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.
1 August 2018: Trial ends with 2 more guilty of $41 million Celestion development fraud
Attribution: SFO release.