Today I delivered BBX NZ’s new representative (“Sunny”) with notice warning him that I will prosecute him under s.240 of the Crimes Act 1961, if I catch him peddling BBX without informing those he sells to that BBX is a fraudulent operation. This written warning is in keeping with my blogging and now again-stated intent to close the BBX operations in New Zealand. Here is the letter I served Sunny, at 1:31pm today at Glenfield.
Sunny, like all crooks perpetuating the BBX scam is running scared. He didn’t want to know about me and had instructions to refer everything to Carolin McDonald.
He’s “just an employee” he said.
“No Sunny, this is personal,” I said. This letter is for you, personally!”
“I don’t know if I want to read it,” means, “The moment I turn my back and walk out the door, he will be reading every word of it . . . and consulting a lawyer too, if he’s smart.
BBX is one of the two Commercial Barter exchanges in New Zealand. Bartercard is the other one. Both of them have devalued currencies which has come from theft of the members’ value by the operators of the exchanges. In BBX’s case this runs to the tune of around $7m and this results from pilfering out of the exchange by the principals going back more than a couple if decades, bad debt and member plus various other defaults.
The late Founder of BBX Michael Touma was a banned director in New Zealand when he died. His daughters took over the business, Carolin McDonald muscling herself into the driver’s seat over the say of the other sisters – one sidelined, another included then sidelined herself. It’s supposedly an international success story but as with many self-promoting barter organisations, it’s essentially a funny-money fraud.
I commenced an investigation into BBX following a tipoff and information received from a whistle-blower in Thailand, wrote The BBX Investigation and commenced a criminal prosecution against three of the directors in March this year. This written warning served in person to Sunny this afternoon follows previous warning in writing that I would prosecute any staff and/or member who perpetuated the BBX scam.
BBX New Zealand
Sunny is the face of BBX in New Zealand. He is a young man, with a strong Indian accent and looks. He was not expecting me but he knew exactly who I was upon my introduction. His first words were that he was only an employee and that anything to do with me must go to or through Carolin McDonald. His second words were that he didn’t know why I would want to talk to him. The impression I got was that he was scared of me. He probably has good reason to be if he carries on with BBX NZ.
His offices are upstairs in a small shared-use space consisting of four desks, some boxes and a smoko area, and toilets. It looks to me like the other three desks are the primary lessee – an Asian girl at one desk and the others used but no-one present when I visited. The upstairs space at 4/54 View Road, Glenfield was advertised by Barfoots Commercial late last year for $19k+GST pa and the new lease arranged earlier this year, I believe. There is no BBX signage – either outside on the road or on the building itself, no BBX signage. It’s only an Asian company signage (although Sunny has a pull-up seminar stand beside his desk with a BBX sign which can be seen through the upstairs glass window when the blinds are up or curtain drawn).
I delivered the letter to Sunny personally, informing him that I considered it only ethical for me to do so, confirming him the spelling of his name, writing it on the copy I gave to him, and informing him that I asked for nothing from him – I used my own pen to write “Sunny” and never sought even a business card. I have to not only do this but to be seen to do this to avoid any hint of blackmail. Sunny is and must be perfectly free to do what he wishes with my warning.
Private Investigative Blogger
P O Box 15-1144, New Lynn, Auckland, 0640
5 July 2017
Attention: _______[handwritten] Sunny______________________
I note that you are currently involved in the BBX New Zealand business.
I draw your attention herewith to the series of blog posts published on my website www.dennis.co.nz from Q1 2017, that form The BBX Investigation. I strongly encourage you to read, digest, and confirm for yourself the facts I share and to do so in full.
I advise you to seek legal advice at your earliest, specifically in regards to your legal exposure, should you participate in perpetuating the BBX fraud (if indeed my blogging is accurate and it is proved to be a fraud in any future court proceedings).
I have established, I believe to a level of proof sufficient to stand scrutiny in the New Zealand criminal courts, that:
- BBX has been operated in a fraudulent manner, most likely for many years, with real value being removed from the BBX currency/system by its owners and managers for personal benefit;
- The BBX membership’s account balances are in the order of $7m in deficit; and
- This level of debt within the BBX trading program exceeds the capacity of BBX to ever honour its creditor members by a factor of many multiples, thus rendering the trading programme and currency totally and irretrievably insolvent.
I draw your attention now to the key posts of my blogging which highlight the relevant legislation and my analysis:
My primary analysis of BBX New Zealand is found at: http://www.dennis.co.nz/2017/02/23-bbx-new-zealand-analysis/, Specifically I found that:
The figures show lots of things but the most obvious is that there are a huge number of missing transactions in the system. The BBX NZ members have sold $7,532,238.22 worth of goods and services into the system yet there is only $129,369.33 worth of value left. I have estimated conservatively bad debt at $345,374.16, members who could be “good for it” [if threatened] of $129,369.33 which leaves a massive $6,952,878.04 shortfall – missing transactions.
This is outright theft.
Analysis of the accounts reveals the following information.
An average of one member traded each day and a half (184 members:260 trading days=1.52)
The largest member in credit is $1.9m and represents 26.54 of the members in credit.
There is no member in debt with credible means or likelihood of returning value to the BBX system over $10,000.00.
Like the Australian figures, there are values in the exchange clearly relating to BBX management.
There are 320 members with credit balances, 60 members with $0.00 balance and 115 members in debt to the system.
And I finished with this:
BBX NZ is a perfect example of a barter business exchange raped and pillaged by the principals going back many years, a business ripe for closure. The day the authorities move in Australia, UK, Thailand or New Zealand, the entire stack of cards will fall down. For BBX New Zealand, the barrel is all but empty.
Fortunately the day this happens will not be far away.
My warning to BBX Staff & Members is found at: http://www.dennis.co.nz/2017/03/33-warning-to-bbx-staff-associates/. Specifically I said:
At midnight on Friday 31st 2017, I will actively seek to find any person misrepresenting the true worth of the BBX NZ Trade Dollar. Upon finding and holding evidence that any deception has occurred I will charge whoever has deceived or attempted to deceive another party with the crime of “Obtaining by deception or causing loss by deception” (Section 240 of the NZ Crimes Act 1961) with a New Zealand Private Prosecution, myself as Prosecutor. It will be a valid defence if the person has acknowledgement from another party in a transaction that the BBX Trade Dollar is a devalued currency or if reasonable efforts were made to protect the New Zealand business community from deception in marketing materials, such as IP blocking or providing accurate qualifying statements.
The raw BBX data that I worked from to analyse and comment is found from reading: http://www.dennis.co.nz/2017/03/30-the-raw-bbx-data/ then clicking the link to: http://www.dennis.co.nz/bbx-raw-data/ with the password “1234” and then downloading either one of the ODS or XLS files.
You can validate the BBX data I used from Q1, 2017 with the current BBX system data, of that I am sure.
I published this information online prior to your involvement with BBX and it has been high on the SERPs when searching for BBX. Thus your involvement with BBX can only be seen in the context that you knew, or reasonably should have known that BBX is a fraud. With delivery of this letter to you in person today, your legal advice should (when or if you seek it) be that you cannot now claim ignorance to mitigate your sentencing (should any Private Prosecution succeed).
It is my intention to actively monitor your activities as a representative of BBX. Should I find that you promote the BBX brand, systems or currencies in any way, or even facilitate just one transaction, on the basis that the BBX Trade Dollar is equal to a New Zealand Dollar (NZD) in the cash economy, take notice that I will commence a Private Prosecution against you, as I have already done with the principals of BBX, Magali Russo, Carolyn MacDonald and David Baty, under s.240 of the New Zealand Crimes Act 1961.
You lawyer should also note for you that the penalty for fraud of this nature is a maximum seven years in jail and that a recent Appeal ( http://www.courtsofnz.govt.nz/cases/ngatata-love-v-r/@@images/fileDecision?r=337.079778306 ) against a 2.5 year sentence for a 79 yo male for ‘only’ a $1.5m fraud was unsuccessful, with the Appeals Judges saying:
 In our judgment the end sentence of two and a half years’ imprisonment was
well within range, if not merciful, and could not possibly be criticised as excessive.
I would also note carefully that I seek nothing from you and that should you inform your BBX members of the true value of the BBX currency (by drawing their attention to my website or advising them of the $7m shortfall in the currencies backing) prior to facilitating any trade then I will NOT undertake any Private Prosecution on the basis of s.240.
Dennis A. Smith
Private Investigative Blogger
Sunny has a problem and it is this . . . he has to either gamble that I am full of sh*t or that I am bluffing or wrong, OR he’s got to bail.
There are a couple of other possibilities but he has to assess now whether having met me in person, Carolin MacDonald and BBX NZ is legit and it’s important to keep his job and try and box on making BBX a goer [impossible I might suggest!] OR whether to bail. His problem is that of his own making because now that I know that he knows who I am, he stayed on in the game knowing the nature of the game – for whatever reason doesn’t matter to me.
What DOES matter is that as The BBX Investigation shows that the BBX currency in New Zealand is insolvent; I will be closing it down.
Charging employees with criminal conduct in relation to the BBX scam is highly aggressive, but the law exists for a reason. BBX NZ, its principals and those actively involved in promoting & perpetuating it are now starting to face the law. Good!
The next step is for me to await Sunny’s actions. If he leaves the organisation, with or without notice to me, then I and all observing will know that he, a man on the inside, knows the real score and assessed his chances in court to be poor. If he stays on and perpetuates the scam in any way, then he is risking charges. He will have to bet that all of the people who contact him will be genuine prospects, clients or members and that all 500 members on the database have not turned Queen’s Evidence and that there is no such thing as a Mystery Shopper working for me and . . . and . . . that no evidence of any of his crimes come into my hands.
I may never see Sunny again, but if I do, I hope for his sake that it’s not in a courtroom after having received a summons. If he wishes to turn Queen’s Evidence or if he warns all prospects, members and people he presents BBX to that the currency is devalued before they join or use it then I will not prosecute because the current deception over the value of the currency is removed. If he cuts and runs, I wish him all the best.
The NZ Prosecution Process
In New Zealand the Police normally receive complaints from the public, or a whistleblower. They will generally investigate a complaint, then decide whether or not to lay charges. If they believe a crime has occurred, the Police Prosecutions Division (essentially the legal cops) will lay the charges before the court, the court will issue a summons which forces the person named in the charges to appear in court at a particular time, date and place to answer the charges. They can basically plead “guilty or not guilty and then things happen from there, depending.
The Private Prosecution process in NZ allows individuals (like myself) who have reason to believe that a crime has occurred to prosecute privately. I have done this with Carolin McDonald, Magali Russo & David Grant Baty – the photo above showing the actual documents lodged in the Auckland District Court where I have charged them with OBTAINING GOODS, SERVICES AND/OR OTHER VALUE BY DECEPTION. I blogged about this at the time.
Regardless of whether it is a Police or a Private prosecution, once the accused are served with their summonses they must appear to plead (Guilty or Not Guilty) or they are arrested and brought before the court by force. Carolin & Mags can appear in an Australian Court because NZ and Australia have agreement to do this, or they can travel to NZ and appear in person. In fact one of them may have trouble appearing in NZ (for other reasons) but that’s beside the point here.
Section 240 has a maximum seven year prison sentence so it is a very serious offence. Personally I don’t think that any of these BBX crooks have any idea of what they are up against. Once the evidence starts to flow in the court system, one case will lead to another, and another and from one country to another and it will be ‘all over Rover’! I cannot tell what a NZ judge will determine but if the evidence is clear; if justice is done; if the truth comes out in court; then some people will best get used to wearing the colour orange and staring at concrete walls.
Whatever the case, despite the cover-up by IRTA*, I will be closing down BBX New Zealand, just like I did with Daniel Evans and the Ormita Fraud and the Dutch conmen Rob van Hilten and Edgar Kampers with their Qoin Con.
* BBX is a member of IRTA. I have blogged extensively over the years about how IRTA protects their members even when they know they have done wrong!