Former Dunedin lawyer John David Milne (79) pleaded guilty in the Christchurch District Court on October 6 to 34 Crimes Act charges brought by the Serious Fraud Office (SFO).
The charges relate to Mr Milne eliciting money from clients or associates on the premise that he would invest that money and pay them a return on their invested funds.
Mr Milne’s activity had hallmarks of a Ponzi scheme as he had in fact been paying investors from funds received for investment from other clients.
He had not actually invested any of his clients’ money but operated the scheme for more than 20 years from 1991 involving about $2.8 million.
Mr Milne had a loyal client base in Dunedin derived from his previous legal work in a sole practise. He was a lawyer with Harewood Law Office in Christchurch, owned by Craig Paddon. Prior to that, he ran a sole practice in Dunedin from 1960 to 2008.
The New Zealand Law Society found Mr Milne guilty of professional misconduct over his handling of client funds, and struck him off the Register of Lawyers.
Mr Milne was declared bankrupt in October 2012.
SFO Chief Executive Julie Read said that clients who trusted Mr Milne were keen to be involved with a scheme that paid such good returns.
“Mr Milne’s victims were vulnerable, and although there is a sense of relief that he has pleaded guilty, for many it is too late to recover from the impact of his dishonesty,” she said.
Mr Milne has been remanded on bail to reappear for sentencing on November 26, 2014.
Source: Serious Fraud Office
