Second Gisborne finance director pleads guilty

Simon McArley, acting SFO chief executive says 'the tail of finance company prosections" is drawing to an end. Photo / Brett Phibbs

A second director of failed Gisborne finance firm Rockforte pleaded guilty today and the final defendant in the case is due go to trial tomorrow.

Former Rockforte Finance director John Patrick Gardner pleaded guilty to five Crimes Act charges in the High Court at Gisborne today.

Gardner, 60, admitted two charges of theft by a person in a special relationship, two of false statement by promoter and one of obtaining by deception. The charges carry maximum sentences of between seven and 10 years' imprisonment.

Following a 13-month investigation into Rockforte, the Serious Fraud Office last year laid 92 charges against Gardner and two other directors, Colin Mark Simpson and Nigel Brent O'Leary.

Simpson pleaded guilty to nine charges last month and was sentenced last week to 11 months' home detention and 200 hours' community work by Justice Simon France.

O'Leary is due to go to trial tomorrow and faces 31 charges alone.

In the case against the trio, the SFO alleges a significant portion of investors' money was used as a source of funding for the directors' personal business interests in two companies - Gisborne Haulage and Michael Ward 1969, which operated the Jean Jones clothing label throughout New Zealand.

According to the SFO, false reporting led to Rockforte's acceptance in the Crown Retail Deposit Guarantee Scheme, which reimbursed 77 mum-and-dad investors $3.8 million when the company collapsed in 2010.

Receivers said in December last year that the Government was likely to recover less than 3c in the dollar and unsecured creditors - owed $234,070.67 - were likely to get nothing back.

Acting SFO Chief Executive Simon McArley commented on the guilty plea today:

"As the tail of finance company prosecutions draws to an end we need to remain aware of the threat financial crime poses to our economy. SFO's proactive early intervention strategy aims to apply our capability and resources to minimising the impact of the next 'finance company-type' disaster, rather than reacting to it."