Fraudster behind $8.3m ponzi scheme jailed for eight years

A serial fraudster who helped cheat Cantabrians out of more than $8 million in a Ponzi scheme has been sentenced to almost eight years in prison.

The Serious Fraud Office brought charges against Lance Ryan and Jimmie McNicholl after they used forex platform BlackfortFX to milk $8.3m in investments from 900 people mostly from the Christchurch region. They were convicted on the charges.

The pair were sentenced at the Christchurch District Court today. Ryan was jailed for seven years and six months, while McNicholl was sentenced to 11 months of home detention and $50,000 in reparations.

Ryan, also known as Lance Thompson, had pleaded guilty to fraud in May for his role in the scheme. He also has several previous dishonesty convictions, and Insolvency Act and Companies Act offences.

McNicholl was the sole shareholder and director of BlackfortFX and pleaded guilty in May to obtaining the registration as a financial services provider by deception.

“The sentence imposed on Mr Ryan reflects the very serious nature of his offending,” SFO director Julie Read says.

“He cynically manipulated vulnerable and trusting investors, many of whom have suffered considerable stress in addition to financial loss.”

Arena Capital, which traded as BlackfortFX, was registered on the Financial Service Providers Register and purported to offer foreign exchange services to clients.

Money was owed to nearly 1000 clients who placed money with the company on the understanding they would profit from trading in foreign exchange markets.

The SFO says instead, investors' money was pooled, and no funds went toward legitimate trading platforms.

Ryan was found to personally have taken at least $1.39m and McNicholl no less than $709,000 of investors' money. The pair used the cash to buy property and cars.

The Financial Markets Authority obtained asset preservation orders over Arena’s assets in May 2015 and referred the case to the SFO.

Arena was moved into liquidation by the Christchurch High Court on July 24, 2015.

FMA general counsel Nick Kynoch says despite the successful prosecution, hundreds of people remain out of pocket.