prosecutions," he said.
McArley said his office would be liaising with counterparts in the US and further abroad to overcome any possible jurisdictional issues in a push to tackle the drivers of economic crime.
"If Brockstar falls into that category we are keen to do whatever we can to address that," he said.
According to filings in US courts, Willis is a university dropout who cut his teeth in the business world by selling bottled water.
He lives in California with his Ukrainian-born and bankrupt wife, Snizhana Willis, 27 years his junior.
The couple have made claims of lavish living on various websites.
Brian Willis has stated: "I am a collector of fine art, coins and
antiquities and own a private collection valued in excess of several million dollars."
On a website promoting Snizhana's work as a "super model", it is claimed she enjoys "buying very expensive real estate, collecting extremely rare and super expensive cars, beautiful antique, Swarovski crystals, porcelain dolls, furniture, living in a lavish lifestyle and being a really nice and beautiful human being at heart who believes in God".
The couple have enrolled online to gain the titles of "prince" and "princess" of the "Kongo".
Until challenged in 2010 over the legitimacy of his knighthood, Willis described himself as "Sir Brian Willis", on the basis of a title awarded by a Spanish website.
According to court transcripts, Orange County Superior Court Judge David Chaffee said, when making his ruling, that Willis had presented himself as "the giant wheel of the finance scheme on a worldwide basis, and the guy talks the talk and walks the walk, at least in terms of outward appearance, although, I think on the evidence presented in trial is something significantly different".
The judge said no evidence had been presented by Willis that the promised loans, delivery of which was constantly delayed with excuses, ever existed.
He also criticised Willis's lack of financial accreditation.
"I believe that Mr Willis should have and must indeed register with the securities and exchange commission and with the California securities regulators, something that he did not do and should have," he said.
According to filings in the Orange County Superior Court, Willis intends to appeal the findings by Chaffee that Brockstar had committed fraud and violated state and federal securities laws.
Following the Orange County Court judgment, Brockstar's website went down, and reference to the company vanished from Willis's online resumes.
Willis said the recent changes were due to Brockstar reorganising itself to focus more on gold mining.
Willis is behind an online push to raise capital or sell the Fallon Mining Company, a Nevada-based minerals prospector.
Documents distributed by Willis in 2010 claim the mine sits atop mineral reserves valued at US$290 billion.
The Fallon claims have been criticised in a separate US criminal case, in which Willis is not a defendant. A Kansas City-based company raised millions from investors for a company claiming billions in mineral worth the prosecution said was nonexistent.
Matt Schumaker, chief mineral examiner with the US Department of Interior, said in an affidavit filed for the prosecution: "It has been my opinion since that time that the project proposed by Fallon Mining Company is not viable and can never be viable. FMC has utilised the services of at least three incompetent or fraudulent assayers with whom I am familiar."
Willis did not directly respond to questions about Schumaker's criticism of Fallon, but said the gold mining venture was "meant only for the interest of serious private investors familiar and knowledgeable with the gold mining industry".