Estate settlement for giant Ponzi East Wind fails to satisfy creditors

The death of Masatomo Ashikaga, aka Tom Tanaka, in 2019 led to investigations into the East Wind group of companies that discovered a $50 million Ponzi.

Investors owed more than $50 million after the collapse of one of New Zealand’s biggest Ponzi schemes are likely to receive little joy despite liquidators concluding litigation and securing a six-figure settlement against the estates of the scheme’s late mastermind and his wife.

The Auckland-based East Wind group of companies, operated by founder Masatomo Ashikaga as an immigration and investment consultancy targeting Japanese nationals and immigrants, was placed into liquidation managed by Grant Thornton in mid-2019.

The fraud - with tens of millions owed to investors and scant assets to repay them - was uncovered following the death in February 2019 of Ashikaga, also known as Tom Tanaka, by what the coroner ruled was “complications of chronic alcoholism”.

Liquidators sought to interview his widow, Sandy Tsai, about East Wind but before this could take place she too passed away in January 2020. Her death certificate says she died at Mercy Hospice from bowel cancer.

Sandy Tsai, also known as Sui Tai Tsai, widow of suspected East Wind Ponzi mastermind Tom Tanaka, died in January 2020.

The liquidators’ 10th report, published in late December, said they had to take steps “to encourage the appointment of administrators to both estates in order to advance claims”.

Claims against the estates were lodged in the High Court, and were eventually settled for a combined $369,294. Liquidators said settlement was preferred as both parties were deceased, and continuing the action through to trial would have been both expensive and likely take years.

Liquidators note recovery action is ongoing against other parties, including the issuing of a claim against an alleged debtor which will next come before the High Court in May.

The combined closing balances of the seven companies in liquidation stands at just under $500,000 - less than 1 per cent of that owed to creditors - but liquidators flag work still needed to be done before any payout to determine an appropriate method for agreeing claims.

“There are various methods of distribution, which we will discuss with the creditors at an appropriate time, which may be some time away as the liquidators consider the legal claims in the interim.”

East Wind, with 170 creditors owed $53.4m, is one of the largest Ponzi schemes uncovered in New Zealand.

Only David Ross (whose Ross Asset Management owed $115m after its collapse in 2012), and Kelly Tonkin (whose Penrich Capital left investors $80m short after going bust in 2020) appear to exceed East Wind in scale of financial carnage.

While the deaths of Ashikaga and and Tsai limited the ability of authorities to prosecute, the Serious Fraud Office began investigating East Wind in December 2019 - nearly a year after its collapse - and later pressed criminal charges against the company’s former finance manager Yuko Hanyu.

Hanyu worked at East Wind from 2004 until December 2017, and faces one charge of theft by a person in a special relationship and six of false accounting. She has pleaded not guilty and the case is due to go to trial in January 2025.