"Cargo cult" mentality earns adviser four years in jail

Former investment adviser Arch Williams has been sentenced to four years in jail for ripping off elderly clients to the tune of nearly half a million dollars.

Thursday, March 25th 1999, 12:00AM

Former investment adviser Arch Williams has been sentenced to four years in jail for ripping off elderly clients to the tune of nearly half a million dollars.
A jury at the District Court in Auckland found Arch (Archwell) Williams guilty on 13 charges of theft by misappropriation, using a document to obtain pecuniary advantage and a charge of theft when required to account. All carry a maximum penalty of seven years - he got four.
In sentencing Judge Hubble said Williams had resorted to a number of "calculated deceits" to extract money totalling $480,000 from his mainly elderly clientele - attracted by expectations of huge overseas profits.

Williams had told clients he was investing their money offshore in "prime bank instruments" which were safe and would deliver high returns, however he was using client money to earn significant commissions from brokering trades in these instruments. These deals failed to materialise and Williams was bankrupted owing Telecom around quarter of a million dollars.
Judge Hubble said Williams had expended thousands on Telecom in pursuit of a dream that over some three and a half years had yielded not a cent.
He accepted that in his own mind Williams had intended to repay but that this was a "totally unrealistic expectation" and that he'd adhered to a "cargo cult belief" that there was a prize overseas that could be won without effort.
Williams' lawyer pleaded some mitigation for "reparation" of $129,000 to two of his clientele. However, the judge described this as robbing Peter to pay Paul, as the money was from a relative who had probably not intended that it be lost and had been used to pay back the two clients who had complained most bitterly about the lack of result from their investment.
Counsel also noted that while Williams was a financial adviser he was neither a lawyer nor an accountant that would have represented a higher watermark in term of abuse of trust.
Judge Hubble says all 10 complainants were elderly, vulnerable people who had little chance of recouping investment losses, in some cases up to $90,000, through earnings. He said that it couldn't be dismissed as being just money that was lost, but retirement funding that could not now be replaced.
Williams had misused his position as a trusted financial adviser to persuade them to take their money from other investments to invest with him.
Although none of the complainants claimed to have had their lives completely devastated, the full impact may be yet to come. In mitigation the judge noted that Williams was a family man with five children, no previous convictions and that he had not defrauded without hope of repayment..."you earnestly believed you would make money and be congratulated on your investment," but this was a "forlorn hope" from a scheme that was" little more than a con".
Williams had pleaded not guilty, and written a belated letter of remorse on the day before sentencing.

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