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A man in control of a large dairy farming group that collapsed, leaving the Bank of New Zealand with losses of $37.5 million, has been jailed for two and a half years on fraud charges laid by the Serious Fraud Office.
Avon Richard Gillespie, 45, who headed the Gillespie Group, was sentenced in Nelson District Court today on six fraud charges relating to $2.1 million.
The Gillespie Group, which ran a number of large-scale dairy farming businesses in the Buller and Murchison area, went into liquidation at the end of 2005 and beginning of 2006, leaving the BNZ with losses of $37.5 million.
When the SFO investigated, it laid only six charges relating to the loss of $2.1 million; one of using a document with intent to defraud, four of using a document dishonestly with intent to obtain pecuniary advantage and one of theft by a person in a special relationship.
Serious Fraud Office prosecutor Luke Clancy said Gillespie had abused the long-standing business relationship he had with the BNZ, which provided lending and credit services, and if he had revealed the group's financial trouble earlier, the loss suffered by the bank is likely to have been more limited.
Reparation was not a realistic prospect, he said, and the bank was pursuing what remedies it could through civil options.
The charges related to a $930,000 credit facility from the BNZ, which Gillespie used to obtain further documents to prolong and support the original loan. His counsel, John Sandston, said the company got into financial difficulties and Gillespie had endeavoured to keep it going.
"The vast bulk of the money he obtained went to pay creditors that he wanted to see right and keep the business afloat."
Mr Sandston said Gillespie had been a respected businessman who provided employment for a large number of people and who supported many community organisations, including the Murchison Community Hospital, a community hall and the local rugby club.
"He is a very talented individual and has a lot to offer the community. He wants to put this behind him and get back to his family."
Judge Tony Zohrab said the offending struck at the heart of the business relationship and while Gillespie's intention may have been to pay creditors, with no real intent to cause a loss, the bank was misled and he had to be held accountable.
He said it was large scale offending involving significant amounts of money over a period of two and a half years. In sentencing he needed to consider the extent of the loss, the gross lack of trust, the elements of premeditation and concealment, and the repeated offending. However, he gave Gillespie significant credit for his early guilty plea and the money he saved the state as a consequence of the case not going to trial.
Gillespie is currently serving a four and a half year jail term on unrelated charges and Judge Zohrab said it was appropriate he serve a further two and a half years on the fraud charges, taking the total jail sentence to seven years.
- NZPA
