21 Dec 2021

Man who defrauded investors of $80m gets eight-year jail term

7:29 pm on 21 December 2021

A Christchurch investment fund manager who defrauded 150 investors of more than $80 million has been sentenced to eight-and-a-half years in jail.

Christchurch Court building

Kelly Simon Tonkin admitted several representative charges, when he appeared in the Christchurch District Court. Photo: RNZ / Nate McKinnon

Kelly Simon Tonkin, 52, pleaded guilty in the Christchurch District Court to representative charges of false accounting, false statements, and forgery brought by the Serious Fraud Office (SFO).

He was given a minimum non-parole period of four years and three months.

"This case was significant for both the scale of the fraud and the number of victims who were impacted by Mr Tonkin's offending," SFO director Julie Read said.

Tonkin, a former economist, controlled, made the investing decisions, and reported on the performance of the Penrich Global Macro Fund, registered in the Cayman Islands, a Caribbean tax haven.

The company invested in a broad range of high-risk foreign exchange and fixed income products.

The fund started to perform poorly from 2012 and to cover mounting losses, retain current investors and recruit new ones Tonkin inflated the value of assets, leading investors to believe they were making money, when in fact they were losing value.

"When it became clear his fund was not performing well, Mr Tonkin not only concealed this from investors and his company but sought further investments based on his fraudulent accounts. He used these funds to attempt to trade his way out of his losses, but in doing so dug himself and his investors into deeper financial trouble," Read said.

Tonkin's fraud was revealed by a staff member.

"It is important that investors are able to trust the advice and information provided by those managing their money. Actions such as Mr Tonkin's undermine this trust and threaten the integrity of financial markets," Read said.

Tonkin's sentence is one of the longest for a fraud since Wellington investment manager David Ross was jailed for 10 years and 10 months for running a Ponzi scheme in which investors lost $115m. Ross served six years before being released on parole.

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