Kloogh investors told they will only get 2c in the $1 back

Investors who invested in Barry Kloogh’s Ponzi scheme have been told they can expect to only get about 2c in the dollar back.

Wednesday, September 20th 2023, 12:09PM

Kloogh was sentenced to eight years and 10 months’ jail in July 2020.

He admitted 11 representative charges, including obtaining by deception, forgery, theft by a person in a special relationship and issuing false statements. Investors had about $16 million in the scheme.

His firm, Financial Planning Ltd, and Impact Enterprises Ltd, were placed into liquidation in 2019.

The latest six-monthly liquidator’s report by the Official Assignee noted that $430,564.50 that had previously been held in trust had been recovered. But it said that was a fraction of what investors were owed.

“The amount to distribute after the liquidator costs represents only a small proportion of the total loss to investors, which appears to exceed $1m. Therefore, after costs we anticipate the return to defrauded investors will be around 2.0 cents in the dollar,” the report said.

“The vetting of claims will take some time to complete. There are over 160 potential claimants of which the liquidators have information from around 100. Much of that information is incomplete as many victims had dealings with Kloogh over a long period of time.

"Every claim must be reviewed, vetted and confirmed before a calculation of the amount each will receive, therefore it is not possible to indicate a date of completion at this time.”

As the funds received were never assets of the company and were to go to the investors, there was no dividend to unsecured creditors in the liquidation, the report said.

“The information already gathered by the interim liquidators regarding victims' losses is being reviewed along with any other investors that we are aware of and a formal vetting and acceptance of those claims in the liquidation is under way.”

The report said it could not include a list of defrauded investors because there had been a court order keeping those details confidential.

Secured creditors include Prospa NZ, Fuji Xerox Finance and Mercedez-Benz Financial Services.

Liquidators earlier said it seemed that the companies had been using the money from some investors to provide returns to others.

"For each investor, an investment that appears in the records in their name, may actually be purchased with another investor's funds or a mixture of investors' funds. The scale of co-mingling and funds misapplied is not known at this stage and will be the subject of investigation.

"This will involve the liquidator having to assess hundreds, potentially thousands of transactions to verify claims by investors to assets currently held with the custodian on trust.”

Tags: Barry Kloogh investment ponzi