Mark and Bob: How to be two milllionaires

…as the Commerce Commission and Serious Fraud Office both announced investigations into Blue Chip, Bryers and Bangerter were huddled at Blue Chip's Queen St headquarters. At the same time, boxes of documents were being removed from Bangerter's Blue Chip offices in Parnell and loaded onto a truck.
February 29, 2008

Mark and Bob: How to be two milllionaires

Investors who face losing their life savings in crumbling property group Blue Chip could be forgiven for casting envious glances at the two men who founded the business.

Millions of dollars is likely to be owed to thousands of investors who paid up to $100,000 as a deposit on properties which are yet to be built, or who are owed rental payments on properties which Blue Chip managed on their behalf.

Mark Bryers and Bob Bangerter, who set up the Blue Chip operation about five years ago, appear to have done extremely well out of it. Both live in luxurious Remuera mansions and drive expensive European cars. Bryers also owns a golf club and Bangerter owns a spectacular 22m launch moored at Auckland's Viaduct Harbour.

Before founding Blue Chip, Bryers, a former lawyer, was a small time property developer for several years. His specialty was small to medium sized multi-unit developments which he sold to investors individually. But things did not always go to plan several developments went belly-up and the investors lost money.

Although Bryers was accused several times of trading his companies while insolvent in one case by the Ferrier Hodgson liquidator who was winding up one of his companies and who also accused the Bryers-owned company of failing to keep proper books he was never prosecuted or found liable for wrongdoing.

Bangerter, a former bankrupt, was the salesman of the pair and had been involved in direct marketing companies selling property-related services to the public.

The pair teamed up in 2000 with a company called Homefind which they jointly owned, but within a couple of years this had fallen foul of the Tenancy Tribunal and was being criticised by the housing minister at the time, Steve Maharey.

But it was Blue Chip which appears to have been the pair's most lucrative venture. Late last year Bangerter sold his Mission Bay home and, through what appears to be a family trust, bought a mansion in Remuera for $3.15 million. The sprawling property covering two sections is mortgaged to ANZ Bank.

Until last weekend, Bangerter was driving a shiny black 2005 Bentley Continental, although the large oil slick in his secure car park under Blue Chip's Parnell office where he was based may have been a sign it was not as flash as it looked.

After the Sunday-Star Times revealed Bangerter's automotive tastes last weekend, he moved quickly to swap the Bentley for an equally black and shiny but less conspicuous X-type Jaguar.

According to Companies Office records, Bangerter is the sole shareholder and director of Blue Chip Corporate Charters which owns the luxurious 22m launch Nirvana, moored at Auckland's Viaduct Harbour. Any Blue Chip investors keen to sample the pleasures of this high powered boat with its twin 1090hp diesel engines, three double cabins each with ensuite and an enormous master stateroom for entertaining, could take it for a spin provided they can come up with the readies. Nirvana can be hired for $1012 an hour (minimum three hours) or taken on an extended trip at $10,265 a day, catering included.

Bryers lives not far from Bangerter but in a less desirable part of Remuera, near the Newmarket border and within roar distance of the southern motorway. The big house and its swimming pool sits on a 2190sqm section and the property has a 2005 rating valuation of $2.38m.

However, the property is on a leasehold title and the land is owned by The Dilworth Trust Board, which means Bryers' family trust owns the house but not the land it sits on.

The house on its own has a rating valuation of $510,000 but the three mortgages over the property, one to Kiwibank, one to Lombard Finance & Investments and one to Lombard Nominees, bear testament to Bryers' extensive business activities.

Until recently Bryers could often be seen emerging from the latest Aston Martin sports car at Blue Chip's corporate offices in the Qantas building on Auckland's Queen St, but when the Sunday Star-Times caught up with him last week he was driving a 2006 Mercedes 600 saloon.

For recreation Bryers and Bangerter like to indulge in a round of golf at the Gulf Harbour Country Club north of Auckland, which Bryers owns and on which he has plans to develop a new resort hotel. However, that property has two mortgages over it one to Perpetual Trust and the other to FP Holdings, which is part of the troubled MFS Group for "unlimited" amounts of money.

Bryers has also pledged up to $38.1m of any profits he may make from the Gulf Harbour development as a guarantee on a debt owed to Blue Chip Financial Solutions, the ASX-listed umbrella organisation for the Blue Chip group.

Bryers has also offered $25m of the possible profits from a development he has planned to reimburse investors for losses they may have suffered although he gave no details of which property would be involved and how the scheme could work.

Last week as the Commerce Commission and Serious Fraud Office both announced investigations into Blue Chip, Bryers and Bangerter were huddled at Blue Chip's Queen St headquarters. At the same time, boxes of documents were being removed from Bangerter's Blue Chip offices in Parnell and loaded onto a truck.

A Blue Chip staff member loading the boxes said they contained clients' financial records which were being removed for safe keeping.

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Risks: Follow the money: franchising re-distributes (not creates) wealth, Trading when insolvent, Credence goods: taking advantage of the innocents, Ponzi (pyramid) scheme, Predatory franchise lending, Bankruptcies, Asset appraisals inflated, Trust account irregularities, Boxes of documents being removed, Competence, New Zealand, 20080229 Mark and

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