New Zealand man pleads guilty to $300M fraud

Aug 29, 2013, 1:22 AM EDT

WELLINGTON, New Zealand (AP) — A New Zealand man pleaded guilty Thursday to running a $300 million Ponzi scheme, the country's largest ever.

Former Wellington financial adviser David Ross pleaded guilty to five charges of false accounting and theft. The 63-year-old has been jailed pending his sentencing in October.

Regulators say 1,200 investors lost paper returns of more than 380 million New Zealand dollars ($296 million) in the scheme. Serious Fraud Office acting manager Graham Gill said their out-of-pocket losses were at least NZ$115 million.

Ross first began managing funds in 1989. The Serious Fraud Office believes from its investigation that he began running the Ponzi scheme about mid-2000.

Regulators last year suspended his authorization to act as a financial adviser and his company, Ross Asset Management, was forced into bankruptcy.

Gill said Ross reported returns on clients' investments that never existed.

Ross faces up to 10 years' in prison on the most serious of the charges. Regulators aren't planning to file criminal charges against any others.