Already in jail following a Companies Act conviction when pleading guilty to fraud, Lance Jack Ryan succeeded in reducing the sentence for his part in the BlackfortFX Ponzi fraud from seven and a half years to six. This six year sentence is cumulative; it does not start running until his two year Companies Act sentence is finished.
Ryan was mastermind behind the BlackfortFX fraud. He has a long history of dishonesty. There are 56 convictions for dishonesty between 2000 and 2003 under a different name: Lance Jared Thompson. In late 2017, he was jailed following conviction for managing a company while prohibited from doing so. Three years previously, he set up a fictitious foreign exchange trading business, with co-offender Jimmie Kevin McNicholl. McNicholl fronted as the public face of the business. Ryan had to keep in the background. The Companies Office refused registration of any company with Ryan involved. Attempts to get a financial services provider certificate from the Financial Markets Authority had to be reformulated when the FMA refused to give any recognition to a business with Ryan at the helm.
The Court of Appeal was told that in reality Ryan was in charge of the planning, development and operations of Blackfort. It was a scam from the off. A professional website attracted investors. A cloud-based accounting system gave clients immediate access to their investment record. The only accurate data for each account was investor deposits; fictitious information about trading profits was later loaded onto customer pages. Blackfort is in liquidation. More than 900 investors put in a total of some $8.3 million. Losses are estimated at $4.4 million. Evidence was given that some investors were Christchurch earthquake victims, placing funds on deposit while they considered what to do with their insurance payouts. When investors began pressing for payment, unaware their money had been stolen, Ryan concocted false documents suggesting Blackfort funds were being wrongly withheld by a Swiss bank and that legal action for recovery was underway.
The Court of Appeal said sentencing principles require that when an offender, already in jail on unrelated charges, comes up for sentencing on new charges then the starting point is the appropriate overall sentence as if the offender had been sentenced on all charges at the same time; the so-called ‘principle of totality’. In Ryan’s circumstances, his subsequent jail term for fraud should be reduced to six years, the court ruled.
Ryan v. R. – Court of Appeal (14.12.18)
19.024