A Half Moon Bay foreign exchange broker who defrauded his clients of more than $7 million has been sentenced to six years and three months’ imprisonment.
He is to serve a minimum period of imprisonment of two years and 11 months.
Kelvin Clive Wood (70) was sentenced yesterday (Wednesday, July 24) at the Auckland District Court on representative charges of ‘Obtaining by deception’ and ‘Theft by person in a special relationship’ brought by the Serious Fraud Office (SFO).
Wood created a Ponzi scheme after his foreign exchange brokerage began to suffer net trading losses, the SFO said in a media statement.
He used new investors’ funds to pay other investors their reported gains or to refund investment principal. None of Wood’s clients were aware that their funds were being used to repay other investors.
More than $7m of investment principal belonging to 18 investors was lost by the defendant over an eight-year period. The defendant knowingly reported fictitious profits and false or inaccurate foreign currency trades to investors.
The acting director of the SFO, Rajesh Chhana, said, “Mr Wood earned the trust of a group of investors through his personal and professional association with them. His breach of that trust is reflected in the sentence imposed today. The prosecution of such matters holds to account those who fail to conduct business in accordance with the expectations of a reputable market.”
The Financial Markets Authority referred the case to the SFO to investigate in May 2017.