A New Zealand man who holds the distinction of having perpetrated the country's largest financial fraud in history is back in court to argue that his 65-month "minimum non-parole period" - or time that he must serve before he is eligible for parole - was "crushing" and warranted a reduction. David Ross, 68, was sentenced to a 10-year prison term last year after pleading guilty to operating a Ponzi scheme that took in hundreds of millions of dollars and resulted in approximately $110 million of losses to victims. Due to the relatively lax sentencing guidelines for New Zealand fraud offenses, Ross's 10-year term was widely believed to have been the longest of its kind.
Ross was the director of Ross Asset Management ("RAM"), which he used along with numerous associated entities to solicit investors with the promise of guaranteed and lucrative returns - including annual returns of up to nearly 40%. Investors received regular returns, and Ross was generally perceived as an astute investor. However, in late 2012, many investors began complaining about delays in scheduled payments, and in November 2012, authorities from New Zealand's Financial Markets Authority raided RAM's offices.
After a Receiver was appointed to sort out RAM's finances, a preliminary investigation showed that while RAM reported investments of nearly $450 million to nearly 1,000 investors, only $10 million remained in RAM's accounts. The Receiver, John Fisk, estimated that RAM took in over $300 million since 2000, keeping nearly $30 million kept as management fees while $290 million was withdrawn or paid to investors. Fisk also concluded that the fund was insolvent since 2007 - that is, fund outflows exceeded new investor inflows, sometimes by $60 million. When authorities raised RAM's offices in November, the scheme was on the verge of collapse.
While Ross would be eligible for parole in approximately five years, his lawyer is now arguing that the original term was "manifestly excessive." Citing Ross's elderly age, New Zealand's Sentencing Act, and the theory that rehabilitation is a cornerstone of sentencing, Ross's lawyer has asked the court to reduce the minimum non-parole period to four years - meaning Ross would be eligible for parole in December 2017. As Ross's lawyer put it,
"This is not a get out of jail free card, it is simply lowering the threshold of eligibility."
Predictably, this did not sit well with Ross's victims, many of whom had expressed outrage at the original 10-year sentence. Indeed, a New Zealand prosecutor addressed Ross's elderly age argument by countering that many of Ross's victims were also elderly and faced difficulty recouping their investments.
A written decision is expected from the Wellington High Court on Ross's request.