SFO confirms investigation into American funds provider

29 November 2012

SFO confirms investigation into American funds provider

The Serious Fraud Office (SFO) has confirmed a formal investigation has been commenced into the New Zealand activities of United States based funds provider, Brockstar Group (Brockstar).

Acting SFO Chief Executive, Simon McArley, confirmed that there is reason to suspect that an investigation may disclose serious or complex fraud. Accordingly a Part I investigation had been commenced.

The SFO investigation arises out of two other SFO cases. During both the B'on Financial Services and Derivatek investigations it was alleged that parties involved had sought funding from Brockstar. In both cases substantial sums had been paid as advanced fees in an attempt to secure loans. The loans were never received and the advance fees were not returned.

"The desire to meet these fees may have driven the conduct that was the subject of both investigations. It is important that we address these drivers of financial crime, and in doing so prevent further losses to the New Zealand public," Simon McArley said.

He also cautioned that the conduct may not have occurred in New Zealand, and would be outside the New Zealand jurisdiction.

"However at the very least we can raise the matter with the US and other overseas agencies with whom we have ties, and see if they are in a position to initiate some action," he said.

The SFO are interested to hear from anybody who has had interactions with Brockstar. Contact details for the Office are: free phone within New Zealand 0800 109 800 or from overseas +64 (9) 303 0121 or email complaints@sfo.govt.nz

ENDS

For further information

Andrea Linton
Serious Fraud Office
027 705 4550

Note to editors

Role of the SFO

The Serious Fraud Office (SFO) was established in 1990 under the Serious Fraud Office Act in response to the collapse of financial markets in New Zealand at that time.

The SFO operates three investigative teams:

• Evaluation & Intelligence;
• Financial Markets & Corporate Fraud; and
• Fraud & Corruption.

The SFO operates under two sets of investigative powers.

Part I of the SFO Act provides that it may act where the Director "has reason to suspect that an investigation into the affairs of any person may disclose serious or complex fraud."

Part II of the SFO Act provides the SFO with more extensive powers where: "...the Director has reasonable grounds to believe that an offence involving serious or complex fraud may have been committed..."

The SFO's Annual Report 2012 sets out its achievements for the past year, while the Statement of Intent 2012-2015 sets out the SFO's three year strategic goals and performance standards. Both are available online at: www.sfo.govt.nz