Serious Fraud Office boss Adam Feeley has sought to draw a line under its investigations into finance companies collapses, saying the ”vast bulk” of the work is complete, but a fresh investigation could be on the horizon.

Read the full article on line >>> stuff.co.nz

The amount of investor funds affected by finance companies, funds and mortgage trusts that have collapsed or defaulted since 2006 is well over $8.5 billion.

26 January 2012: Serious Fraud Office Progress of Finance Company investigations

Waipawa Finance: Warren Pickett, former Director Waipawa Finance and Waipawa Holdings, was convicted of six Crimes Act charges relating to false statements by a promoter and misapplication of investor funds, and two charges under the Securities Act. Mr Pickett was sentenced to five years imprisonment.

National Finance: Trevor Allan Ludlow, former director of National Finance 2000 Limited, was convicted of six charges relating to misapplication of investor funds and sentenced to five years and seven months in prison.

John Gray, company accountant, pleaded guilty to three charges relating to misapplication of investor funds and was sentenced to 18 months imprisonment. Sentence was reduced on appeal to nine months home detention.

Bridgecorp: In May 2010, the SFO laid eight charges against Rodney Petricivic and seven charges laid against Robert Roest, relating to misapplication of investor funds, dishonest use of a document and making misleading statements to the company’s trustee. Trial date scheduled for 24 July 2012.

Five Star Finance: In November 2010, Nicholas Kirk, former Director Five Star Finance, pleaded guilty to two charges relating to misapplication of investor funds and was sentenced to two years and eight months in prison.

In October 2010, Marcus McDonald, former Director Five Star Finance, pleaded guilty to two charges relating to misapplication of investor funds and was sentenced to two years and three months in prison.

Seven charges each were also laid against Anthony Bowden and Neil Williams relating to misapplication of investor funds and dishonest use of a document. The trial of Bowden and Williams is scheduled for 18 June 2012.

Capital + Merchant Finance: In December 2010, the SFO laid three charges each against Neil Nicholls and Wayne Douglas relating to misapplication of investor funds and false statements by a promoter.

In July 2011, 4 additional charges relating to misapplication of investor funds were laid against Neil Nicholls and 3 additional charges relating to misapplication of investor funds were laid Wayne Douglas. The four charges were also laid against a third individual, Owen Tallentire. The trial for all charges is scheduled for I6 April 2012.

Belgrave Finance: In September 2011, the SFO laid a total of 60 charges against Raymond Scholfield, Shane Buckley and Stephen Smith relating to misapplication of investor funds and false statements by a promoter. The charges are yet to be committed for trial.

Dominion Finance: In October 2011, the SFO laid a total of 14 charges of misapplication of investor funds against Terence Butler, Barry Whale and Paul Cropp. And one other individual, who’s identity has been suppressed by the Court. The charges are yet to be committed for trial.

South Canterbury Finance: In December 2011, a total of 21charges were laid against Lachie McLeod, Terry Hutton, Graeme Brown and two other persons whose identities has been suppressed by the Court. The charges relate to misapplication of investor funds, obtaining by deception, false accounting and false statements by a promoter. The charges are yet to be committed for trial.

Rockforte Finance: In January 2012, the SFO laid a total of 92 charges Nigel O’Leary, John Gardner and Colin Simpson] relating to relating to misapplication of investor funds, obtaining by deception, false accounting and false statements by a promoter. The charges are yet to be committed for trial.

For further information
Andrea Linton
Serious Fraud Office
Phone: 0277 054 550

Role of the SFO

The Serious Fraud Office (SFO) was established in 1990 under the Serious Fraud Office Act in response to the collapse of financial markets in New Zealand at that time.

The SFO operates three investigative teams:
• Fraud Detection & Intelligence;
• Financial Markets & Corporate Fraud; and
• Fraud & Corruption.

The SFO operates under two sets of investigative powers.

(1). Fraud Detection: Part 1 of the SFO Act provides that it may act where the Director “…has reason to suspect that an investigation into the affairs of any person may disclose serious or complex fraud.”

(2). Fraud Investigation: Part 2 of the SFO Act provides the SFO with more extensive powers where: “…the Director has reasonable grounds to believe that an offence involving serious or complex fraud may have been committed…”

The SFO’s Annual Report 2011 sets out its achievements for the past year, while the Statement of Intent 2011-2014 sets out the SFO’s three year strategic goals and performance standards. Both are available online at: www.sfo.govt.nz

The Serious Fraud Office has laid a total of 92 criminal charges against the three directors of failed Gisborne finance company Rockforte Finance, which collapsed with deposits guaranteed by the Crown retail deposit guarantee scheme and whose receivership is likely to cost the taxpayer the thick end of $3.5 million.

Read the full article on-line >>> NZ Herald – nzherald.co.nz

The liquidator for failed lender Five Star Finance has lost its bid to void a series of transactions worth some $929,000.

In the High Court in Auckland, Associate Judge Roger Bell turned down an application by liquidators Gerald Rea and Paul Sargison of Gerry Rea Partners to void payments by Five Star Finance to Bowden No 14 Trust between September 2006 and August 2007, according to a judgement made earlier this week.

Read the full article on line >>> TVNZ – tvnz.co.nz

Click “Search” to view comprehensive media coverage on Five Star Finance, the result being the chronology of events to this point:
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THE FINANCE COMPANY FIASCO COULD COST EVERY KIWI MORE THAN $300

2012 begins with debenture investors in the collapsed finance companies awaiting final news on the fate of some $2.7 billion they are owed by 45 finance companies in moratorium, receivership or liquidation.

According to the latest reports of the companies the Crown bailed out, taxpayer losses could be anywhere from $695m to $1.5b, or between $157 and $343 for every person in New Zealand.

Read the full article on line >>> stuff.co.nz – Sunday Star Times

Related Item:

The Treasury: Latest News on Claims or Repayments under the Retail Deposit Guarantee Scheme

Litigation involving the biggest alleged corporate fraud in New Zealand’s history is to begin in the South Island on Monday.

Serious Fraud Office charges against five people involved with Timaru-headquartered South Canterbury Finance is scheduled to start at 9am but the public might not be much wiser at the end of the day.

Read the full article on line >>> NZ Herald – nzherald.co.nz

Former Hanover Finance boss Mark Hotchin cut a deal with the tax department after an audit of one of his forestry investments forced him to wind up the companies involved.

Hotchin’s MSH FORESTS LIMITED and subsidiary D F FORESTRY HOLDINGS LIMITED shut up shop in December after the investment companies failed following the Inland Revenue investigation, according to the first liquidators’ report.

Read the full article on line >>> TVNZ – tvnz.co.nz

Click Search to view comprehensive media coverage on Mark Hotchin:
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A long-awaited parliamentary report into finance company failures has recommended fast-tracking a bill making it easier for out-of-pocket investors to take class actions.

Read the full article on line >>> stuff.co.nz

The Serious Fraud Office (SFO) announced today that it has laid 110 charges against seven people alleged to have participated in a loan fraud involving Dunedin-based vehicle finance company, MTF.

Read the full article on line >>> NZ Herald – nzherald.co.nz

The Financial Markets Authority is aiming to decide before Christmas whether to lay prosecutions or drop five of its 16 remaining investigations into the “stench” caused by finance company collapses by Christmas.

The six companies are; Geneva Finance, Mascot Finance, Strata Finance, All Purpose Finance (trading as St Kilda Finance), Direct Property Investments (No.6) and Finance & Leasing.

Read the full article on line >>> NZ Herald – nzherald.co.nz