Lavish lifestyle funded by $4.7m fraud

Evan Cherry. Photo by Steven McNicholl
Evan Cherry. Photo by Steven McNicholl
A financial advisor stole $4.7 million from investors and spent some of the money on a lavish lifestyle that included three Porsche sports cars.

The court heard how Evan Cherry stole money from about 175 investors. Many of his victims were friends and family and even included the person who married him to his wife.

Cherry encouraged some investors to borrow money against their homes, and at least one is now being forced to sell after losing money to Cherry.

The 54-year-old was sentenced at the North Shore District Court yesterday to six years and two months in prison with a non-parole period of three-and-a-half years.

He had previously pleaded guilty to four charges laid by the Serious Fraud Office, including theft in a special relationship and misleading investors.

Despite the millions of dollars invested in Cherry's company, there is nothing left for the investors, many of whom have lost their retirement savings.

SFO prosecutor Peter Davey said Cherry had made an offer of some shares in one of his companies but the company was essentially worthless.

Cherry, who ran Investment Solutions in Albany, Auckland, was watched by a packed public gallery that included his wife and some of the investors who lost money to his schemes.

He funnelled more than $1.2 million of the stolen money into his business through buying 250 shares.

Cherry also used $583,000 of investor money for his own personal use and $2.7m to repay other investors, in what is commonly known as a Ponzi scheme.

Some of the money was spent on luxury cars including Audis and three Porsche sports cars. He also bought a boat and paid off mortgages.

Cherry's lawyer Matt Dixon said his client had made some "grave errors", and read from a letter his client had written from inside prison.

"The hurt from their words consumes me once again."

Cherry said he was sorry for his actions, and hoped one day to be forgiven.

But Judge Nevin Dawson said Cherry's remorse was prompted by the situation he now found himself in.

"You encouraged some investors to borrow money on their mortgages, which is shocking advice for a financial advisor to give."

He said Cherry provided himself a high standard of living but many of his victims had lost everything.

"It is quite simply disgraceful."

Outside court, investors told APNZ of the pain they had been put through.

One investor, who gave his name as Leon, has been in touch with about 70 investors, bringing them together by email. He personally invested $280,000 with Cherry and managed to get $90,000 back.

But it wasn't easy. He showed text messages to APNZ on his phone which detailed Cherry's excuses for not being able to refund the money. They included fluctuations in the US dollar, accountant auditing and being held up overseas.

Leon said he knows of an elderly man who lost his retirement fund of $850,000 and was now living on a pension. Another couple are having to sell their home after losing money with Cherry.

Asked how he felt about Cherry spending some of the money on luxury cars, Leon said he was "absolutely disgusted".

An investor who wanted to be known only as Pete said he lost $150,000.

"My only question is: 'Where is the money?' ... He's just an f'n scumbag ... It was meant to be our retirement fund"

Semi-retired electrician Russell Jacobsen met Cherry when he re-wired his house. He ended up investing $100,000.

"I had to go and borrow, and I had to change banks to get the money."

Not only has he lost the $100,000 but he has also been left saddled with a $100,000 debt to the bank.


Cherry: the numbers

 - 175 victims
 - $9.073m invested with his companies
 - $4.7m dishonestly used by Cherry
 - $5.3m of investor money was lost
 - $583,000 spent on luxury cars, mortgages, school fees and other personal spending
 - $1.22m used to buy shares in another of his companies.


 

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