The High Court has ordered Australian crypto investor Daniel Klaus to pay $350,000 in penalties for breaching the Overseas Investment Act in a $4.5 million Hawke's Bay farmland purchase.
"Newcomb illegally acted as a front-person for Klaus."Susan Smith, LINZ Compliance Unit leader
Sources cited
Free
More from regulation
The Government has rescinded October 2025 decisions that would have forced KiwiSaver and other managed funds to report private and unlisted holdings in granular categories on the Disclose Register from March 2027.
Forestry Minister Todd McClay has appointed former Bay of Plenty regional chair Doug Leeder as facilitator to advise Ministers on further support or intervention for forestry in Tairāwhiti, days after Gisborne District Council launched its own independent review of consenting and compliance.
Cabinet has pulled the additional Waitematā Harbour Crossing under direct Crown control and ordered an independent detailed business case, deferring any preferred option until funding, financing and delivery are settled against a tight balance sheet.
The High Court has ordered Australian crypto investor Daniel Klaus to pay $350,000 in penalties for breaching the Overseas Investment Act in a $4.5 million Hawke's Bay farmland purchase.
Justice Layne Harvey delivered the judgment on 8 December 2025. The decision was released publicly in May 2026. The court also imposed penalties on New Zealander Michael Newcomb. The total reached $440,000.
Klaus and Newcomb structured the purchase of 91 hectares of sensitive farmland in northern Hawke's Bay through an associate company and cryptocurrency transaction. They did not obtain required consent under the Overseas Investment Act 2005. The land featured an olive grove.
Both defendants left New Zealand during the subsequent investigation by the LINZ Compliance Unit. Proceedings continued in their absence. Neither Klaus nor Newcomb has acknowledged the penalty decision or made any repayment, according to LINZ.
LINZ Compliance Unit leader Susan Smith stated that Newcomb illegally acted as a front-person for Klaus.
"Mr Newcomb illegally acted as a front-person for Mr Klaus and by doing this breached the Overseas Investment Act." — Susan Smith, LINZ Compliance Unit leader
Justice Harvey emphasised the need for specific deterrence in setting the penalties.
The property was later sold to a New Zealand buyer for $3.1 million. Klaus recorded a $1.4 million loss.
This case forms part of a series of recent High Court enforcement actions by LINZ.
According to the LINZ enforcement register, recent OIO penalties include:
| Case / Date | Penalty (NZD) |
|---|---|
| Real estate agents & companies (Sep 2025) | $961,600 |
| Lawyer — reckless enabling (Feb 2025) | $275,000 |
| Forestry acquisitions without consent (Oct 2024) | $1,685,000 |
| Klaus & Newcomb — Hawke’s Bay farmland (Dec 2025) | $440,000 |
The Overseas Investment (National Interest Test and Other Matters) Amendment Act 2025 and the March 2026 Ministerial Directive Letter took effect in March 2026. According to White & Case analysis of the New Zealand foreign direct investment regime, these changes reversed the prior presumption against foreign direct investment, delegated more decisions to the OIO, and introduced retrospective exemptions.
Enforcement remains active for deliberate breaches involving sensitive rural land and associate structures.
The case signals to Australian investors and those using cryptocurrency or nominee arrangements that evasion of consent requirements will attract substantial personal penalties and public proceedings even after departure from New Zealand.
Market participants should expect continued scrutiny of ownership structures in primary sector land transactions despite the liberalised approval settings.
