Wellington: A New Zealand fund manager appeared in court on Thursday charged with masterminding the country’s largest “Ponzi” scheme, which allegedly defrauded more than 1,200 investors of NZ$400 million ($320 million).

The Serious Fraud Office (SFO) said Wellington-based David Ross, 63, had been charged with four counts of false accounting and one of theft over his management of Ross Asset Management, which collapsed last November.

“The charges laid by SFO allege that Ross conducted a Ponzi scheme which he disguised by falsely reporting clients’ investments,” it said in a statement.

The SFO said it launched a joint investigation with the Financial Markets Authority late last year after receiving complaints from investors that they were unable to access their funds.

The probe allegedly found that Ross had siphoned funds worth hundreds of millions of dollars through a fictitious broker and legitimate investments but the fund totalled only NZ$10.2 million.

“The allegations made amount to serious criminal matters,” SFO acting chief executive Simon McArley said.

“However the saddest fact of all of this is the position that Mr Ross’ clients find themselves in.”

Ross was bailed in the Wellington District Court to reappear on July 4.

A Ponzi scheme is a fraudulent investment operation that pays out returns to existing investors with money put in by new clients, and is liable to collapse when injections of fresh funds dry up.

The SFO said the Ross case was the largest alleged Ponzi scheme ever encountered in New Zealand.