In 2020, Kloogh was imprisoned for eight years, 10 months on multiple fraud and theft charges, after the Ponzi scheme he had been running for years finally toppled over.
The discovery of the thefts devastated dozens of Otago and Southland families who had invested their life savings through Kloogh, several for many years, confident that as they were dealing with a registered financial adviser that their money would be secure.
Instead Kloogh had been systematically stealing from his clients for years, leaving an enormous financial tangle which the Official Assignee is still struggling to unravel.
In 2019, in his only media interview, Kloogh told the Otago Daily Times that the sole property he owned, in Earnscleugh, had been sold and the proceeds were being handled by lawyers.
That sale was finalised just before the Serious Fraud Office searched Kloogh’s office and the funds — $455,442 — were secured and frozen before they could be spirited off elsewhere.
The latest liquidator’s six-monthly report, released to the Otago Daily Times yesterday, said that the final destiny of that money and accumulated interest remained unresolved.
"Documents have been filed in court as the liquidator’s view that the two trusts have been unjustly enriched by the actions of the director [Kloogh].
"A court hearing date is to be set, but negotiations will continue to try and resolve matters so that expensive litigation is not required.
"The statement of claim also requests that the court make an order that the funds be forwarded to the liquidator so that they can be distributed ... to the victims of the Ponzi scheme."
Although there is the potential some money might be recovered for investors, the frozen sum is dwarfed by the total lost to investors, which exceeds $15 million.
The Official Assignee said in its January update it expected the victims of Kloogh’s theft would receive only 2.5c of every dollar they had stolen from them, an assessment the office repeated in its latest report.
However, there was some small good news for some investors who might have received payments from Kloogh in the months before his companies, Financial Planning Ltd and Impact Enterprises Ltd, were liquidated and he himself declared bankrupt.
There was the possibility that those payments could be deemed "fictitious profits" if it was provable they were made with someone else’s stolen money, and the sum then be returned to that person despite the recipient having accepted them in good faith.
However, the report said that indications to date were that there were no large repayments to investors which clearly fell into that category.
"A number of periodical repayments to investors over that time period are still being investigated."
Combined, Kloogh’s two failed companies have $9871.30 in the bank; as well as the money owed to investors, FPL has $111,703 in general and trade creditors and owes $17,641 to Inland Revenue and $2149 to former staff.
The cost of liquidating both companies exceeds $100,000 so far, and the Official Assignee said it was still not possible to indicate when the process might be completed.
