US regulator moves to get wanted man from Tonga Featured
Illustration by Rod Emmerson
17 April, 2016. United States authorities are trying to snatch a former Auckland resident whose New Zealand companies were allegedly part of an $8 million Ponzi scheme.
Christopher Pedras, also known as Antone Thomas Pedras, came to the attention of the local business community in 2013, when the Financial Markets Authority cancelled a prospectus issued by his firm FMP Medical Services, which claimed the company would use investor money to set up dialysis clinics.
It was the first time the FMA had cancelled an offer document, which said that Pedras - an American who was living in Orewa - had a diverse business background that included him running a Hawaiian nightclub chain and developing a network of 368 ATMs.
A month after the FMA scrapped the prospectus, US authorities named Pedras, FMP, another New Zealand company and American firms in a complaint about an alleged Ponzi scheme peddling sham investment opportunities.
The US Securities and Exchange Commission alleged Pedras misled his initial investors into believing they were investing in a profitable trading platform in which his company served as an intermediary between global banks.
When Pedras and his companies encountered difficulty paying the promised 4 to 8 per cent monthly returns, they began steering investors to a different investment programme to purportedly increase the value of their investment by 80 per cent, through funding kidney dialysis clinics in New Zealand, the SEC alleged.
However, the SEC alleged that neither of the investment programmes was real.
"Instead the programmes are a Ponzi scheme," the SEC said in its 2013 complaint.
Of the US$5.6 million raised, Pedras and other defendants paid out US$2.4 million to other investors as purported "returns", the agency claimed.
"Defendant Pedras has misappropriated nearly US$2 million in cash, cars, retail purchases, and transfers to and from his relation companies," the SEC alleged.
Even if an extradition order is made, the SEC notes that Pedras may not immediately be packing his bags for his native turf.
Default judgment was entered against Pedras in 2014 by a Californian court for US$3.2 million, representing profits gained from offering securities.
That judgment also revealed that the SEC had frozen 14 New Zealand bank accounts linked to Pedras or companies associated with him.
Island time
Pedras appears to have been living in Tonga for the past few years and in 2014 won an appeal against deportation from the island nation.
Business Insider can now reveal that the SEC's enforcement division is trying to extradite Pedras.
A minute from the SEC, issued this month, said an extradition hearing took place in Tonga on March 29. The decision has yet to be released.
Even if an extradition order is made, the SEC notes that Pedras may not immediately be packing his bags for his native turf and may well appeal any such decision.
NZ Herald
