A phone recording shows Kiwibank confirmed the mule account used to receive the stolen money was a “legitimate” or valid account six weeks before a detective told David Wilson it was a scam.
Wilson, 64, who is next on the NZ First list to enter Parliament, is a former chief executive of Northland’s economic development agency and an economic development consultant. He has a masters in public policy and a PhD.
He is speaking publicly about the case to highlight the slick tactics used by criminals, the lack of protections for victims and what he describes as “inept and inadequate” regulatory systems policing the country’s banks.
Systemic failures were enabling criminals to steal hundreds of millions of dollars from ordinary Kiwis through a deficient bank payment network, while banks made enormous profits and victims shouldered the blame, Wilson said.
“This is endemic. This is our system which is failing on all fronts.”
Wilson was contacted in late 2022 by an investment adviser calling himself Jack Levy, who convinced the Kumeu businessman to invest in renewable energy “green bonds”, purportedly with Australian company Macquarie Asset Management.
After conducting due diligence on the company and completing anti-money laundering checks for the scammers, Wilson sent two $100,000 payments in November 2022 to what he thought was a Kiwibank “holding account” for Macquarie Bank.
Concerned it might be a scam, he called Kiwibank two weeks later, on December 13, to check he had sent his money to the intended recipient. The bank refused to provide information, citing privacy obligations to its customer.
That customer was Aimee Chantelle Rodda, who was paid about $20,000 by an organised crime group to set up “mule” accounts at three banks that received more than $1 million in stolen money under her company’s name, CEB Holdings Ltd.
Police now believe Rodda was “deceived” by a Nigerian scammer into thinking it was a legitimate cryptocurrency venture and say she won’t face charges. Furious victims are preparing a complaint to the Independent Police Conduct Authority and considering a private prosecution.
The recorded phone call
The New Zealand Herald has obtained a recording of Wilson’s phone call in which he repeatedly asks Kiwibank for assurances that the recipient account is linked to Macquarie and that his money hasn’t gone to scammers.
The bank worker refuses to confirm the payee’s identity, telling Wilson he should contact the investment company or Serious Fraud Office.
“So there’s no real protection for me ... to ensure the account I’m paying it into is actually them,” Wilson says in the call. “You can’t tell me.
“I just want to make sure my money’s gone to the right place.”
The staffer repeatedly tells Wilson “that’s a legitimate account and that’s all I can say”.
“We’re an intermediary. We connect people that have money with people who want to borrow money, so we’re just sitting in the middle.”
Wilson responds: “So if this comes back to bite me in two weeks’ time, I’ve got no comeback.
“[I’m] reading all about these people who are masquerading as banks and asking you to invest in things like green bonds. You go through all the process, put the money in the bank ... and you think, ‘Ok, have I been dealing with the right person or is this a front?’”
Two days later, the Financial Markets Authority posted a public warning about a fake Macquarie Asset Management green bonds investment scheme.
Six weeks later, Wilson received a phone call from Detective John Nicholls in Nelson saying: “I’ve got some bad news. I’m sorry to tell you you’ve been the victim of fraud.”
Wilson was stunned.
“The worst phone call of my life was ringing my wife to inform her that we’d lost that money.
“She immediately said, ‘It’s not your fault’ and jumped behind me right away.
“It was terrible. It is a big blow. You can feel it in your gut. You feel like an idiot and you feel like you’re to blame.”
‘Slow, deliberative, inept and inadequate’
After landing in the Kiwibank account, Wilson’s money was immediately transferred overseas in November 2022. Nothing was recovered.
Wilson believes Kiwibank was unaware of the fraud or that it was “harbouring” a mule account, until being contacted by police in February 2023.
He filed a Banking Ombudsman’s complaint about Kiwibank’s response, citing its refusal to confirm the recipient’s identity. He also questioned what action staff took after the phone call to check whether his payments were subject to fraud or the account was being used for “mule” activity.
However, his complaint was dismissed. The Banking Ombudsman said its terms of reference prevented it from investigating Kiwibank’s actions when setting up Rodda’s account, monitoring its activity or its actions after the phone call because Wilson was not a Kiwibank customer.
It suggested Wilson raise his concerns with the Reserve Bank, which oversees banks’ compliance with anti-money laundering and counter-terrorism laws.
The Banking Ombudsman said it could investigate only the services provided to Wilson by Kiwibank, which was limited to information it gave during the phone call.
An investigator found Kiwibank was not obliged to reveal the account holder’s name or affiliation with Macquarie. The bank’s response was “reasonable” and it was not liable for compensation.
“We cannot conclude the bank misled you or otherwise breached any obligation owed to you,” the decision said.
‘We felt let down’
Wilson feels the Banking Ombudsman scheme is toothless, ineffective and weighted heavily in favour of banks.
He said it seemed illogical that the agency investigating bank disputes on behalf of scam victims couldn’t consider the receiving bank’s actions.
The Ombudsman’s role should be to highlight deficient laws and promote change when it uncovered bad practices, he said.
“The system is slow, deliberative, inept and inadequate, and on top of that blames the victims.
“We felt let down.
“The banks make you jump through all these hoops and then they are harbouring a fraudulent account which is actively involved in money laundering and there’s nothing to see here.”
He backed calls by Consumer NZ and Consumer Affairs Minister Andrew Bayly for banks to immediately introduce a system for customers to verify recipient accounts, and for compulsory reimbursement for victims of authorised payment scams. Such rules were already in force in the UK.
While he had lost a serious amount of money, he and his wife would manage, he said.
“But my heart goes out to people in a worse position.
“There’s so much anguish. In the end, you’ve almost got to let it go, otherwise it will just drag you down.”
Kiwibank, Banking Ombudsman respond
The Herald asked Kiwibank why it hadn’t helped Wilson to confirm who had received his money, what action it took after the phone call in response to his concerns and whether other victims had lost money through the mule account.
A spokeswoman did not address most of the questions, saying Kiwibank was unable to disclose details about a customer’s account because of privacy and confidentiality obligations.
In Wilson’s case, it could confirm only that the account name of CEB Holdings was for a legitimate and valid account under that name.
“It was not appropriate for our team to investigate further into who was the shareholder or operator of CEB Holdings.”
Banking Ombudsman Nicola Sladden said her office had to apply the fraud reimbursement rules in force at the time of a complaint.
Current rules did not require banks to reimburse customers who were victims of authorised payment scams unless there were “red flags”.
Her office’s terms of reference did not give it power to consider complaints about recipient banks. Similar rules were in force overseas.
The Banking Ombudsman Scheme was considering a review of its terms of reference to include complaints about payee banks.
Sladden stressed that her office was not a regulator but believed the Government should strengthen consumer protections for scams and review reimbursement rules.
