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SOCIETY FOR PROMOTION OF COMMUNITY STANDARDS INC.

Thames man pleads guilty to defrauding Queensland health department of A$16.6 million (NZ$20.91)

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A former Thames man who fleeced A$16.6 million ($20.91m) from Queensland taxpayers forged documents carrying the health minister’s name, a court has been told.

A sentencing hearing for Hohepa Morehu-Barlow, also know as Joel, has also been told he had previously faced court for stealing from an employer in New Zealand.

[Source: AAP – Stuff News report 19 March 2012]

The 37-year-old pleaded guilty in the Brisbane District Court today to eight offences including aggravated fraud as an employee, forgery, uttering a forged document and possessing drugs.

The charges relate to him defrauding the Queensland health department of millions of dollars when he worked there between 2007 and 2011.

He ripped off taxpayers while pretending to be a Tahitian prince, and led an extravagant lifestyle while showering lavish gifts on friends and colleagues.

Prosecutor Todd Fuller SC told the court Morehu-Barlow had previously appeared in court for stealing from an employer across the Tasman.

In 1999, he received an eight-month non-residential sentence in New Zealand for a charge of stealing around $32,000 as a servant.

He received a similar sentence at the same time for using a document for fraudulent advantage.

No details were given as to the identity of his employer at the time.

Fuller said the offending was in a similar vein to his latest offences, which involved him approving payments from Queensland Health.

Most payments were siphoned from a special minister’s fund that was designed to provide revenue to charities.

Morehu-Barlow forged a document purporting to be from former health minister Paul Lucas approving a charitable grant, and then transferred the cash to himself, the court heard.

He also used other official documents for his own fraudulent activity.

The fraudulent transactions increased in size until he approved an A$11 million payment to himself, which had purportedly been approved for a university dental scheme.

The hearing continues.

Source: AAP dated 19 March 2013

See: Thames man admits Queensland health service fraud

http://www.stuff.co.nz/waikato-times/news/8445189/Thames-man-admits-Queensland-health-service-fraud

$4 million lost to scams last year – Report by Ministry of Business, Innovation and Employment

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Figures released by a Ministry of Business, Innovation and Employment-led consumer fraud working group [0n 22 February 2013] show Kiwis lost close to four million dollars to scams last year.

Out of the 4204 reports last year, 727 people lost money ? an average of $5,464.55 per person. Many people reported losing significantly more.

MBIE’s Scamwatch spokesperson Jarrod Rendle said losses reported by members of the public rose by more than $1.7 million between 2011 and 2012, despite 1309 fewer scams being reported.

This is in part due to a marked increase in losses to investment-related scams.

“Losses to investment-related scams such as boiler room fraud rose by 77 per cent last year. People that fall prey to investment scams can lose very large sums of money – with three people losing more than $150,000 each.”

The group also saw a large increase in the amount lost to dating scams – more than $2.2m in losses compared to $900,000 in 2011.

NetSafe’s Lee Chisholm says, “These scams can see the victims emotionally devastated and lose their life’s savings. Fraudsters usually befriend vulnerable people online and later claim to urgently need large sums of money for an overseas financial emergency. Three people lost over $100,000 each last year.”

The group’s report shows a 23 per cent drop in the amount lost to phishing. Losses to scams that trick people into thinking that they have a virus on their computer also dropped by 67 per cent.

Reported Scams [Nos] … 2,860 (2010); 5,514 (2011); 4,205 (2012)

Reported loss [$]

1,772,984,97 (2010); 2,271,677.05 (2011); 3,972,734.86 (2013)

Report released 22 February 2013

http://www.consumeraffairs.govt.nz/scam-news/4-million-lost-to-scams

Children’s Television watching linked to criminal activity by researchers

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Children who spend hours watching television after school are more likely to become criminals, researchers say.

A University of Otago study found the risk of having a criminal conviction by early adulthood increased by about 30 per cent with every hour children and teens spent watching TV on an average weeknight, co-author Associate Professor Bob Hancox said.

See: Fairfax NZ News Report by Bronwyn Torrie: http://www.stuff.co.nz/technology/digital-living/8320462/TV-watching-linked-to-criminal-activity

Watching more television in childhood was also associated with aggressive personality traits, an increased tendency to experience negative emotions, and an increased risk of antisocial personality disorder in adulthood.

“While we’re not saying that television causes all antisocial behaviour, our findings do suggest that reducing TV viewing could go some way towards reducing rates of antisocial behaviour in society,” said Dr Hancox, of the Department of Preventive and Social Medicine.

The American Academy of Pediatrics recommends children watch no more than one to two hours of quality television programming each day.

University of Canterbury sociology professor Greg Newbold said bad parenting, rather than excessive television watching, caused children to become criminals.

“The primary factor, I think, will be the fact that kids who are allowed to watch lots and lots of television have parents who do not play a very active role in their lives. Bad parenting and television are linked and criminality is a consequence of that.”

The study, Childhood and adolescent television viewing and antisocial behaviour in early adulthood, was published in the United States journal Pediatrics yesterday.

The research is another strand of the longitudinal study into a group of about 1000 children born in Dunedin in 1972-73. Every two years between the ages of 5 and 15, they were asked how much television they watched. They were then tracked until they were 26.

It is believed to be the first “real-life” study following television viewing throughout childhood, and then looking at a range of antisocial outcomes.

Study co-author Lindsay Robertson said children who watched more television were not antisocial in their younger years. “Rather, children who watched a lot of television were likely to go on to manifest antisocial behaviour and personality traits.”

This was not explained by socio-economic status, IQ, antisocial behaviour in early childhood, or lack of parental control.

As an observational study, it cannot prove that watching too much television caused the antisocial outcomes, but the findings are consistent with other research and provide further evidence that excessive television viewing can have long-term consequences for behaviour, Ms Robertson said.

Dr Hancox said a limitation of the study was the lack of information on the type of programmes the children had watched. “We can’t tell if it was a particular type of programme or just the fact they were watching TV at all.”

The question was whether the content contributed to violent and antisocial behaviour later in life, or whether the amount of time spent watching television meant children did not develop pro-social behaviour and life skills, he said.

But there was enough evidence to come to a conclusion backed by other studies.

“Children who watch violent TV behave in a violent way afterwards and people who watch a lot of TV are more likely to have bad behaviour later in life.”

SCREEN SHOTS

Excessive television viewing in younger years is associated with increased antisocial behaviour in adulthood.

The link between television viewing and antisocial behaviour in adulthood was similar for boys and girls.

However, antisocial outcomes were less common in women.

The connection between television viewing and violent convictions were not significant after controlling for other factors.

Source: Fairfax NZ News

See: http://www.stuff.co.nz/technology/digital-living/8320462/TV-watching-linked-to-criminal-activity

David Ross stripped of Institute of Accountants (ICA) membership

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Wellington’s David Ross, at the centre of the collapse of a suspected Ponzi scheme involving about $450 million, has been stripped of his membership of the Institute of Chartered Accountants (ICA), for now.

Under an “interim suspension”, David Robert Gilmour Ross lost his institute membership after a hearing held in secret in the middle of last month. The suspension was announced by the ICA disciplinary tribunal yesterday.

Financial Markets Authority (FMA) staff raided Ross’ offices on The Terrace late last year after investors complained they could not get their money.

Receivers have been able to locate only about $11m of the almost $450m some 900 investors believed was being managed on their behalf by Ross Asset Management Ltd (RAM) [Co. No  455971. Formerly called Quill Investments Ltd].

Last month the first disciplinary action was taken against Ross, with the FMA suspending his licence as an authorised financial adviser for six months as it continues to investigate possible Securities Act breaches.

After the FMA action, the ICA said matters identified by RAM’s receivers warranted a complaint to the professional conduct committee from the institute’s chief executive, which led to the interim suspension.

Ultimately, the institute’s disciplinary tribunal has the power to strike off Ross as a chartered accountant.

Bruce Tichbon, spokesman for the Ross Asset Management Investors Group, said they had expected the suspension.

Tichbon said knowing Ross was a chartered accountant had given him confidence in Ross.

“It gave him an aura of professional respectability,” he said.

Tichbon said other members of the investor group had asked him to pursue whether Ross’ status as an accountant required auditing by the institute.

“I have been informed there were certain burdens on the accounting professional bodies to test the veracity of his services and therefore there was likely to be some grounds for claim there,” Tichbon said, though he had not confirmed that.

The institute carries out a regular review of accountants who hold a certificate of public practice, but it would not comment directly on Ross’ professional conduct. Only members of the institute can call themselves chartered accountants, which means they have certain qualifications and experience.

Meanwhile, Tichbon said regulations relating to apparent Ponzi schemes seemed to be “virtually non-existent”.

“The lack of legal clarity is a serious and cruel issue,” he said, because there was no case law for apparent Ponzi schemes.

Hundreds of investors were left totally up in the air. There were no clear guidelines on how the case should be managed – for example, whether money could be clawed back from some investors who had earlier taken money out. Earlier reports from the receivers showed that since 2000 just over $303m had been invested through the firm, while $29.8m was taken out in fees, and investors withdrew $289m.

“People are really suffering terribly,” Tichbon said, with some investors suffering from depression.

“Instead of a [regulatory] ambulance at the bottom of the cliff, there is a cesspit of broken glass and alligators.”

Source:

Report by James Weir, Fairfax NZ News. 17/01/13

http://www.stuff.co.nz/business/money/8186916/Ross-stripped-of-ICA-membership

Earlier reports:

1. SFO begins probe into David Ross, asset management firm, 19/11/12

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=10848504

2. Report by Jonathan Underhill, National Business Review. 04/12/12

http://www.nbr.co.nz/article/ross-asset-investors-face-gruesome-legal-fight-if-ponzi-scheme-shown-bd-133420

3. Report by Hamish Rutherford, Fairfax NZ News. 17/12/12

http://www.stuff.co.nz/business/industries/8090115/Ross-Asset-Management-liquidated

Securities Commissioner told of Ross Asset Management Ponzi scheme concerns but took no action

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The Securities Commission appears to have been warned about suspected Ponzi scheme operator David Ross three years ago, but took no action. [David Ross was sole director of failed Ross Asset Management Ltd]

An email obtained through the Official Information Act shows Securities Commissioner Annabel Cotton was told of concerns about Ross in September 2009.

At the time, Ms Cotton had a special role as commissioner for financial advisers, responsible for developing a code of conduct for the financial advisory industry.

The email reads:

“Has anyone every [sic] looked into the activities of David Ross funds management? He doesn’t ad [sic] up to me and I could explain why verbally if you wished.”

The name of the sender was redacted from the OIA document, although it is understood the sender was a professional investor.

Ms Cotton said she had forwarded the email from her personal address to her Securities Commission address so that she could discuss it with commission staff when she was next in the office, “and to the best of my knowledge that’s what I would have done”.

“What happened from there I don’t know. I would have left it with a senior staff to work things from there and decide what to do.”

The Dominion Post has learnt of another individual who claimed he contacted Ms Cotton verbally about Ross, before September 2009.

The person, who asked not to be named, said he was told the commission was too busy to look into his concerns.

“I remember Annabel’s words exactly,” he said. “[She said] ‘I hope you’re not right’.”

Ms Cotton, who owns investor relations consultancy Merlin, said she had no recollection of the conversation.

The Financial Markets Authority, successor to the Securities Commission, licensed Ross as an authorised financial adviser in July last year.

Ross’s Wellington offices were raided by the FMA on October 31 after it received client complaints on October 25.

Receivers appointed to Ross companies by the High Court have found assets totalling $11.5 million, a significant shortfall on client accounts purporting to be worth $449.6m.

The Serious Fraud Office is investigating.

Source:

http://www.stuff.co.nz/business/money/8072464/Commissioner-told-of-Ponzi-scheme-concerns

The Dominion Post, Thursday, December 13, 2012, p. A3

Further Reading:

Ross Asset Investors may face ‘gruesome legal fight’

The National Business Review, Tuesday 4 December, 2012

http://www.nbr.co.nz/article/ross-asset-investors-face-gruesome-legal-fight-if-ponzi-scheme-shown-bd-133420