Whanganui man charged for alleged role as money mule in Citibank scams

Borja Ares and Alfiya Laxmidhar lost $330,000 in an elaborate Citibank-branded investment scheme. Photo / Michael Cunningham

Police have arrested and charged a Whanganui man who they allege acted as a mule for international scammers, allegedly laundering about a million dollars from at least five different Kiwi victims.

Two of the 52-year-old’s alleged victims, Borja Ares and Jo Hurley, lost some $650,000 between them. Both told the Herald they were extremely happy hearing news of the arrest.

Detective Senior Sergeant Phil Taylor said police had received multiple reports of a false term deposit scam where the offender(s) claimed to be investment advisers and got “significant” amounts of money from victims.

“Scams of this nature are often internationally-based and utilise New Zealanders as mules giving their scam a sense of legitimacy,” Taylor said.

Police investigations into these scams resulted in officers arresting the Whanganui man and putting him before the Whanganui District Court on five charges of money laundering tomorrow.

The maximum penalty for each charge of money laundering is seven years imprisonment.

“I was real excited this morning when [police] called and said he was arrested. I actually wanted to be there [during the arrest],” Hurley told the Herald today.

Scammers convinced Hurley to invest $350,000 in a bogus investment scheme as her husband fought for his life in Whanganui Hospital then they stole the inheritance proceeds of her dead mother’s house.

Jo and Jayson Hurley. Jo Hurley tried to invest in a company but was scammed by people posing as Citibank financial managers. Photo / Bevan Conley

Hurley spoke to the Herald earlier this month, saying, “I do my best to stay positive and not feel too guilty about what I’ve done. That money was an inheritance that my grandparents worked hard for and I’ve gone and f***ed it up.”

Earlier this year, Hurley, 43, and her brother dissolved a family trust that held about $700,000 from the sale of their late mother’s house.

Hurley’s husband, Jayson, 48, was on the supported living benefit due to serious health problems, after being diagnosed with Crohn’s disease and suffering three heart attacks last year.

Hurley, a medical administrator, said Work and Income planned to deduct money from her husband’s benefit due to her inheritance, so she decided to invest the money in a term deposit to ensure it was generating a decent return.

Initially, she deposited the money with her local bank, ANZ, but then found a website comparing term deposit interest rates and entered her details.

She was contacted by a man calling himself Matthew Read who claimed to be a Citibank portfolio manager. He discussed investment opportunities and convinced Hurley to withdraw her money from ANZ and invest $300,000 through his company in term deposits.

Her husband’s health had deteriorated and he was readmitted to hospital. She was at his bedside as she spoke by phone to the scammer.

On May 19, Read convinced her to send a further $50,000 to purchase high-interest bonds, telling her the investment opportunity was oversubscribed and she would have to move quickly.

"I was real excited this morning when [police] called and said he was arrested. I actually wanted to be there [during the arrest]," Hurley told the Herald. Photo / Bevan Conley

She made the money transfer that night.

Four days later she received a call from ANZ saying ASB had concerns about the money transfers and “this definitely has the hallmarks of a scam”.

Hurley realised she had been duped.

“I felt so sick. I thought I was going to vomit. I just couldn’t stop crying,” Hurley said at the time.

Today Hurley said, “For me, I want to hear his name, I want to see his face.

“But there’s such a long road and this isn’t all going to happen this week. This is going to drag on for f***ing years. Good things take time, they say.

“The thing for me, though, is that he is in Whanganui and I am in Whanganui. I don’t want to pass him in the supermarket.”

Hurley said she was tentatively celebrating this evening, but would wait for the court to decide whether the man was guilty before she would be fully satisfied.

‘All I have left is hope’ - scam victim

“I still want my money back. I want my kids to go to Disneyland.

“All I have left is hope. If I could get just some of my money back, that would be amazing, but very unlikely.

“And to be fair, I still hope the bank repays us too, because I reckon they’re negligent. They [the bank] received money from six people over whatever timeframe - how did they not figure it out sooner?”

Ares, meanwhile, said he was frustrated it had taken so long to bring charges against any offenders.

“I’m happy [about the arrest], but I don’t think it should have taken so long, and, in all honesty, he was [allegedly] just a mule, you know, small fry.

“Police are never going to be able to prosecute the real culprit, you know, the British men that scammed me,” Ares said.

Ares, a Whangārei health worker, was tricked into losing his family’s entire life savings in an elaborate scam purportedly with one of the world’s biggest investment banks.

When he first spoke to the Herald, Ares said he was emotionally tortured by shame and felt he had “failed my wife and children”.

He said he was seeking counselling and says he had an unnerving sense of “impending doom” since being taken in by professional scammers in May.

He and his wife, who work at Whangārei Hospital, sold their house on May 1 and were looking to invest the proceeds until repurchasing.

After paying their mortgage they had $330,000, which included savings, KiwiSaver funds and money sent from Ares’ mother in Spain to support the young couple and their two preschoolers.

Ares went online to research investment opportunities and found a website comparing term deposit interest rates, where he entered his details.

He was contacted that day by a man calling himself Simon David who claimed to be an investment broker from Citibank based in Auckland, and another called James Higgins. They competed with each other to convince Ares to invest in their portfolios.

Ares said he mainly dealt with David, convinced the man and investment opportunity were legitimate. It was as though he was “on automatic” and “controlled like a machine”.

David sent Ares prospectus information about a range of investment options.

Ares settled on a fixed-rate Yorkshire Building Society bond that promised a generous annual interest rate of 13.5 per cent.

The broker told Ares the bond investment was triple-A rated, low risk and backed by Citibank. It was also attractive as he could withdraw his money at any time if the family bought their next house.

On May 11, Ares phoned BNZ and authorised the first money transfer, telling staff he was “investing in Citibank”.

He claims he was not questioned about the legitimacy of the recipient or warned about a global Citibank scam, which has made headlines here and overseas.

Ares made the final cash transfer the next day and was then sent log-in details to a sophisticated “client portal” where he could track his investment.

None of it was real and nine days later his world came crashing down.

Today Ares said, “My money is completely gone and it’s not going to come back.”

Golden rules of avoiding scams

• Contact investment firms via their official New Zealand-based websites, and never via online contacts, emails, links or phone numbers sent to you directly or from other websites.
• Be sceptical of unsolicited investment offers and verify the credentials of any investment adviser by contacting them directly via their publicly-listed phone number.
• Ensure the investment firm is licensed by the Financial Markets Authority.
• If the investment looks too good to be true it probably is.
• Never open links in text messages or emails.
• Never open attachments from unknown senders.
• Always check the sender of an email to make sure the address is right, especially if the email seems a bit odd.
• Urgency is a flag – scammers will try to rush you.
• Contact your bank as soon as possible if you think you’ve been scammed. The sooner it’s reported the better chance of recovering money.
• Trust your gut – if it feels wrong, it probably is.

Source: BNZ

Raphael Franks is an Auckland-based reporter who covers breaking news. He joined the Herald as a Te Rito cadet in 2022.