Namedropping Chch Ponzi scheme duped investors out of $4m

Otago Daily Times

a day ago

For more than seven years the Tuiras purported to operate an investment business out of Christchurch, raising more than $4m from investors hoping for high returns. However, none of the money was being invested and instead went to fund the couple's lifestyle and repay other investors. RNZ National Crime Correspondent Sam Sherwood reports.
Inside Thomas and Aroha Tuira's home potential investors would be treated to tales of high-net-worth investors that were in his "proximity".
Not one to shy away from a name drop, he'd say he was personally connected to the likes of NBA legend Michael Jordan and speaker and philanthropist Tony Robbins.
The pitches were successful. One former All Black invested money believing his funds were being used to build a sports stadium commissioned by Jordan, while others thought their money was going towards housing projects, a dental firm and education.
Between May 2014 and May 2021, the couple's company Ngākau Aroha Investments Limited, received more than $4 million from 61 investors who were promised returns.
However, the reality of the situation was far from perception. Thomas, who is known as Alex, had no personal connection with Jordan or Robbins, and the Tuira's did not invest any of the funds, instead using it to fund their lifestyle and repay other investors.
The couple's Ponzi scheme would eventually come crashing down after repeated requests from investors for the withdrawal of their funds and in late 2021 the Serious Fraud Office came knocking on their door.
Last week Alex Tuira pleaded guilty to two representative charges of obtaining $4m by deception. On Monday, Aroha also pleaded guilty to the same charges.
Court documents obtained by RNZ reveal the full story behind the couple's criminal enterprise. The Tuiras
According to court documents neither Alex, nor his wife Aroha, have any formal qualifications or any experience in financial management, investment services or investing.
The couple are Jehovah's witnesses and of Māori descent. They were closely associated with members of their respective communities in Christchurch.
In 2019, Ngākau Aroha Investments Limited (NAIL) was incorporated with Alex listed as the director. In May 2019, Aroha was added as a director.
The couple each held a 40 percent shareholding in NAIL, with the remaining 20 percent split between their three daughters.
NAIL's main source of income was via investors, although it was also hired by a small number of entities.
Alex gave introductory seminars to encourage Māori to become debt-free and was also hired to provide "governance mastery" and business advisory services.
Alex's financial literacy seminars were pitched at a "basic level" and were modelled on seminars he had attended by other public figures such as Robbins and American businessman and author Robert Kiyosaki.
Court documents say the couple "purported to operate an investment business out of Christchurch", offering investment opportunities, financial advice, and financial literacy training.
"Mr and Mrs Tuira presented a facade that they were successful and well-connected businesspeople who had the ability to invest funds and generate high returns. In reality, the defendants did not operate an investment business and did not invest any of the funds."
The couple's "fraudulent stratagem" involved a "continuous course of deceptive conduct".
"As at the date of the first investment, the defendants' accounts were overdrawn. From the outset of the scheme, they relied on investor funds as their primary source of income."
Alex was described as the "architect" of the fraudulent operation and "face of the purported business".
"He pitched investment opportunities to new investors to encourage them to come on board. He was the primary presenter and outlined to potential investors his personal 'proximity' to wealthy and successful individuals and access to opportunities to generate high investment returns."
Aroha was the "primary source of contact" for investors once they had been "recruited".
"In addition to communicating about investments, Mrs Tuira regularly communicated with investors on a personal level to generate love and trust. Mrs Tuira also attended all the pitch meetings with investors, often prompting Mr Tuira to say certain things, and signed the various agreements alongside Mr Tuira."
The couple took advantage of relationships they had developed in the Māori and Jehovah's Witness communities.
"Their modus operandi involved presenting as a strong, loving whānau who embraced the principles and values of these communities. They welcomed investors, as friends and whānau, into their home." The pitch
The Tuiras would arrange in-person meetings with prospective investors, often at their home.
The presentation would often be accompanied by a PowerPoint which included "high-level information" about their values and connections with "wealthy and successful people" including Jordan and others.
"Mr Tuira showed pictures of himself with Tony Robbins and Robert Kiyosaki and described them as personal mentors. In reality, the photos were taken when Mr Tuira attended large seminars presented by them."
On several occasions, he told investors Indian billionaire Sanjiv Saddy was going to invest a billion dollars into the couple and their businesses.
"While Mr Saddy is a wealthy businessman based in India and was introduced to Mr Tuira on one occasion ... he never invested in NAIL or any other business associated to the Tuira family," court documents state.
Many of the investors had "limited experience" with investing.
"As such, they rarely sought detail from Mr Tuira of how funds were to be invested and were satisfied by confirmation that the funds would be invested. Mr and Mrs Tuira used the promise of guaranteed high returns to encourage investment."
Alex would also mention specific investment opportunities to lure them in such as former All Black Joe Moody who believed his funds were being used to build a sports stadium commissioned by Jordan. Other investors believed their money was going towards things such as housing projects, a dental firm and education.
The couple would often pitch investments as "time-sensitive" and only available to certain people.
In a text to a couple in June 2019, Alex said he wanted to "propose an opportunity" where he could do a 50 percent return in 16 months "plus bonuses".
"Everything is in contract form as appropriate. It is time sensitive and exclusive."
In November 2018 he told another investor that as they were part of the "small immediate proximity" he wanted to keep them updated with opportunities.
"Right now we have our best investment deal on the table which is 6 months with a 15% Return on Investment. However because this deal is so awesome we only have a small window of opportunity to take it. So for this particular deal all paperwork would need to be complete by 4pm tomorrow. There is absolutely no obligation to take this offer, it is simply out of courtesy and love for you both that we are sharing this Arohapumau Aroha & Alex xoxo." The spreadsheet
The summary of facts says despite the couple representing to investors that NAIL was an investment business, at no stage during the period of offending, were genuine investments made.
Rather, the funds were used in two ways - paid to other investors as purported returns on investments, and transferred into accounts operated by the couple and used to fund their families' day-to-day expenses.
"NAIL was effectively insolvent from 2017 onwards."
Between May 2014 and May 2021 the couple and or NAIL received $4.7m. Of that, $4m was from investors.
From that money $1.4m was payment to investors, more than $500,000 went on travel, $478,000 on personal expenditure and $270,000 on rent. Other expenses included contractors, finance, consultants and vehicle expenses.
The couple took several steps to disguise their offending, such as providing false information to their accountants and setting up a new company in 2019 called Power to Me Aotearoa Tapui limited (Power to Me) and telling investors that their outstanding returns were connected to shareholdings in a "successful and promising business".
In April 2019, the couple's former accountant emailed the couple expressing concerns about the viability of their "business activities".
"This is of particular concern when looking at your investors and their returns, which appear to be funded (along with principal payments) by new investors. As we mentioned to you, while we realise this is not your intention, this could be perceived from an outside party (including your investors) to be a 'Ponzi Scheme' which is for all intents and purposes an illegal activity."
The summary of facts says the couple told their former accountant and his colleagues that Power to Me was a "genuine business venture" and that money was being invested into it.
"In reality, Mr and Mrs Tuira were not conducting any genuine business activities and their only source of income was funds obtained from investors."
By mid-2021, the couple were receiving a large number of requests from investors for the withdrawal of funds. The couple tried to get new investments, but were unable to meet all of the requests.
About the same time they created a spreadsheet named "here is the reality of our money 2021".
The spreadsheet had three tabs - investments received, investments made, and summary.
According to the pair's calculations they owed $7.9m to investors and creditors such as Finance Now, Q Card, Westpac and ANZ.
Investors were given an array of explanations by the couple in their attempts to delay repaying them money including illness, delays with clearing funds and legal problems.
"These successful delay tactics meant the defendants were able to continue their offending over a number of years and assisted them in identifying further investors and soliciting further investments." The SFO investigates
In November 2021, the Serious Fraud Office announced they were investigating the couple following continued failures by the couple to respond to request funds to be withdrawn.
In an email sent to some investors shortly after, seen by RNZ, Alex wrote that "for a variety of reasons" the expected returns on their shareholding "had not been realised to date".
"That under performance will be reflected in the value of your shareholdings.
"That has caused disquiet and lead to what are in our opinion unjustified aspirations against our good names and a complaint to the Serious Fraud Office" (sic).
He said all such claims were denied.
"We are taking legal advice concerning initiating defamation proceedings.
"Although we have received a number of messages of support, others apparently regarded their share purchases as some form of personal guarantee of return (which was never the case) and the situation has deteriorated to a point where we no longer feel able to continue to work with some people."
The SFO's investigation would reveal the couple obtained by deception $3.9m from 55 investors including former Ngāi Tahu chairperson Sir Mark Solomon.
In May 2023 the SFO announced it had charged the couple.
The couple were due to go to trial last week. However, Alex pleaded guilty to his charges before it began and then on Monday Aroha did the same.
The pair are due to be sentenced in November.