A private investigator, a respected JP, secret recordings and allegations of a “fake” investment contract involving $1 million in Bitcoin. Lane Nichols reports on the $100,000 scam.
A respected Justice of the Peace has been caught on a secret recording admitting his bank account has been frozen due to “suspicious activity” after he allegedly received $100,000 in stolen money linked to a cunning investment scam.
The victim believed he was sending the money to international banking giant BNP Paribas to invest in government-backed bonds in the Commonwealth Bank of Australia.
He was shocked to learn he had been caught in an elaborate ruse involving international criminals and the money had actually been deposited into the account of an Auckland JP, accountant and company director.
The victim - a North Shore businessman who the Herald has agreed not to name - contacted police, but also hired private investigator Nick Mayer to track his stolen money and try to negotiate its return.
Mayer traced the cash from the victim’s ASB account to a BNZ account under the name of a New Zealand-registered company of which the JP is the sole director and shareholder.
Mayer then travelled to the JP’s home - which had several European cars parked in the driveway - to confront him about the scam and his alleged involvement last month.
In a covert recording of that meeting obtained by the Herald, the JP claims he did not know the money was stolen and insists he has done nothing wrong.
When presented with evidence implicating him in the fraud, the JP produced what Mayer believes is a fake investment contract with the victim’s forged signature and copy of his passport.
The contract - seen by the Herald and containing several grammatical errors - states the JP and victim are “co-investors”, and that up to $1m is to be deposited into the JP’s account in “tranches” to purchase cryptocurrency.
Asked if he is willing to reimburse the victim to avoid police involvement, the JP says he can’t because the money has already been moved to an electronic wallet to purchase Bitcoin.
“I don’t have the money.
“I can, in all honesty and sincerity, explain to you that I am not involved.”
However, the victim says he has never met the JP, has never seen or signed the contract, and he’s adamant the document is fraudulent.
He’d planned to use proceeds from the “low-risk” bond investment to pay for his son’s upcoming wedding.
Learning he had been duped was financially and emotionally devastating.
“I couldn’t sleep. I was lost.
“The emotions of losing such a big amount, it’s not easy. I felt quite low for a couple of days.”
In the recording, the JP admits he has never met or spoken to the victim, but insists they jointly entered into the investment contract in May and claims the agreement was arranged by third parties in Australia linked to an “associate company”.
He blames a rogue “agent” for the victim’s apparent loss and says the individual is now under investigation by company officials.
The JP also claims that BNZ has frozen his account due to “suspicious activity”.
“They closed my account because some client put some money into it, which I knew nothing about.”
He maintains he is a legitimate businessman, claiming the contract is evidence as to why the victim’s money landed in his account.
Speaking to the Herald, the JP said he was “not party to any scam”, and reiterated that he had a “legitimate” contract with the victim sent from associates in Australia.
When the Herald questioned the contract’s legitimacy given claims it was fraudulent, the JP said: “That’s a matter of opinion and you’re entitled to your opinion.”
He said his BNZ account remained frozen and he was not aware of any police involvement.
“I’ll face that when they approach me, but I’ve had no connection whatsoever.”
He then hung up.
Mayer said the JP’s story doesn’t stack up. He’s adamant in his belief the man is party to the deception and has now handed a dossier of evidence to police, who have enlisted help from international law enforcement agencies through Interpol.
“As far as I’m concerned, he’s a willing mule and he’s deeply involved,” Mayer believed.
In his opinion: “Having [the victim’s] passport, that just puts him right in the limelight.”
Police confirmed they were “following positive lines of enquiry” to locate those responsible and liaising with a number of organisations.
“We have also engaged with our overseas counterparts as we continue to investigate the matter.”
The victim was cold-called earlier this year by a man with an English accent calling himself Iain Martin, who claimed to be the Wellington-based head of securities services for global financial services giant BNP Paribas.
He appeared to be using an 04 area code number, and prospectus information about the investment opportunity listed his business address as 1 Willis St, central Wellington.
A man by the same name is listed on LinkedIn as being a BNP Paribas employee, but is thought to have had his identity stolen.
The victim says the scammers are skilled con artists and “very believable”.
“The way they talk - they win your trust in a couple of minutes, and once they earn your trust, the job becomes very easy for them.
“It was quite well done, I don’t mind admitting it.”
The victim was convinced to invest $100,000 at 9 per cent interest, believing the bonds were backed by the Australian government.
After sending personal identification and a copy of his passport - supposedly to satisfy anti-money laundering obligations - the victim was told to split the payment into two $50,000 cash transfers and sent payment instructions, including a reference code and recipient bank account details for BNZ.
He made the two payments online on June 7 and 9 - adding “BNP Paribas” in the payee field - then received log-in details to an online “client portal” where he could see his investment and monitor its growth.
Nearly six weeks later, he received a call from another Englishman warning his investment was at risk, and he needed to pay up to $50,000 to an asset recovery company that would then attempt to recoup his money.
“He told me, ‘If you don’t give me the money, you’re going to lose everything’.”
The victim - who recently underwent coronary surgery - contacted the man claiming to be “Iain Martin”, who vouched for the other Englishman’s credentials but assured him his money was safe.
The scammers then cut contact and the client portal was deactivated. The victim went to police on July 20 and contacted ASB.
The Herald has learned BNP Paribas posted a warning on its website about “fraudulent attempts to impersonate BNP Paribas staff and websites in Australia and NZ” on June 1 - one week before the victim’s initial cash transfer.
The Financial Markets Authority posted its own warning in September last year, plus an additional warning titled “BNP Paribas fake bond offer” on June 9 - the day of the victim’s final payment.
The victim believes ASB should have been “on notice” about the scam, given multiple public warnings had been issued and the “BNP Paribas” payee reference on both money transfers.
He also claims the transfers should also have been flagged as suspicious as they were large compared to his usual transacting history and because a supposed BNP Paribas investment was going to a BNZ account.
The Herald put these questions to ASB, which responded: “There was nothing about these transactions that indicates the intended recipient was BNP Paribas.”
The bank said there was nothing suspicious about either transaction. ASB did not require customers to enter a name for the receiving account when making online money transfers, only an account number.
“This payee name is for the customer’s reference only and is not used by our system when processing a transaction, or as a field for communicating information between banks.”
Given multiple warnings had been issued about a BNP Paribas scam prior to the victim losing his money, the Herald asked whether ASB’s fraud detection systems had the capability to check if payee names entered by customers corresponded with known scams.
ASB did not respond.
The victim was shocked to learn his stolen money had landed in an account belonging to a respected JP.
The man’s explanation did not make sense, and the victim questioned how he came to have a copy of his passport, which had been sent to the scammers.
“I think he’s a conman, I think he’s part of it.”
Mayer told the Herald his initial priority was to “strike a deal” to recover the money when he confronted the JP at his house.
In a secret recording of the conversation, Mayer tells the JP stolen money has been paid into his account.
“I’ve come here to see if we can resolve this,” Mayer says.
The JP says he has no knowledge of stolen money, but has a contract with Mayer’s client to invest the money in Bitcoin, despite having never met his “co-investor”.
He confirms BNZ has suspended his account.
“The bank said, ‘There has been some suspicious activity on your account and your funds have been frozen’.”
Mayer warns the JP police have been contacted and he could face criminal charges.
“We have a problem here that there’s $100,000 that you’ve received fraudulently. If we can get the money back, he will withdraw the police complaint. Nothing further will happen to you. If you can’t return the funds because you’ve moved it on already, then we will pursue it.”
The JP reiterates that he has a contract with the victim and is not involved in any illegal activity.
“I don’t even know your client.”
Mayer tells the JP the contract is fraudulent and he is clearly implicated.
“Why have you got my client’s details and passport?” Mayer asks.
“It was sent to me by the company in Australia that handles investments,” the JP responds.
“So where’s the $100,000 worth of Bitcoin?” Mayer demands.
“It’s gone into his Bitcoin wallet,” the JP says.
Mayer tells the JP his client has no access to the wallet.
“He’s got nothing.”
The JP shows Mayer a copy of the investment contract, and Mayer says in his opinion, the victim’s signature is obviously a bad forgery.
“This isn’t going to work,” Mayer says.
“I was a detective in the fraud squad. I’m going to tell you right now, based on what I know and what I’ve seen, you’re going to be arrested for money laundering and, if not, party to the obtains by deception charge. Because that’s all fraudulent. You’ve done no due diligence whatsoever.
“I’ve got no doubt in my mind you’re part of the scam, so the option you have today is: return the money and my client will withdraw his police complaint.
“All he wants to do is get away from this horrible situation.”
The JP says he no longer has the money and has “nothing to hide”.
Mayer then leaves the property, but phones the JP days later in a final attempt to negotiate.
In a recording of that call, the JP says the Australian company is investigating the matter because “we just feel something funny’s happening there”.
He reiterates that he’s had “no connection” with Mayer’s client and has “never been in contact with a crime”.
“Whoever he sent his passport to and his details to are the people you should be contacting, not me.”
Mayer tells the JP he can’t hide behind a fake contract.
“I know you think you’re covered by this, but you’re absolutely not.
“The banks have frozen your accounts. They think you’re a fraudster ... So really I’m disappointed you didn’t just get rid of me by getting my client’s money back.”
“I can’t do that because I don’t have it,” the JP says.
“When I get the information I’ll come back to you, but you’re just wasting my time and your time.”
The conversation ends.
Lane Nichols is a senior journalist and deputy head of news based in Auckland. Before joining the Herald in 2012, he spent a decade at Wellington’s Dominion Post and Nelson Mail.