Archive | Court

Ross & Wehipeihana jailed for Celestion development loan fraud

Property developer Leonard John Ross (52) & Michael James Wehipeihana (46), a small shareholder in Mr Ross’s company that built the Waldorf Celestion apartments hotel in downtown Auckland, were both jailed for over 4 years today for fraudulently obtaining a $41-million development loan for the project.

In the Auckland High Court, Justice Rebecca Edwards sentenced Mr Ross to 4 years & 4 months’ jail, and Mr Wehipeihana to 4 years & 3 months’ jail on charges brought by the Serious Fraud Office.

Mr Ross & Mr Wehipeihana lied to the ANZ Bank NZ Ltd about the number of genuine presales they had made to obtain the development loan for Emily Projects Ltd.

They used forged documents, including sale & purchase agreements, to support the loan application. Later, they used additional forged documents when the apartments were onsold to genuine buyers.

After an 8-week trial, a jury found them guilty in July on all charges they faced – 3 of obtaining by deception & 2 representative charges of using forged documents.

The other 2 men involved in the fraudulent scheme were sentenced to 10 months’ home detention. Vaughn Stephen Foster (56), a self-employed consultant, pleaded guilty to one representative charge of obtaining by deception just before the trial began and was sentenced in June. Timothy Upton Slack (56), a lawyer, pleaded guilty to one representative charge of obtaining by deception on 1 September last year and was sentenced later that month.

The Waldorf Celestion has 2 towers on adjacent sites between Emily Place & Anzac Avenue, containing a total 127 apartments.

Mr Ross, who headed the Paxton Pacific development group, incorporated Emily Projects in July 2008 to develop & sell the Celestion apartments on a site bought from the receivers of Blue Chip Financial Solutions Ltd.

Mr Ross was the director and majority shareholder of Emily Projects.

The Serious Fraud Office said Mr Wehipeihana (46) was Mr Ross’s ‘right-hand man’ at the time of the offending and had a small shareholding in Emily Projects Ltd.

Earlier story:
1 August 2018: Trial ends with 2 more guilty of $41 million Celestion development fraud

Attribution: SFO release.

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Stephen Gubb’s wife sentenced to home detention for joint fraud

Shirley Anne Johnston (66), of Wanaka – wife of twice-jailed fraudster Stephen Gubb – was sentenced yesterday to 7 months’ home detention & 200 hours of community work on charges brought by the Serious Fraud Office.

Ms Johnston, a real estate agent, obtained commissions from the Selwyn District Council that she wasn’t entitled to. The council made the payments for 13 property sales she purportedly organised in relation to Izone, a Selwyn District Council business hub developed in Rolleston, Christchurch.

As an employee of Hughes Developments Ltd, Mr Gubb sold land, leases & design-build packages for Izone. Ms Johnston & Mr Gubb fraudulently obtained over $300,000 in commission payments from the council. Almost half of the money was eventually transferred to a bank account controlled by her & Mr Gubb.

Mr Gubb, in his capacity as a property consultant for Hughes, which was supervising the council development, instructed a law firm to pay commissions to a real estate agency that Ms Johnston worked for. The agency then paid Ms Johnston $149,094 for her purported work as its agent.

She was sentenced at the Christchurch District Court on a single representative charge of “obtaining by deception”.

Mr Gubb, who was her co-defendant, admitted the charges in March and was sentenced in May to 2 years 9 months in jail.

Mr Gubb was sentenced to 4 years’ jail in Auckland in 2003, on Serious Fraud Office charges involving about $1.18 million. Victims then included the property consultancy where he was a director & shareholder, Grafton Group Ltd, and another company where he & his second wife, Helen, were shareholders, Beauford Properties Ltd.

Earlier stories:
12 July 2018: Stephen Gubb’s wife admits role in joint Christchurch fraud
24 May 2018: Gubb jailed for fraud again

Attribution: SFO release.

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Ministry loses case over tree seizure without compensation

The Government has lost a court case over the Ministry of Primary Industries’ decision to seize & destroy over 47,000 fruit trees without compensation.

Estimates of the cost of this action to orchardists ran as high as $1.5 billion.

Waimea Nurseries Ltd, of Nelson, & other tree suppliers sought judicial review of the ministry’s action at a hearing in the Wellington High Court on 16-17 August.

Justice Francis Cooke ruled yesterday that the ministry’s seizure of plants was unlawful without compensation. There was already an interim agreement in place on biosecurity measures excluding seizure, which lasts until 5 working days post-judgment.

According to the court summary of the judge’s decision, the ministry claimed the trees were unauthorised goods because they had obtained biosecurity clearance following the receipt of misleading information.

But Justice Cooke ruled they weren’t unauthorised goods. He held that misleading information must relate to the particular goods, and there was no such information here. He also held that the trees planted in the ground weren’t “goods” because they had become part of the land.

Finally, the judge said the appropriate biosecurity powers in this case were, instead, found in sections 114, 121 & 122 of the Biosecurity Act, which allow for statutory compensation.

The ministry sought to seize, contain or destroy 47,827 trees as unauthorised goods. They’d been tested between 2012-18 by a US institution which subsequently lost its accreditation status after incorrectly reported test results were discovered during an audit.

Link:
23 August 2018: High Court judicial review decision, Waimea Nurseries & others against Director-general for Primary Industries

Attribution: Judicial review decision & summary.

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Steel mesh supplier Brilliance fined for misleading representations

Auckland District Court Judge Robert Ronayne has fined Brilliance International Ltd (Wu Guanghui & Wu Donghui, both of Dannemora, Auckland) $540,000 for making false & misleading representations relating to its steel mesh products which are used to earthquake-strengthen buildings.

Following the judge’s decision, released on Friday, class action legal specialist Adina Thorn encouraged Brilliance steel mesh customers to join a proposed class action against several companies that have supplied non-compliant steel mesh product.

Judge Ronayne sentenced Brilliance on 20 charges brought by the Commerce Commission under the Fair Trading Act. Brilliance pleaded guilty to making false & misleading representations for its 147E steel mesh product, which it marketed & sold as being earthquake grade ‘500E’ steel mesh, between 30 September 2012 & June 2016.

11 charges were for making representations on the Brilliance website that were liable to mislead the public and on product tags that its 147E steel mesh complied with the Australian/NZ Standard for reinforcing steel suitable for structural use in an earthquake zone, when it did not comply.

The other 9 charges related to false & misleading representations on Brilliance’s website that the product had been tested by independent testing laboratory SGS NZ, when it had not. The charges relate to about 35 batches of 147E steel mesh, or 56,125 sheets.

Commission says non-compliance undermines NZ Building Code & Standards

Commerce Commission chair Dr Mark Berry said in response to the judgment: “The safety & durability of New Zealand’s buildings depend on them being constructed with materials that comply with the relevant standards. False & misleading representations about building products are a priority for the commission because compliance with standards is critical to both public confidence & safety,”

Judge Ronayne said in his judgment: “It is self-evident that standards are fundamentally important. The defendants’ conduct… plainly undermined the NZ Building Code & the objectives of NZ Standards in general.

“The defendant’s conduct is highly culpable because its behaviour has left consumers in a position of uncertainty, because it cannot now be known whether all of the [steel mesh] complied. This position of uncertainty is what the free trade agreement and the standard seek to avoid.”

Steel mesh cases

The commission filed charges against a number of companies relating to false & misleading representations about 500E steel mesh. In 500E, the ‘E’ stands for earthquake and the standard specifies strength & ductility (elasticity) requirements for steel reinforcing materials. The standard also specifies the procedures (ie, sampling & testing) that must be followed to produce steel of the specified standard, including:

  • manufacturing methods that must be used by steel manufacturers
  • chemical, mechanical & dimensional requirements of mesh
  • sampling & testing of every batch of mesh
  • identification & labelling of different grades of mesh.

To be sold in New Zealand as 500E grade steel mesh, the mesh must be produced in accordance with the requirements of the standard. If mesh is produced in any other way, it cannot be described as 500E mesh. The Ministry of Business, Innovation & Employment (MBIE) is the building regulator, and sets & enforces the standards & Building Code. The commission can investigate misleading or deceptive claims about compliance with the standard.

Investigations began in 2015

The commission has carried out a series of investigations into steel mesh following a complaint in August 2015. Following its investigations:

Links:
Commerce Commission case register, Brilliance Steel decision
Steel mesh class action

Earlier stories:
27 July 2018: Lawyer says interest in class action grows as steel mesh sentence awaited
26 April 2018: First companies sentenced arising from steel mesh investigation
29 November 2017: Steel & Tube owns up to mesh label & testing guilty pleas
8 June 2017: Updated: Commission files 29 charges against Steel & Tube over mesh
2 November 2016: Steel mesh testing rules tightened
25 April 2016: Commission lifts ‘stop’ on Euro Corp steel mesh
8 April 2016: Steel & Tube undertakes dual mesh testing
5 March 2016: Suppliers recheck as commission questions steel mesh, ministry not worried

Attribution: Decision, commission release, Thorn release.

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Trial ends with 2 more guilty of $41 million Celestion development fraud

An Auckland High Court jury yesterday found the owner of Waldorf Celestion apartment hotel developer Emily Projects Ltd, Leonard John Ross (51), and a small shareholder & representative of it, Michael James Wehipeihana (46), guilty of fraudulently obtaining a large bank loan to build the downtown Auckland block.

Mr Ross & Mr Wehipeihana were convicted on 3 charges of obtaining by deception & 2 representative charges of using forged documents, brought by the Serious Fraud Office.

They made false statements and used forged documents relating to apartment unit purchases to obtain a $41 million development loan from ANZ Bank NZ Ltd to allow Emily Projects to construct the building between Emily Place & Anzac Avenue, on the eastern fringe of Auckland’s central business district.

They’ve been remanded on bail until sentencing on 26 September.

2 other men associated with the project were both sentenced to 10 months’ home detention after each pleaded guilty to one representative charge of obtaining by deception.

The lawyer who acted for Emily Projects, Timothy Upton Slack (56), was sentenced last September. He was adjudicated bankrupt in 2013 and automatically discharged in April 2016.

Vaughn Stephen Foster (56), a self-employed consultant to Emily Projects, pleaded guilty just before the 8-week trial began and was sentenced in June.

Site bought from Blue Chip mortgagee

The site was already controversial, because Mr Ross, who’d developed property for Mark Bryers’ Blue Chip NZ Ltd, acquired the Celestion site at mortgagee sale from a lender to Blue Chip.

A Blue Chip company bought the 1081m² site for $4 million in 2004 and it was transferred in 2006 for $10.9 million to another of Mr Bryers’ companies.

Under Blue Chip, the development was known as the Emily and it was to have had 149 units. 85 were sold and investors paid an estimated $11.2 million in deposits.

Emily Projects bought the property after it was put up for mortgagee sale in 2008 by The NZ Guardian Trust Co Ltd, owed $4.475 million. The purchase price covered the Guardian Trust debt and Guardian Trust stayed in behind ANZ Bank as second mortgagee on the new project.

The Celestion was developed as an apartments hotel, containing 119 non-permanent-stay apartments and run by NZ Waldorf Apartments Ltd. It has 16 levels fronting Anzac Avenue and 18 levels in a second tower on Emily Place.

Emily Projects, 88% owned by Mr Ross, 3% by Mr Wehipeihana, went into voluntary liquidation on 22 December 2011. Liquidators Tim Downes & Greg Sherriff (Grant Thornton) said in their final report in 2015 they’d recovered $610,244 of assets. 2 unsecured creditors claimed $671,000 and 53 investor claims totalled $2,890,951.

The one distribution to unsecured creditors was 11.8c in the dollar for a total $420,310.

Earlier stories:
26 September 2017: Lawyer gets home detention for Celestion project finance deception
12 April 2017: Remand on Celestion development fraud allegations
17 February 2017: SFO alleges fraud in Celestion development loan deal
8 May 2009: Ross’ Emily Projects starts work on ex-Blue Chip site

Attribution: SFO release, Companies Register.

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Lawyer says interest in class action grows as steel mesh sentence awaited

Class action specialist, Auckland lawyer Adina Thorn, said yesterday Steel & Tube Holdings Ltd’s 24 guilty pleas last November relating to false & misleading representations about steel mesh had boosted interest in a proposed class action.

Steel & Tube pleaded guilty in November to 24 of 29 charges laid by the Commerce Commission relating to false & misleading representations concerning 500E earthquake-grade steel mesh. A sentencing hearing was held in the Auckland District Court in May but no sentence has been handed down yet.

Ms Thorn said: “This has led to further owners from across New Zealand signing up for a proposed steel mesh class action against Steel & Tube.

“Our registrations of interest are currently running at a high level and we expect that the sentencing itself will encourage more owners to join the proposed class action against Steel & Tube.

“The proposed action is funded, which means that while funding is in place owners will face no out-of-pocket costs, as all the legal, technical & court costs involved in a claim of this scale will be picked up by the funder in return for them receiving a share of any proceeds of success.”

Ms Thorn said the proposed class action was designed to deliver compensation for the stress & uncertainty for property owners who had ended up with non-compliant steel mesh in their homes & driveways: “The mesh is there forever. Everyone wants to know their home is compliant. Steel & Tube cannot give that assurance – we know the mesh is non-compliant. What we don’t know enough about is performance of that non-complaint mesh in an earthquake. That uncertainty is stressful & unacceptable. We are seeking for owners to be compensated for that.

“This mesh was sold between about March 2012 & April 2016 and much of it was used in the rebuilding of Canterbury following the earthquakes there. However, the mesh people were buying was supposed to be earthquake-grade, when it wasn’t.”

Link: Steel class action

Earlier stories:
23 May 2018: Review puts Steel & Tube ebit loss at $38 million
29 November 2017: Steel & Tube owns up to mesh label & testing guilty pleas
8 June 2017: Updated: Commission files 29 charges against Steel & Tube over mesh
8 April 2016: Steel & Tube undertakes dual mesh testing
5 March 2016: Suppliers recheck as commission questions steel mesh, ministry not worried

Attribution: Thorn release.

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Lau jailed 2 more years for flagrant building site & dwelling breaches

Property developer Ee Kuoh (Augustine) Lau, 43, was sentenced in the Auckland District Court yesterday to 2 years’ jail for transgressing resource management & building laws.

That’s on top of a jail term of 2 months & 2 weeks he’s serving for felling native trees. He was also adjudicated bankrupt on 10 May.

Auckland Council said the 2-year sentence ordered by Judge Craig Thompson was unprecedented, and a strong warning to others who would consider this type of offending. The council said the previous longest jail term handed down under the Resource Management Act was 6 months.

Mr Lau faced 17 charges under the Resource Management Act & 10 under the Building Act, in addition to charges under the Companies Act, for undertaking illegal development of 6 properties around Auckland.

Judge Thompson said Mr Lau had completely ignored risks identified by others, and rejected any suggestion that the offending was impulsive. Rather, it was calculated & long-term.

“The offences he has committed in these instances were committed for financial gain. They were premeditated, he knew exactly what he was setting out to do and he knew that what he was doing was unlawful. He continued to do it nevertheless.”

Charges relate to 6 Lau-managed properties

Mr Lau managed the development of a number of properties around the Auckland region. These charges related to 6 of those properties – the 3 worst in Flat Bush, Paremoremo & Otahuhu.

The property in Flat Bush was allowed a single dwelling under the district plan, but it was converted into 2 dwellings. 2 former classrooms & a relocated house were also moved onto the property. As a result, there were 8 dwellings on the property.

4 were connected to the existing sewerage disposal system, which was overloaded as a result. The other 4 were connected to a newly constructed system which was completely inadequate and discharged raw sewage to a slope above a stream, which was contaminated by the discharge. This discharge area was immediately adjacent to the houses and was unsecured, creating health risks & unpleasant odours for the tenants.

Mr Lau ignored court enforcement orders. As a result, the council said it had to remedy the breaches at its own cost.

At Paremoremo, a property with a single house & a garage was also permitted to have one dwelling & one minor dwelling. Mr Lau took over management of the property, converted the original house into 3 dwellings, the garage into another dwelling, and relocated a house onto the property which was made into 5 dwellings – a total of 9.

Again, almost-raw sewage from a constructed system was discharged onto land where it could have entered a stream, and all related enforcement proceedings were ignored.

At an Otahuhu property Mr Lau managed, 900m³ of earthworks were undertaken without preparation or compaction and without consent. The council said it was unstable & unsafe.

The fill material used included rubbish & debris, and the top layer contained asbestos fibre and fines & fragments of asbestos-containing material. Interim enforcement orders were issued & again ignored. Instead, a pile of material, including more asbestos, was flattened into the site.

Councillor: clear message about illegal antics

Council regulatory committee chair Linda Cooper said: “This strong decision of the court shows that Aucklanders don’t have to put up with illegal antics from dubious developers. It sends a clear message that these actions, which affect things like water quality & public health, are not acceptable and will not be tolerated.

“While the council encourages development to meet the current housing shortage, the rules are there for a reason. Our officers won’t hesitate to take action if you’re doing it illegally, at the expense of the environment.”

Council regulatory compliance manager Steve Pearce welcomed the outcome as it would be a significant deterrent for other property developers tempted to follow Mr Lau’s offending.

“This has been a difficult and significant case that the council has been working on for a number of years. We are pleased to have reached this point and received such a significant penalty from the court.

“We generally take a graduated approach to enforcement and will help people to comply where we can, either by giving advice & warnings first or giving them the opportunity to apply for any consents & permits that might be necessary.

“However, in cases such as this, where there are significant adverse effects and an offender who continually ignores the council’s requests, we will use all of the enforcement tools available to us, including pursuing offenders through the courts.”

Attribution: Council release.

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Stephen Gubb’s wife admits role in joint Christchurch fraud

Shirley Anne Johnston, 66, a Christchurch real estate agent & wife of jailed fraudster Stephen Rolf Gubb, has pleaded guilty to fraudulently obtaining commissions from the Selwyn District Council in Canterbury.

In the Christchurch District Court on Monday, Judge David Saunders remanded Ms Johnston on bail until sentencing on 20 September.

Mr Gubb, 62, a former Auckland property consultant, was jailed for fraud for a second time in May, this time for defrauding the Selwyn District Council over commission payments at its Izone business hub.

Mr Gubb was sentenced to 2 years 9 months in jail after admitting the charges, brought by the Serious Fraud Office. For his first fraud conviction, in Auckland in 2003 on fraud charges involving about $1.18 million, he was sentenced to 4 years’ jail.

The Serious Fraud Office evidence against Ms Johnston was that she obtained 13 commission payments from the Selwyn District Council between March 2007 & July 2015 for work she didn’t do. Nearly $150,000 of these payments was transferred into a bank account controlled by her & Mr Gubb, her husband & business partner.

Ms Johnston received the commissions on 13 land sales as a Phoenix Harcourts agent in Christchurch. However, she wasn’t the real estate agent for these property sales at Izone.

Mr Gubb, who was a property consultant at the business park, instructed Buddle Findlay to pay $300,829 in commissions to Phoenix Harcourts, which then paid Ms Johnston $149,094 for her purported work.

Mr Gubb was jailed for his part in the fraudulent scheme as well as a separate offence of submitting a false invoice to the Selwyn District Council.

Mr Gubb was employed by Hughes Developments Ltd as a property consultant. His primary role was to sell Izone land, leases and design-&-build packages.

Earlier story:
24 May 2018: Gubb jailed for fraud again

Attribution: SFO release.

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“Cynical & deliberate” repossession practices earn Allan Hawkins’ companies fines & refund orders, commission seeks banning orders

2 finance companies headed by former Equiticorp boss Allan Hawkins – Budget Loans Ltd & Evolution Finance Ltd – were fined $720,000 in the Auckland District Court yesterday on 125 charges under the Fair Trading Act.Judge David Sharp also ordered the companies to pay $53,000 emotional harm reparations to 9 victims and $38,000 in refunds & credits to borrowers for repossession tactics he described as “cynical & deliberate”.

The Commerce Commission is seeking banning orders against Mr Hawkins, now 76, and his elder son, Wayne Hawkins, who was also a director at the relevant times, following this sentencing & the earlier conviction of Budget Loans on 34 charges under the Fair Trading Act in 2010.

6 years of misrepresenting repossession rights

The Commerce Commission’s general counsel for competition & consumer, Mary-Anne Borrowdale, set out the companies’ practices. She said that, over 6 years from 2009 until 2014, Budget Loans misrepresented its right to repossess goods and recover interest & costs from borrowers. It also misrepresented amounts borrowers were required to pay under attachment orders and made misrepresentations about the benefits of refinancing existing loans.

Budget bought the distressed loan books of National Finance 2000 Ltd in 2006 and Western Bay Finance Ltd in 2008, and has twice been convicted for its handling of them. After the company was fined in 2010, it undertook to return $500,000 in overcharged interest & fees to borrowers.

In 2016, Budget Loans was convicted on 106 charges but 19 charges were dismissed. The Commerce Commission successfully appealed the dismissal decision, and Budget Loans’ application for leave to appeal to the Court of Appeal was dismissed in November 2017.

Mr Hawkins founded 1980s high-flier, the Equiticorp group. After its demise in the 1987 sharemarket collapse, he & other Equiticorp executives & an advisor were tried in relation to financing arrangements behind the group’s $166 million purchase of NZ Steel Ltd from the Government in 1987. Mr Hawkins was sentenced to 6 years’ jail in 1993.

After yesterday’s court hearing, Ms Borrowdale said: “The court acknowledged today that Budget Loans attempted to create cashflow by getting Western Bay & National Finance borrowers to pay as much as possible for as long as possible. It continually added costs & interest to loans and then repossessed essential goods from borrowers without notice when they couldn’t pay, regardless of whether it was legally entitled to do so.  “The costs of the repossession were, for the most part, higher than the value of the goods and sometimes Budget Loans simply threw repossessed goods away rather than selling them. It also obtained judgments against some borrowers, but continued to add interest & costs and demanded more from borrowers than the courts had awarded, and to misrepresent its right to repossess.

“Where loans were not secured, Budget Loans sought to convince some borrowers to sign new, secured loans by telling them that they would get a discount on their loan balance. However, the amount of the discounted loan was higher than the amount the borrower was actually required to pay.

“Budget Loans’ conduct & misrepresentations kept vulnerable borrowers in a cycle of debt & repossession. It knowingly engaged in illegal repossessions of essential items from people that it knew were already living in hardship. The financial & emotional distress caused by this conduct to borrowers & their families should not be underestimated.”

83 of the charges were for misrepresentations around repossession, including where there was no valid right to repossess a secured item of property, such as a vehicle or household goods, or where there was no outstanding loan balance to be paid.

“In some cases Budget Loans stripped houses almost bare. In other cases, it repossessed items that it should have known were of low value, and dumped them. Its own loan notes include such comments as ‘someone’s great idea to undertake an illegal repo’ and ‘debtor not to know we can’t repo’.”

29 charges were for adding interest & costs to a loan balance after repossession, when that is not allowed under the Credit Repossession Act.

Ms Borrowdale said: “One borrower declared herself bankrupt when told her loan had ballooned from about $9000 to $57,000. In fact she had less than $2500 to pay at that time. 10 charges were for misrepresentations about adding interest to loans, beyond amounts in attachment orders issued by the courts. One borrower’s loan balance was $8600 following an attachment order, but it was ‘recalculated’ to nearly $56,000.”

The final 3 charges were for misrepresentations about the benefits of refinancing with Budget Loans.

Allan Hawkins is now sole director of Budget Finance & its shareholder, Cynotech Securities Ltd. He & his wife, Laurel, own 99.98% of Cynotech.

He is also sole director of Evolution Finance. Its owner, the previously NZX-listed Cynotech Holdings Ltd, went into liquidation in 2013 after close funding supporters decided they’d no longer pay its overhead & infrastructure costs.

Earlier stories:
19 April 2017: Judge told to reconsider 19 dismissed charges against Hawkins loan companies
118 July 2016: Hawkins’ finance companies guilty on loan contract enforcement
 7 December 2014: Commission files criminal charges against 2 Allan Hawkins finance companies
9 November 2013: Commission tells Allan Hawkins’ finance companies to stop repossessions
31 July 2013: Hawkins goes to McDonald Vague for Cynotech liquidation
11 July 2013: Cynotech share trading halted after backers end support
15 June 2011: Cynotech loss increases as it clears decks
12 August 2010: NZX refuses Cynotech request for waiver
11 August 2010: Cynotech suspended
4 August 2010: Cynotech talks departure, NZX talks suspension
28 July 2010: “Welcome letter” from Hawkins’ Budget Loans to National Finance borrowers came with an illegal $15 fee
16 June 2010: Cynotech slips to loss
14 April 2010: Remaining Cynotech shares to move to NZAX
20 January 2010: Hawkins renews Cynotech privatisation bid
23 December 2009: Hawkins withdraws Cynotech bid after Takeovers Panel asks questions
21 April 2008: Cynotech doubles receivables book to $60 million-plus in 4 months
9 October 2006: Allan Hawkins buys National Finance (Payless Cars) loan book

Attribution: Commission release.

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Gubb jailed for fraud again

Former Auckland property consultant Stephen Rolf Gubb, 62, was sentenced to jail for fraud for a second time yesterday, this time for defrauding the Selwyn District Council in Canterbury over commission payments at its Izone business hub.

Mr Gubb admitted the charges in March and had been remanded in custody. In the Christchurch District Court yesterday, Judge David Saunders sentenced him to 2 years 9 months in jail.

For his first fraud conviction, in Auckland in 2003, he was sentenced to 4 years’ jail.

Serious Fraud Office director Julie Read said: “The sentence reflects the seriousness of offending which was not only deliberate, planned & long running, but a repetition of previous offending. Stephen Gubb defrauded a government body of $300,829, took advantage of his position and betrayed the trust his employer had placed in him. Mr Gubb was given an opportunity to rebuild his life following his previous fraud convictions but instead chose to offend again.”

As an employee of Hughes Developments Ltd, Mr Gubb sold land, leases & design-build packages for Izone in Rolleston, Christchurch.

The Serious Fraud Office charged Mr Gubb with fraudulently obtaining 13 commission payments of over $300,000 from the Selwyn District Council between March 2007 & July 2015. Nearly $150,000 of these payments were eventually transferred into a bank account controlled by Mr Gubb & his co-defendant, who has name suppression.

The Serious Fraud Office alleges that the co-defendant was complicit in obtaining the commission payments.

Mr Gubb also obtained $10,500 by submitting an invoice to the council for services that weren’t provided.

Mr Gubb’s previous prosecution by the Serious Fraud Office on fraud charges involved about $1.18 million. Victims then included the property consultancy where he was a director & shareholder, Grafton Group Ltd, and another company where he & his second wife, Helen, were shareholders, Beauford Properties Ltd.

Attribution: SFO release.

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