Victims to tell their stories at sentencing over $15.7m ponzi scheme

Barry Kloogh outside the Dunedin District Court this morning. Photo: Linda Robertson
Barry Kloogh. Photo: Linda Robertson
Dozens of investors who had their life savings stolen by shamed financial adviser Barry Kloogh will today tell him how he has shattered their lives.

Kloogh, who has pleaded guilty to multiple charges stemming from his theft of at least $15.7million from hundreds of clients, will be sentenced in Dunedin today.

A full day has been set aside for the hearing.

Many people who once trusted Kloogh and regarded him as a friend are opting to read out victim impact statements that detail the damage he has done.

"It’s changed our lives completely," one investor who has lost a six-figure sum said this week.

"Straight after it happened, I just went into a deep depression and I did not want to be here.

"I could just not see myself coping with the loss of all our money and the cancer I was going through, and I had to seek professional help and take medication, but it’s there every day."

Many of the investors have already sat down with Kloogh as part of a restorative justice process.

"Whether there is any remorse there, I don’t know. He’s firmly convinced that he’s going to get our money back, but how I just don’t know," one investor said.

"He’s just going to sit in prison. He’s got a warm bed and a TV, and he’ll get out and he’ll just carry on."

Many of the investors who will attend today’s sentencing are members of an affected investors group, set up to provide information and support.

The group spokeswoman said today was a significant milestone, but the work of untangling Kloogh’s financial affairs would go on for years.

"I believe some people are still coming forward now ... and there are a lot of indirect victims in this, too," she said.

"I think some people will find closure, but there is still a long journey ahead for this process, not just working through this but also trying to make sure it doesn’t happen again."

Kloogh was the operator and sole shareholder of Financial Planning Ltd and Impact Enterprises Ltd, and offered insurance and mortgage-broking services as well as financial planning.

However, rather than investing his clients’ money through a secure platform — as they believed he would — Kloogh instead operated a ponzi scheme, using newly invested money to pay off clients who requested their money back.

Kloogh’s office and home were searched by police and the Serious Fraud Office in May 2019.

His companies have now been placed in liquidation and Kloogh has declared personal bankruptcy.

In his interviews with investigators, Kloogh said he believed he had stolen $18million from investors, and that he had operated his ponzi scheme for years.

In March, Kloogh pleaded guilty to representative charges of false accounting, false statement by a promoter, theft by a person in a special relationship and obtaining by deception.

He has also pleaded guilty to four individual charges of forgery, theft by a person in a special relationship, and two charges of obtaining by deception.

 

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