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A businessman who enjoyed effective control of a rest home, abusing his friends’ trust to systemically defraud the facility of at least $600,000 before destroying financial records to conceal the extent of his crimes, has been sent to prison.
A judge says the exact amount the man stole is impossible to calculate due to his deception.
And despite the offending occurring a decade ago, the man still cannot be named pending an application to the nation’s highest court.
The man was found guilty in August on 45 dishonesty charges following a two-week trial in the High Court at Auckland.
He appeared for sentencing this morning before Justice Timothy Brewer.
Evidence presented to the jury showed the man siphoned money from the rest home accounts for use on personal expenses such as school fees, Sky TV subscriptions and gym memberships, and to pay contractors working on his and his wife’s dream lifestyle home.
Much of the offending, spanning seven years, involved cashed cheques, payments to third parties or salary overpayments.
He devised an accounting system which saw him intermingle legitimate rest home spending with personal expenses, coding the fraudulent payments to the company’s suppliers to cover his tracks.
The man eventually repaid the money after being forced to sell his lifestyle property following a civil court order before being charged by police in 2019.
He has been fighting to keep his name secret in a bid to retain his land development job dealing with financiers on projects worth $600m. The company also wants his name permanently suppressed to prevent it suffering reputational damage by association with a convicted fraudster.
Justice Timothy Brewer declined to grant the man suppression, saying the public had a right to know about the offender's extensive dishonesty. Photo / NZME
During today’s sentencing, the man’s former business partner and rest home director spoke about the immense fallout from the fraud.
He said he’d counted the man as a close friend, helped him when his previous business failed, and offered him an investment opportunity in the rest home.
When the fraud was uncovered, staff became hostile, mutual friendships broke down and the rest home directors were “victim shamed”.
It took three years to unravel the fraud and track how much money had been stolen, putting the directors’ lives on hold and causing enormous stress and anxiety.
“The fact [the man] covered up his fraud put a handbrake on our lives.
“The matter has taken over 10 years to reach an outcome. The cost in terms of time and lost opportunity has been immeasurable.”
The company was forced to sell shares to repay money owed to Inland Revenue. It also incurred significant legal costs during the protracted civil proceedings, racking up bills of $1.2m.
Another director told the court he felt an overwhelming sense of betrayal and loss of trust.
The directors’ kindness and generosity towards the man “was repaid with deceit, lies and outright theft”.
“We endured loss of confidence from our peers, damage to our business reputations and hostility from our employees.”
The fraud had left the director drained, overly cautious and unable to trust people.
“I feel like I’m liable to get taken advantage of. I ask myself, ‘If someone as close as [the man] could do this to us then how can I trust a complete stranger?’”
Significant time and financial resources were spent “pursuing the truth so you could have your day in court”.
“I feel some satisfaction at finally having you held accountable for what you have done.”
The man’s lawyer, Fletcher Pilditch KC, said his client had an otherwise unblemished record, and had gone on to have a successful career with his current employer.
He asked the court not to lose sight of the man’s positive attributes when passing sentence.
‘The more you did it, the more you felt entitled’
Justice Brewer acknowledged the seven-year delay in police laying charges, and three-year court process.
“You started a new life and advanced in that life, always with the threat of prosecution in the background which could bring it to an end.”
While noting man’s previous good character, Justice Brewer said the offending was “prolonged and premeditated”.
The man had oversight of the rest home accounts and felt he was not being paid enough so began to “dip” into the accounts for “your own needs”.
This became more frequent as the years passed, and accelerated when he and his wife bought land and began building their new home.
“The more you did it, the more you felt entitled.”
The fraud eventually came to light when the rest home missed an IRD payment. The man then stole the company’s financial records from the basement to hide his offending and disposed of his personal computer.
“You knew they would incriminate you,” the judge said. “They have never been recovered.”
Today's suppression arguments were heard in the High Court at Auckland. Photo / File
This made it impossible to calculate how much the man had stolen. The judge settled on a figure of $600,000 to $650,000 but said he believed the actual total was much higher.
Justice Brewer was critical of police’s failure to carry out a proper forensic analysis to determine the exact amount, and said the loss of financial records had worked in the man’s favour.
The man had abused his position and the trust of his friends for personal gain, leaving his ex-business partners to “clean up the mess you left”.
He was sentenced to four years and 10 months’ imprisonment.
Protracted suppression fight
The Herald previously revealed that after stealing the money, the man went on to become a professional in another field at one of the country’s most high-profile firms.
He lost his licence in 2016 due to concerns about his dishonesty when a watchdog ruled he was unfit to practice, only to be reinstated to the profession following a landmark appeal backed by his then-employer.
The man and his then-firm fought unsuccessfully to keep their names secret, arguing publication of their identities would cause undue reputational damage to the company’s national brand.
As the Herald prepared a story naming the man and the company, he abruptly quit the profession and was subsequently charged with 49 counts of fraud. His name has been suppressed ever since to protect his fair trial rights.
Following the guilty verdicts earlier this year, the man sought interim suppression until sentencing in case he received a community sentence that would allow him to continue working for his current employer.
However, Justce Brewer declined the application, ruling there was a clear public interest in the man being identified.
People who had future business dealings with him were entitled to know about his offending and should not have his criminal history concealed from them, the judge said.
The man’s employer appealed against the decision. It knew about the man’s background when it hired him and stood by him after he was charged.
But the company argued it could now suffer significant reputational damage if linked to the man’s fraud convictions, even suggesting some people might think the firm was involved in a “conspiracy” to conceal the man’s crime’s through its ongoing support of the offender.
The company argued it should not be penalised for giving the man a second chance, adding that he had been a model employee during his time with the firm.
