�The most amusing local story-ever involving a club benefactor involves the Richmond Athletic club in Nelson. This guy forever defines the phrase "dodgy club sponsor" in terms of football in NZ. Reads like a parody almost. Also perhaps useful as a yardstick to measure football club backers by. The "Phoenix Seven" must definitely inspire confidence! Philip Whitley spent tens of thousands of dollars he didn't have�on recruiting top Solomon Islands internationals and British pros, leaving them all unpaid and unable to afford the airfares home when his fraudulent business was exposed in 2007. His brother was the main benefactor of Gisborne City at the same time (in his case drawing on funds from Russian business dealings):
<div id="photocredit" sizset="5" sizcache="0"><span ="photocredittext">COLIN
SMITH/Nelson Mail</span>
<div ="photocaption">WEB OF DECEIT: Philip Whitley was likeable but not
always believable, former acquaintances say CONDENSED:
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Months before Whitley's 2007 arrest by the Serious Fraud Office on two
charges of misleading investors, tales of his strange and lavish lifestyle were
circling around Nelson.
The big-talking import from Gisborne was sponsoring a Richmond football team
to play in a South Island league, and was known to sweep up to the team's games
in one of his two new black 300C Chryslers � <span ="goog_qs-tidbit goog_qs-tidbit-0">rumoured to have bulletproof windows �
flanked by security guards. </span>
<span ="goog_qs-tidbit goog_qs-tidbit-0">He had shifted from Richmond to
a $2 million mansion in Redwood Valley.</span> Whispers circulated that the
businessman with the mullet-styled hairdo had invented the next big thing in IT�
that he was going to be in the same league or richer than Microsoft's Bill
Gates.
He needed the security, the story went, because he had discovered one of
computer science's holy grails � the ability to compress and re-expand digital
computer files in a "lossless" way, dramatically reducing the storage space
needed for data and allowing faster transmission of it.
It was a discovery potentially worth billions.
Some were sceptical of this self-made kingpin, questioning why he would be
sitting on something so big in sleepy Nelson. If they had dug deeper, they would
have discovered that as early as 2001, one of New Zealand's leading experts on
such technology, Professor Tim Bell of Canterbury University, had tested
Whitley's invention and found it "mathematically impossible" that it could work.
But there were plenty � 490, in fact � who smelled a fortune and invested
$5.3 million in Whitley's company NearZero between August 2006 and May 2007.
That is not counting money poured into the project before 2006, which the
Serious Fraud Office estimated to be in the hundreds of thousands.
Investigators said much of Whitley's money was spent on his lifestyle � cars,
boats, travel � and his over-the-top security.
Before his fantasies got away on him, Whitley was an unremarkable enough man.
He had no particular qualifications, and some previous acquaintances now speak
of him disdainfully. He worked with software, although the full extent is
unclear. He had a family, and a passion for football and model yachting.
For a few heady months, when the money was pouring in from those convinced by
his claims, <span ="goog_qs-tidbit goog_qs-tidbit-1">he was the financial
backer of the Richmond Athletic Football Club, becoming its president</span>.
Current president Stu Reid recalls those days. <span ="goog_qs-tidbit goog_qs-tidbit-2">"He showed us the potential that we
could reach as a sports club,</span> and he certainly did have some big dreams."
He says Whitley was likeable, if not always believable.
"I thought some of the things that came out of his mouth were quite hard to
believe, but I never thought for a moment that he was actually doing what he was
accused of doing."
There were other odd aspects. For a supposedly high-flying businessman,
Whitley's dress sense raised eyebrows. Sometimes, he turned up to meetings in
track pants and slippers. "We kind of thought, `Who is this guy'?" Mr Reid says.
Whitley explained his casual attire by saying he got sick of wearing business
clothes while working in Auckland's rat race.
Mr Reid says alarm bells rang when Whitley started talking about his company
being worth billions and arriving at the club in a flash car flanked by security
men, who drove another flash car and carried out security checks of the field's
perimeter.
"If someone in our little sleepy town in Nelson says, `I've got a business
that's worth billions', you kind of go, `Hang on a minute, that doesn't make
sense'," Mr Reid says.
He visited Whitley at his business in Stoke's Wakatu Estate and says the
paranoia and security there were "weird".
"This is Phil Whitley, the president of our football club, and we can't even
get in the building to see him."��
Even now, Mr Reid says he does not believe Whitley meant the club any harm.
Yet the heights he had taken it to quickly evaporated, when the first wave of
investigators arrived to start scouring through Whitley's business affairs.
....That was the last time Mr Reid spoke with him. Whitley phoned him to say he
had to resign from the club, and that a story was about to appear in the
newspaper.
At the end of the call, he wished Mr Reid and the club luck. Despite his
personal feelings towards Whitley, Mr Reid says that kind gesture still lingers
with him.
The club was left with a team having to scratch together money to pay for a
bus to away games in the Christchurch-based league. They ended the season at the
bottom of the table and were eventually relegated.
...The paranoia was subsequently explained by Whitley's belief that organised
crime networks could be after his technology.
His supporters seemed to forgive him his excesses, just as they accepted the
years of inaction when Whitley was said to have been stricken with the
brain-affecting virus encephalitis � or the numerous, often contradictory or
flimsy stories he came up with to convince others that enormous wealth lay
ahead, despite consistently failing to meet deadlines.
While it has been said that Whitley could be manipulative, unreliable and
unpleasant to work with, especially to those who pushed him, he charmed and
flattered others, and wooed them with big salaries.
His head security guard told the Nelson District Court that Whitley offered
to pay him $300,000 to $500,000 � a figure Whitley said he had settled on after
talking with Bill Gates' father.
The trial also showed that business contacts in Nelson enabled Whitley to
meet with contacts far outside his own world, even pitching his technology to
multinational spacecraft manufacturer Ball Aerospace.
His supporters were noticeably absent during his 20-day fraud trial, which
started in February and finally concluded in May.
The trial, before a judge alone, proved heavily lopsided. After a polished
three-week prosecution case by the SFO � which was remarkable for the calibre of
the witnesses, some of whom were flown in from London and Seattle to testify �
Whitley's defence lacked any punch.
The defence admitted Whitley didn't have the technology to the level he had
claimed, but because he was delusional, he genuinely believed it existed � an
argument ultimately dismissed by Judge David McKegg.
In his closing address, SFO prosecutor John Upton QC summed up the case by
calling Whitley a "manipulative liar" driven by greed.
"He was also a master of divide and rule, and played investors off against
each other, and was paranoid not that his technology would be discovered, but
that his fraud would be exposed."
He initially claimed he had an engineering degree as an automotive machinist,
before acknowledging he had only done an apprenticeship at Gisborne's Redstone
Motors. This appears to be his only qualification.
He used his supposed case of encephalitis to excuse "holes" in his memory.
While he made various claims about his work as a software developer,
including for Tairawhiti Healthcare in Gisborne, Nelson Mail inquiries have not
been able to confirm what work he actually did.
His former employer at Redstone Motors, Keith Redstone, recalls him as a
"smart talker" whom he came not to trust. "He was quite good at his work, but he
was a bit devious."
A search of the Companies Office register shows that Whitley has a number of
failed businesses behind him, usually involving computers. A silent partner in
one of those businesses says now that Whitley was "as cunning as a cartload of
monkeys" and he "wouldn't trust him with a dangerous dog".
His ability to tell tall tales was perhaps the most lasting impression left
from the trial.
In his verdict, Judge McKegg listed 13 lies Whitley had told about matters
relevant to his invention. He had lied about his qualifications, who he had
worked for, his family's assets, the money he had and the backers he had lined
up. "A pattern emerges in which the accused created falsehood upon falsehood in
order to sustain investment in his company," the judge said.
medication and a diagnosis of bipolar disorder, which led him to exaggerate
things, "I won't say I'm in a better space � I still get the horrors � but I'm
more calm and settled and not extravagant".
His sentencing next month � the charges carry sentences of up to 10 years in
prison � should see the door finally slammed on Whitley's house of cards.
But despite the court dismissing the existence of the technology, Whitley
continues to maintain that he has invented a data compression programme that
works to some degree. He told the Mail he hopes to get home detention so he can
work on software to pay back his creditors. '
I think the worst thing about this is the length of the post... No?