Ponzi schemer’s jailing leaves victims wondering

March 23, 2018 | By More

File image. © Andrew Bardwell

Ponzi schemer Paul Clifford Hibbs has gone to jail for eight years for his $17.5 million frauds with victims still wondering if he has assets hidden away.

The prosecution said that after his scheme fell apart, Hibbs did not co-operated with the Serious Fraud Office and the company liquidators’ investigations.

Prosecutor Mark Zarifeh told Hibbs’ Christchurch District Court sentencing session that there was evidence funds were transferred and could not be located or tracked.

He said that behaviour should be used to counter any claim for a sentence reduction for Hibbs’ remorse or good character.

Investigators checked his bank accounts, searched his home, and traced his travel to try to track down where the money went. His travel included visits to Australia, Rarotonga, and Singapore with a stopover in Hong Kong.

The Crown referred to $5 million of the money which could not be traced or accounted for, but that was challenged by the defence.

Christchurch District Court Judge David Saunders said that was a question for separate legal action being taken in the High Court. “At the end of the day, that will be for the court process through the High Court and the bankruptcy administration to resolve that.”

The 49-year-old took the money from 22 clients and their families and had known many of them for 20 years. He pleaded guilty last year to 25 representative charges of making false statements by a promoter, nine charges of theft by a person in a special relationship, two charges of forgery, and three charges of using forged documents. The offending took place over eight years.

He operated an investment advisory business called Cameron Gladstone Investments Ltd from 2002, and Hansa Ltd from 2005. Both companies were in liquidation by the time of his guilty pleas.

At the time of his pleas, the SFO reported to the court: “He had complete control over his client funds. Many of his clients are elderly. Some have lost their entire life savings and given their stage in life are not in a position to recover the capital lost. The agreed loss is not less than $17.5 million.”

The names and details of all of his victims have been suppressed.

One of the victims said he and his wife had assets invested with Hansa Ltd. He had known Hibbs for 10 years and said he seemed trustworthy and had a good reputation. His offending had impacted on his financial future.

Crown prosecutor Mark Zarifeh said many of the victims were present in court. He said information from the company liquidator about non-co-operation and the amount of the losses could be considered to counter any issues of Hibbs’ good character or his remorse.

The victim impact statements made for very distressing reading. They were affected financially and emotionally because of the trust they had in Hibbs. Some had had to return to work when they thought they had retired, and some felt they were unable to provide for grandchildren as they had planned.

Some had introduced friends and family to Hibbs, and they went on to become victims. Hibbs had not been offering high returns. The scheme was clever, because everything had been made to look very legitimate, grounded and substantial.

Defence counsel James Rapley questioned the level of the losses. He accepted that people had lost their investments and interest, but some of those losses were “fictitious” earnings reported to the victims under the Ponzi scheme.

Hibbs was aware of the effects of his offending. “Many of these people were friends of his,” Mr Rapley said. “He has hurt people, let them down, abused their trust.”

The probation officer’s pre-sentence report said Hibbs’ remorse was evident at his interview.

He said Hibbs had set up a legitimate investment company, but then faced the prospect of telling investors that there were losses. There had been no lavish lifestyle and he had lived in a modest family home. References described him as being active in the community, and being a loving and caring family man. He was now having a difficult and frightening time in prison on remand.

Judge Saunders said Hibbs had banking industry experience before he set up his investment business in 2002. His Ponzi scheme’s effects on his victims had been devastating, causing them immense suffering and financial ruin. His lies had callously caused grief and affected people’s health.

There was no possibility of meaningful reparations. Hibbs told the probation interviewer that the insolvency lawyers would be sorting out the financial aspects.

He jailed Hibbs for eight years, with a non-parole term of four years before he can be considered for release.

Outside the court after the sentencing, investors said the sentence was “a slap on the wrist” and Hibbs should have got more.

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