A 42-year-old former teacher has been charged with theft at Auckland District Court today after a Serious Fraud Office investigation.
Rene Alan Chalmers faces 15 charges relating to his foreign exchange trading activities and to three property purchases in 2011 and 2012.
Chalmers, who lived in United Arab Emirates from 2007 to 2011, received money from colleagues and acquaintances for investment in foreign exchange markets.
The SFO alleges that although investors believed they were giving Chalmers their money for the express purpose of forex trading, Chalmers was using investor funds for different purposes and reporting false gains to investors.
The SFO alleges Chalmers misappropriated about $837,046 for personal use and overstated investors' positions by about $4 million.
In May last year, Chalmers' company Chalmers Cameron Investments was placed in voluntary liquidation owing investors about US$5m (NZ$5.9m).
According to the liquidators' report, Chalmers said the company had faild because foreign exchange invsetments failed to produced expected returns, yet he continued to credit clients with the agreed return rate, even when making losses, in the hope that returns would improve.
Clients were mainly friends, family and word of mouth referrals, initially in the expat community in UAE.
The report lists about 40 creditors. Acting SFO chief executive Simon McArley said: "This case continues the current string of investment advisor and broker cases coming to our attention.
Those receiving money from others for investment need to be continually conscious of the need to use that money only for the purpose it was given to them and to be truthful when reporting to clients on the position of their investments."
Chalmers was remanded on bail and will reappear on 13 February.