SPCS

SOCIETY FOR PROMOTION OF COMMUNITY STANDARDS INC.

Computer South Ltd finally Struck Off – Funnel for money laundering and fraud

by 1 Comment

Finally, on 24 December 2010, the Registrar of Companies struck off Computer South Ltd (which had its registered office for over 13 years with Checketts McKay Law, Wanaka), from the Companies Office list of registered companies. ‘Directed’ by plumber Peter Bruce Ibbotson since it was incorporated on 20 March 1997, with Iain Grant Fyfe, a partner in Checketts McKay, as one of its three original shareholders and its solicitor; the company continued to ‘trade’ up to as recently as 20 April 2009 when its Annual Return was filed on line by Fiona Browne, agent for Checketts McKay.

 A Serious Fraud Investigation commenced in 2006 into the activities of the real “director” of Computer South Ltd, Michael Andrew Swann, found that it had no assets, no employees and filed no tax returns. It was used by convicted fraudster Swann, a banned company director and bankrupt, as his de facto bank account for laundering millions of dollars he gained by fraud from the tax-payer funded Otago District Health Board, while he was employed there as information technology manager from 2000-2006.

An online record dated 22 September 2006, made by Kathleen Elizabeth Bennett, agent for Checketts McKay, proves that 50% of Computer South shares, personally held by Iain Grant Fyfe, were transferred to Ibbotson,  just days before the Otago DHB suspended their employee Michael Andrew Swann and launched their investigation into his financial activities in early October 2006.  The Serious Fraud Office launched its own inquiry shortly afterwards.

Working closely with solicitor Iain Grant Fyfe, Swann squirrelled away millions of dollars over six years into Central Otago properties purchased by trusts set up by Checketts McKay in the names of people – presumably known to and nominated by Swann.

Convicted fraudster Michael Andrew Swann, who is currently serving a lengthy jail term for fraud, together with his convicted accomplice Kerry Gray Harford, defrauded the Otago District Health Board of $16.9 Million over six years (2000-2006).

Swann, ran Computer South Ltd as his personal de facto bank account for the laundering of millions of dollars of ‘dirty money’ obtained by fraud from the DHB, despite the fact he held no office in the company and held no shares. As a convicted bankrupt Swann was unable to hold shares in or direct any company.

As a banned director it was unlawful for him to play any significant role in the management and/or financial affairs of the company.  The Otago DHB suspended suspended Michael Andrew Swann in early October 2006 for “gross mismanagement of DHB’s IT procurements including delegation of authority and purchasing policies” then fired him.

For further background reading see:

Swann’s Rolls-Royce lifestyle – the evidence. By Stu Oldham. Fri, 10 Dec 2010

http://www.odt.co.nz/news/dunedin/140143/swanns-rolls-royce-lifestyle-evidence
Police seek information on Swann assets. Sat, 25 Sep 2010.

http://www.odt.co.nz/news/dunedin/128160/police-seek-information-swann-assets

NZ White Collar Crime: Two guilty in million-dollar fraud cases

by Leave a Comment

The SPCS contends that some of the more spectacular symptoms that reveal how New Zealand society has lost its moral bearings, include the steady growth in its million dollar white collar crime ‘industry’, involving fraud, bribery, theft, and dishonesty etc. Hitting the headlines with growing regularity it seems, are middle-aged grey-haired balding, or completely bald company directors, who, having been banned by the Registrar of Companies under section 385 of the Companies Act 1993 from directing, managing or promoting a company for up to five years; are subsequenly convicted and sentenced for committing multiple breaches of such banning orders, at the same time having committed serial criminal offences involving fraud etc.

Some having been banned because they pose a serious financial risk to the public because of their mismanagement of company financial matters and/or financial incompetence, despite having a degree or two such as an MBA, deliberately give the ‘the two-fingered salute’ to the Registrar of Companies who imposed the ban on them; caring little about any moral standards, the rule of law or the vulnerability of the public to their financial risk-taking and gross incompetence. Others banned from being directors after being declared bankrupts in the Courts, give the same insulting salute and box on as trumped up ‘directors’, in the self-declared role of “promoter” and/or highly paid “consultant”.

Such flagrant deception when exposed by the Serious Fraud Office (SFO) makes a complete mockery of the sanctions (prohibitions) imposed on such former directors by the Companies Office via the Courts, unless such crimes are severely punished by Judges at sentencing. The SPCS contends that banned company directors who deliberately and knowlingly breach banning orders should be jailed long-term and made to make full reparation. It believes that the vast majority of New Zealanders would probably support this view.

It is reassuring to the public to read in he Dominion Post report of 3 December 2010 that… On 3 December “in Wellington District Court, bankrupt Alan Edwards Wycherley, 52, who had been using the name of clients of a debt management company to get money from an Auckland finance firm, was jailed for three years. He had pleaded guilty to conspiring to defraud, nine charges of running a company while prohibited and two of illegally signing shareholder forms.”

He was one of “two Waikanae men who appeared before the courts the same morning, in unrelated million-dollar fraud cases, in which one falsely claimed a client was terminally ill and the other submitted dodgy loan applications.” Both were sentenced by Judge Behrens.

See full report: 3 December 2010 http://www.stuff.co.nz/dominion-post/news/wellington/4418021/Two-guilty-of-million-dollar-fraud

Ministry targets porn mogul – Herald on Sunday

by Leave a Comment

By David Fisher and Frances Morton. Herald on Sunday Sept. 19, 2010

Steve Crow says he will fight a government inquiry into a possible breach of a management ban following four collapsed businesses.

When Steve Crow embarked on building a homegrown porn empire he vowed he would never lock himself away in a dark room with a fake name. It is this willingness to put his “head above the parapet”, he claims, that has got him into trouble.

On April 16, after the collapse of four of his companies, Crow was banned from managing any business for four years. He was forced to resign his directorships and brought in brother David to run the companies. Crow continued to work in the office as a “consultant”.

Now, the Herald on Sunday has learned the Ministry of Economic Development is looking into whether he has breached the management ban. Anyone convicted for such a breach can face up to five years in jail and fines of up to $200,000.

Crow is fighting back. He’s considering seeking a judicial review and suing the ministry for discrimination. It is the culmination of a lifelong battle with the establishment.

For full story go to: http://www.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=10674407 [Read more…]

Banned Company Directors prone to hubris, humbug and hooliganism

by Leave a Comment

When a company director is prohibited by the Registrar of Companies under section 385 (3) of the Companies Act 1993 from taking part in any matter relating to the directing or management of any company for four years , the Registrar must take action when such a director publicly disregards this prohibition and brazenly flouts the law. Such a director “commits an offence and is liable on conviction to the penalties set out in section 373(4) of this Act…. A person convicted of an offence for failure to comply with the Act… is liable to imprisonment for a term not exceeding 5 years or to a fine not exceeding $200,000.” [Read more…]

Warning to company directors responsible for reckless trading during insolvency

by Leave a Comment

For a company director to allow a company to continue to trade while it is insolvent is a breach of duty under section 135 or 136 of the Companies Act.  It is the duty of a Liquidator to report on any such reckless trading that is uncovered in the course of his or her efforts on behalf of creditors to recover any debts owed once the company is put into liquidation. The identification of reckless trading does give rise to possible civil action from creditors against the directors: creditors who may choose to seek reimbursement from the company for any shortfall in debts owed them. Consider a company that purchases a property for $1.9 million dollars, borrowing all the money to pay the purchase price. A director who finds that the company is unable to meet interest repayments on a first and second mortgage, should realise that a mortgagee sale is inevitable unless he can refinance the loan, source capital from elsewhere or gain assistance from a kindly tooth fairy. If however, the director allows debts to mount up for months due to unpaid interest and persists in carrying out trading operations throughout the period of insolvency, that would constitute reckless trading by the company, for which he is directly responsible. All income gained by the company over the period of insolvency would be subject to a rightful compensation claim be creditors via a civil action in the Court. If the company director failed to produce a credible record of company income deposited in a company bank account over this period, he would have committed an offence under the Companies Act 1993. Directors who fail to file an annual return after an extended period of such reckless trading, should be banned from being company directors. A director who through mismanagement allows two of more of his companies to be put into liquidation is more than likely to be banned as a director by the Ministry of Economic Development under s. 385 of the Companies Act 1993.