A Nelson businessman who cheated investors out of millions of dollars by claiming he had invented a revolutionary form of data compression has been found guilty of fraud.
Philip James Whitley, 49, of Richmond, was charged with two counts of making a false statement as a promoter in 2007. Thecharges were laid by the Serious Fraud Office, which said that in the nine months from August 2006 to May 2007 490 investors sank $5.3m into Whitley's company NearZero.
The investments were based on Whitley's claims to investors that he had invented and patented a revolutionary "lossless" method of compressing data. If the technology was genuine it would have been worth billions of dollars.
Following Whitley's 20-day trial, which finished in May, Judge David McKegg said he was satisfied beyond reasonable doubt that Whitley's presentation to investors, and the documentation he supplied to investors, were created and carefully organised by Whitley, and that he knew they were false.
Speaking from his modest Richmond home yesterday, Whitley, now a sickness beneficiary, told the Nelson Mail the judgment had not come as a surprise to him or his family.
Whitley, who is yet to be sentenced, said he probably wouldn't appeal the decision and hoped he would get home detention so he could work to pay back creditors.
He said finally receiving a decision was a relief as three years since the charges had been laid was a long time to wait for a judgment.
Serious Fraud Office director Adam Feeley said Whitley's scam was not sophisticated, but was made complex by the technology and patent claims Whitley made.
