Scammer wanted cash to wash money

00:12, Sep 11 2012
money laundering
MONEY LAUNDERING: Scam victim was shown a large sum of money and told it needed to be washed (literally, not laundered).

A friendship founded on motocross has foundered amid court action over who was responsible for sending nearly half a million dollars to international scammers.

Joanne Donaldson, of Hanmer Springs, and David Craig, of Whitianga, locked horns in the High Court over $450,000 sent to the Swiss, South African, Malaysian and Ivory Coast bank accounts of no fewer than three Nigerian-style con artists.

Craig, who contributed $421,605 of the funds lost offshore, sought to have this sum ruled a loan repayable by Donaldson, but Justice Fogarty, in the High court in Christchurch, ruled all but a small sum was lost to the frauds and could not be claimed.

The pair became friends over a shared love of motocross, and in mid-2006 Donaldson told Craig about a Zimbabwean family she was corresponding with by email who claimed to be refugees living in South Africa.

Donaldson said the Zimbabwean family, the Mayos, had managed to transfer US$10.7 million (NZ$13.2m) into a Zimbabwean bank before fleeing Robert Mugabe's regime, but needed funds to access it.

Justice Fogarty said the regular quotation of Christian scriptures in the correspondence by the Zimbabwean family had sucked Donaldson in.


"The defendant genuinely believed their story," he said.

Donaldson flew to South Africa with $7320 of Craig's money to pay for "legal fees".

After meeting with people claiming to be the Mayos' lawyer and bank manager, she signed a series of documents.

Justice Fogarty said this paperwork seemed to signify the success of the transaction, for which Donaldson expected to received 30 per cent of the frozen millions.

"She was told the funds had been released,'' he said. ''The Mayos celebrated with Champagne at her hotel."

But the funds were not released and were instead followed by repeated and escalating demands for money, culminating with a September 2006 request for US$189,000.

"The plaintiff and the defendant talked through the night as to whether it should be paid," the ruling said

Craig wired the requested sum to a private bank in Switzerland the following day.

Meanwhile, Donaldson began corresponding with two more international scammers, including another claimed Zimbabwean refugee, this time living in Edinburgh and claiming to have US$3.4m.

More sums were paid and Donaldson flew to London in March 2007 to release the funds. On arrival, she was told to go to Spain, where the money had been transferred.

"She flew to Madrid. She was met and shown a large sum of money in a container. She was told the money needed to be washed (literally, not laundered) and a further sum of money had to be paid for this," Justice Fogarty said.

"It was then that reality hit her. She realised this could only be a scam.

''This was the same pattern as in South Africa. She was continually being promised that funds were to be released on a payment and they were not, and she was always being asked for further money."

Justice Fogarty ruled that, outside the initial payment of $7230, the payments by Craig to the scammers were not loans to Donaldson and repayment could not be enforced.

Analysing the largest payments to the Mayo family, Justice Fogarty ruled: "It is more probably than not that the reason [Craig] paid these last two and largest sums what that he was caught in the classic dilemma, from time immemorial, of facing realising a loss or expending more money in the hope of recovering all."

After five years of losses and legal actions, Justice Fogarty noted, the relationship between Craig and Donaldson had cooled.

"The loss was so painful to both parties that the friendship came to an end, fortunately not by way of confrontation, but it simply became impossible for the parties to talk to each other," he said.