The $50m swindler: I confess

Malcolm Mayer, a New Zealand representative bridge player, sips on a cup of instant coffee and admits to his part in a $50 million loans scam.

In an extraordinary interview with the Sunday Star-Times yesterday, the 53-year-old property developer casually described how he helped arrange a scheme whereby relatives and associates, including immigrants with virtually no money to their names, were used to secure up to $50m in loans from fund management company Trustees Executors Ltd (TEL). At least $33m of the loans, funded by the Tower insurance mortgage fund which TEL administered, have defaulted.

Mayer is being pursued by the Serious Fraud Office and has come clean publicly to save his family from further distress; he says his sister-in-law has already been "interrogated" by the SFO. "I don't want them to compromise themselves in order to protect me; they are honourable people," he said. "They just got caught up in my passion."

Mayer says that tomorrow or on Tuesday he plans to visit the SFO, which was called in by TEL, and admit to everything. He describes his actions as "crimes of omission" and that he did not realise at the time that it was anything "significant". He believes everything would have been fine, were it not for the world financial crisis. "No one envisaged an economic World War III."

Mayer acknowledges that he will probably face criminal charges, but insists he is an honest man.

Mayer's main goal is to sell his remaining properties and use any leftover funds to benefit the more than 5000 "mum and dad" investors who were left in limbo when TEL froze the $242m Tower Mortgage-Plus fund last year. "I never meant to hurt anybody," he said.

For several years from 2000, Mayer says he was TEL's "golden boy". Its chairman is former prime minister Jim Bolger and it is New Zealand's oldest trustee company, having acted as corporate trustee for a number of failed finance companies, as well as KiwiSaver schemes.

"They probably wouldn't admit it now, but it was pretty clear I had a very warm and close relationship with them. I was their person in Auckland. If they wanted an opinion on properties, I would go out and give them an opinion for no consultation fee." Mayer estimated he did about $20m worth of business with them, before "things turned pear-shaped".

Mayer then began doing property deals involving architect-developer Simon Turnbull. The Star-Times revealed earlier this year how Turnbull used the names of his elderly parents and his wife's family, including her penniless 73-year-old Portuguese mother, Maria de Magalhaes, to secure loans from TEL which subsequently defaulted. Mayer says he too was involved in the majority of those loans.

Mayer said multimillion-dollar loans were also given to three of Magalhaes's grandchildren, one just 19 years old.

Most of those loans have defaulted and TEL has bankrupted several Magalhaes family members.

Turnbull, who lived the high life, including buying "his and hers" Aston Martin cars, has left the country.

"No one knows where he is," Mayer said. "At one point he was trying to do business between Hong Kong and Siberia."

Mayer secured another $14m-$18m in loans from TEL for his own "basket" of properties. TEL had a policy of lending no more than $4m to one entity, and because of that and for tax reasons, Mayer set up family members and employees, including his Filipino ex-wife's two sisters and two Chinese immigrants, as trustees of properties of which he was the beneficial owner.

He then set up deals where properties would be sold to Turnbull entities, using TEL funds. TEL thought they were cash deals but what it did not know was that Mayer and Turnbull had made arrangements for delayed payments, which meant that, in effect, TEL was putting up most of the money.