Developer lost nearly $6m through ripoff

A prominent Tauranga businessman says he was progressively fleeced of nearly $US2.7 million ($5.8 million) by a former Citibank executive - who was, in turn, ripped off by dodgy Nigerians.

Paul Adams is one of five men allegedly swindled out of a total of $7 million by Graeme Kenneth Rutherfurd, who has denied 19 counts of using a document, three of obtaining by false pretences and one each of theft and forgery.

Mr Adams - a major property developer, former Business Roundtable member and director of 20 companies - told the High Court at Auckland yesterday that he fell victim to the "consummate liar" two years ago.

Mr Adams said Rutherfurd rang him in January 1998 with an offer to invest in a European fund that would return a big profit quickly because it was due to be cashed in.

Mr Adams was initially wary, but the man he had known and trusted for 20 years offered a personal guarantee, which he backed with a kiwifruit orchard and other assets. Mr Adams agreed to invest $US450,000.

Rutherfurd then offered more supposedly safe European investments for $US470,000 which he said would reap good profits. Mr Adams said he paid that sum and a further $US750,000 because he was told all the money invested so far would be repaid within two weeks, on February 16.

After paying $US500,000 more, he grew worried about his ballooning commitments and decided to check out Rutherfurd's status with Citibank, which the accused had left two years earlier. Mr Adams said he heard "glowing reviews."

The money was not repaid by February 16, or in the following weeks.

Rutherfurd flew to Europe and phoned back to say there were problems releasing the cash from Liechtenstein.

Mr Adams flew to Europe twice to ask Rutherfurd what was going on, but said he was instead persuaded to hand over more money to unlock the fund.

In all, Mr Adams said, he paid $US2,695,000 ($5.82 million) before Rutherfurd admitted he had given it all to a Nigerian petrol firm that had promised him control of a fund worth $US30 million. None of the money had been seen since.

"I was shattered to find out I had been so badly misled."

Mr Adams' accountant, William Lochhead, said the loss had had a devastating impact.

"The working capital of the Adams group was annihilated ..."