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Kloogh v Serious Fraud Office

Kloogh v Serious Fraud Office

Case [2020] NZHC 3397 17 December 2020

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IN THE HIGH COURT OF NEW ZEALAND DUNEDIN REGISTRY

I TE KŌTI MATUA O AOTEAROA ŌTEPOTI ROHE

CRI-2020-412-000035

[2020] NZHC 3397

BETWEEN
BARRY EDWARD KLOOGH

Appellant

AND

SERIOUS FRAUD OFFICE

Respondent

Hearing: 15 December 2020

Appearances:

S A Saunderson-Warner for Appellant R P Bates for Respondent

Judgment:

17 December 2020

JUDGMENT OF DUNNINGHAM J

This judgment was delivered by me on 17 December 2020 at 3.30 pm, pursuant to Rule 11.5 of the High Court Rules.

Registrar/Deputy Registrar Date 17 December 2020

Introduction

[1] The appellant, Mr Kloogh, pleaded guilty to 12 charges relating to a Ponzi scheme which he operated over seven years. The charges are:

(a)false accounting (representative);1

(b)false statement by a promoter (representative);2

1 Crimes Act 1961, s 260(a).
2 Section 242(1)(b).

KLOOGH v SERIOUS FRAUD OFFICE [2020] NZHC 3397 [17 December 2020]

(c)forgery (2);3

(d)theft by a person in a special relationship (2);4

(e)obtaining by deception (representative);

(f)obtaining by deception (3);5 and

(g)forgery (2).6

[2] He was sentenced to eight years and 10 months’ imprisonment with a minimum period of imprisonment (MPI) of 60 per cent of the total sentence.7 Mr Kloogh appeals that sentence on the ground it was manifestly excessive.

Leave to appeal out of time

[3] The notice of appeal was filed approximately 12 days outside the statutory time period to file an appeal. Mr Kloogh’s counsel explained there was a filing error. There is no prejudice to the respondent and I am satisfied it is appropriate to grant leave to file the appeal out of time.

Facts

[4] The summary of facts is both lengthy and complex. There are 81 victims who were defrauded of approximately $15.7 million.

[5] Mr Kloogh began his financial services career in 1983, becoming an authorised financial adviser on 20 June 2011. He provided these services through several companies of which he was the sole director and shareholder, including Impact Enterprises Ltd (IEL).

3      Section 256(1).
4      Sections 220(1)(b) and 223(a). 5 Sections 240(1)(a) and 241(a). 6        Section 256(2).
7      Serious Fraud Office v Kloogh [2020] NZDC 15575.

[6] Mr Kloogh’s clients came from a wide range of ages and occupations and included people wishing to invest their savings to better prepare for retirement. As at May 2019, he had approximately 2,000 active clients, of which approximately 200 were categorised as investment clients.

[7] Apart from his own companies, Mr Kloogh used the services of other entities to provide financial advisory services to his clients, including Consilium NZ Ltd and Discovery Portfolio Services.

[8] Mr Kloogh recruited new clients mainly by holding “free” dinner seminars where he would explain the services he was offering as an authorised financial adviser. At subsequent one on one meetings, he would discuss the attendee’s financial situation, and their investment preferences, if they wished to invest. He would then draw up a financial plan for them.

[9] If the attendee agreed with the recommendations Mr Kloogh made, he or she would sign Mr Kloogh’s scope of services form and become Mr Kloogh’s…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading Kloogh v Serious Fraud Office

Details

AGLC: Kloogh v Serious Fraud Office [2020] NZHC 3397
Case: [2020] NZHC 3397
Decision Date: 17 December 2020

CaseChat Overview and Summary

Barry Kloogh appeals against his sentence on the ground it was manifestly excessive. The appellant pleaded guilty to 12 charges relating to a Ponzi scheme which he operated over seven years. The charges were: false accounting (representative), false statement by a promoter (representative), forgery (2), theft by a person in a special relationship (2), obtaining by deception (representative), obtaining by deception (3), and forgery (2). The District Court sentenced the appellant to eight years and 10 months’ imprisonment with a minimum period of imprisonment (MPI) of 60 per cent of the total sentence. The appellant submits the starting point was too high, the discounts applied for personal mitigating factors were insufficient, the MPI should not exceed 50 per cent, and reparation should not have been imposed. The Crown submits the sentence imposed was within range, was not manifestly excessive and no error of law occurred. The court held that the starting sentence of 13 years’ imprisonment was within the available range and consistent with comparable cases. The court held that the end sentence of eight years and ten months’ imprisonment was within range. The court held that an MPI of 60 per cent was within range. The court held that the order for reparation was inappropriate and quashed the order. The appeal is allowed in part. The order for reparation is quashed. In all other respects, the sentence imposed is upheld.

Orders