The Serious Fraud Office (SFO) of New Zealand revealed this Friday that a foreign exchange (forex) trader has pleaded not guilty to defrauding his clients of more than $7 million in a Ponzi scheme.
On Thursday, at the Auckland District Court, Kelvin Clive Wood pleaded not guilty to two charges – ‘Obtaining by deception’ and ‘Theft by person in a special relationship’ – which were brought by the SFO.
The SFO, which is responsible for investigating and prosecuting serious or complex financial crime, alleges that the 69-year-old created a Ponzi scheme to offset the net trading losses of his forex brokerage.
In New Zealand, Wood operated forex and trading services through Forex (NZ) Limited and Forex NZ 2000 Limited. Customers gave him their money for fixed interest term deposits, buying foreign currency, forex trading, and general investment purposes.
Huobi DM Launches Real-Time Settlement for BTC FuturesGo to article >>
According to the charges, the SFO believes Wood was using the money from new investors to pay the gains owed to other investors. Furthermore, he was using the money to refund principal investment without the permission from the investors or their knowledge of his actions.
Case review hearing set for March 2019
The SFO said that it believes Wood managed to lose more than $7 million of investment principal which belonged to 18 investors over eight years. Following his not guilty plea, he has been remanded on bail, with a case review hearing set for March 20, 2019, at the Auckland District Court.
Established in 1990 under the Serious Fraud Office Act, the SFO is the leading law enforcement agency in the country for complex financial crime, which includes bribery and corruption.
The organization has two operational teams. The first is its evaluation and intelligence team and the second is its investigations team. The case was originally referred to the SFO for investigation by New Zealand’s Finance Markets Authority (FMA) in May 2017.