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NZ adviser accused of Ponzi scheme

A New Zealand-based financial adviser has been charged with masterminding a NZ$400 million Ponzi scheme, affecting as many as 1,200 consumers.

David Ross, principal of Ross Asset Management, had charges of false accounting and theft by person in special relationship in the Wellington District Court filed by the country’s corporate regulators on Thursday following an eight-month investigation.

“The joint investigation into Ross Asset Management (RAM) and related entities commenced in November last year after complaints were received regarding the delayed or non-payment of funds to investors,” said a statement from the New Zealand Serious Fraud Office.

“Following enquiries FMA undertook in October 2012, [Financial Markets Authority] took immediate action to preserve investors' funds by obtaining asset preservation orders and orders appointing receivers and managers to the Ross Group of entities.

“These orders were obtained under the Financial Advisers Act and remain in place. Initial inquiries by receivers showed investments of only $10.2 million actually existed.”

Ross Asset Management has reportedlt gone into receivership.