SPCS

SOCIETY FOR PROMOTION OF COMMUNITY STANDARDS INC.

Recent white collar criminal sentences

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Michael Swann – 9 years, 6 months

Michael Swann was sentenced to nine years six’ months jail in 2009 for his part in defrauding the Otago District Health Board of $16.9 million. He spent almost $11.6 million on boats, flash cars and properties – buying some with suitcases of cash. A former employee of the health board, Swann was released on parole earlier this year after serving four years and eight months of his sentence. As at July, police had recovered about $3.6 million from Swann, mostly through the sale of assets seized under the Proceeds of Crime Act. Millions of dollars more remain unaccounted for.

Sentencing of other notable white collar criminals – continued [Read more…]

David Ross appeals fraud sentence to victim outrage

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The length of David Ross’ minimum non-parole period is “crushing” says his lawyer, who applied to the Court of Appeal for it to be reduced.

Anger from Ross’ out-of-pocket victims is still very raw as one of the country’s biggest fraudsters appealed against the minimum sentence he must serve in jail before becoming eligible for parole. [Read more…]

Strategic Finance Ltd: “Duped investors want full disclosure”

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Deputy editor of the Fairfax  Business Bureau, Tim Hunter (“Chalkie”) has expressed his doubts today about a statement made by the Financial Marketing Authority (FMA) that six former directors of the Strategic Finance Ltd, who were recently banned for five years from directing a finance company, have ” limited personal assets” (Dompost, June 11, 2014). He implies that it was for this reason that  the FMA took the view that they were unable to contribute anything from their own “piggy banks” to help compensate investors who lost millions due to the company’s collapse, and/or contribute to the settlement made between them and their auditors, and the company’s receivers. He argues: “Most likely, for at least some of them, their assets are held in trusts and arm’s length structures that keep their personal assets to a minimum.”

As examples “Chalkie” highlights the residential addresses given by Strategic Finance directors on the Companies Office website, as required by law, that indicate a wealthy lifestyle with assets held in trust. [Read more…]

Strategic Finance: Former directors barred from directing finance companies for five years

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The auditors and former directors of Strategic Finance Limited have settled civil action brought by the receivers of the failed finance company and agreed to pay $22 million. Some 10,000 Strategic investors owed $367.8 million have already been repaid 10 cents in the dollar, or $36.8 million, and the receiver, PwC’s, John Fisk, still estimates they will get between 12% and 20% of their principal back following the latest settlement.

The settlement will see former directors Kerry Finnigan, Graham Edward Jackson, Marcel Aubrey Lindale, Timothy John Rich, Denis Grenville Thom and David John Wolfenden barred from directing finance companies for five years. [FMA remains of the view that they are likely to have breached their disclosure obligations under the Securities Act see below]

“The terms of the settlement deliver a strong deterrence message and include enforceable undertakings from the directors of Strategic not to act as a director of an issuer of securities to the public for five years,” Belinda Moffat, director of enforcement of the Financial Markets Authority (FMA), said.

But one investor thinks most of those who have lost money will not believe justice has been served, with the directors seeming to have “got away with murder.”

The FMA is refusing to say exactly who will be making the payment. [Read more…]

Offences by bankrupt in relation to management of companies – and penalties

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The Insolvency Act 2006 sets out Offences in relation to the management of companies by those persons who have been adjudicated bankrupt.

Offences in relation to management of companies

436 Offence by bankrupt in relation to management of companies

(1) A bankrupt commits an offence if he or she—

  • (a) acts as a director of a company; or

  • (b) fails without reasonable excuse to comply with section 149.

(2) Despite anything to the contrary in section 25 of the Criminal Procedure Act 2011, the limitation period in respect of an offence under subsection (1) ends on the date that is 2 years after the date on which the offence was committed.

437 Penalties for offence in relation to management of companies

Penalties for offence in relation to management of companies

  • A person who commits an offence under section 436 is liable, on conviction, to imprisonment for a term not exceeding 2 years.

    Note: It is at the Official Assignee’s discretion that prosecution can proceed. S. 438 makes it clear that this can proceed if reasonable grounds are certified by the Crown Solicitor.