While upholding eight years ten months imprisonment for Barry Edward Kloogh’s $15.7 million Ponzi fraud, the High Court overturned a five million dollar reparations order; Kloogh had no prospect of making any reparations and to order reparations only raised false hope for his victims, the court said.
Dunedin-based Kloogh was an authorised financial adviser. His local profile was heightened by involvement with local theatre. Victims were recruited by holding ‘free’ dinner seminars, followed up with one-on-one meetings offering tailored investment plans. It was all a con. The High Court was told Koogh never invested clients’ money as promised. Their money was stolen in a long-running Ponzi fraud. Money advanced by newer clients was used to pay fictitious investment returns to existing clients. Forged bank statements were shown to clients; keeping up the pretence of investments made on their behalf. When investigated by Serious Fraud Office, Kloogh admitted to stealing client money as far back as 1995. Money stolen was used to prop up businesses owned by Kloogh, pay lease payments on cars, make loans to family members and on holidays for himself and his wife.
At trial, Kloogh admitted to defrauding 81 victims of some $15.7 million. Many were elderly, losing their retirement savings. One terminally-ill client lost $630,000, money received from an early pay out on a life assurance policy.
After being charged, Kloogh met with many of his victims at restorative justice conferences. The vast majority of these victims considered Kloogh insincere and lacking insight into his offending, the High Court said.
Kloogh v. Serious Fraud Office – High Court (17.12.20)
21.017