Charges to protect the land of milk and honey

Charges of deception, forgery and lies to protect the land of milk and honey

Charges have been laid by the Serious Fraud Office (SFO) in the Hamilton District Court against Trevor James Lock (54).

Mr Lock was arrested in Morrinsville on 22 December 2015 and appeared in Court to face 11 charges under the Crimes Act of obtaining by deception, four charges of forgery and two charges of dishonestly using a document. He also faces two charges under the SFO Act for obstructing an SFO investigation.

The charges relate to Mr Lock's companies, Nubiotics Limited (Nubiotics) and Nu-Brands Limited (Nu-Brands) that claimed to be distributors of dairy and honey products. Through these entities, Mr Lock entered into a number of contracts to supply product - which he failed to complete. Deposits received under the failed contracts were not repaid and the SFO alleges that the money was used by Mr Lock for personal or other business expenses. The charges relate to customer funds to the value of approximately NZ$1.06 million and USD$48,000.

Nubiotics was placed into receivership in August 2014. Mr Lock still has Nu-Brands in operation.
   
The SFO alleges Mr Lock obtained a pecuniary advantage by evading repayment of customers' deposits, by making false statements concerning production and supply, by forging copies of bank statements and by dishonestly using other documents. It is also alleged that Mr Lock knowingly supplying false information to the SFO.

SFO Director, Julie Read said, "The SFO considers that there is a strong public interest in prosecuting Mr Lock. We believe his offending involved a significant quantum of money, took place over a number of years, was premeditated and repetitive. The SFO's role is to prosecute and deter this sort of offending to protect New Zealand businesses who are operating in an honest and ethical manner."

Mr Lock was remanded on bail without plea and will next appear in the Hamilton District Court on 27 January 2016.

ENDS

For further information

Andrea Linton
Serious Fraud Office
027 705 4550

Note to editors

Background to investigation

Prior to 2001, Mr Lock has a history working in the dairy industry as a scientist in the field of milk powder product development.

From 2001, Mr Lock set up various companies as providers of milk powder and honey products, targeting the Chinese export market. In October 2001 Mr Lock began operating Nubiotics Limited, and in February 2014 after Nubiotics was put into receivership, Mr Lock incorporated Nu-Brands Limited. 

Crimes Act offences

Section 228 Dishonestly taking or using document
Every one is liable to imprisonment for a term not exceeding 7 years who, with intent to obtain any property, service, pecuniary advantage, or valuable consideration,-
(a) dishonestly and without claim of right, takes or obtains any document; or
(b) dishonestly and without claim of right, uses or attempts to use any document.

240 Obtaining by deception or causing loss by deception
(1) Every one is guilty of obtaining by deception or causing loss by deception who, by any deception and without claim of right,-
(a) obtains ownership or possession of, or control over, any property, or any privilege, service, pecuniary advantage, benefit, or valuable consideration, directly or indirectly; or
(b) in incurring any debt or liability, obtains credit; or
(c) induces or causes any other person to deliver over, execute, make, accept, endorse, destroy, or alter any document or thing capable of being used to derive a pecuniary advantage; or
(d) causes loss to any other person.

(1A) Every person is liable to imprisonment for a term not exceeding 3 years who, without reasonable excuse, sells, transfers, or otherwise makes available any document or thing capable of being used to derive a pecuniary advantage knowing that, by deception and without claim of right, the document or thing was, or was caused to be, delivered, executed, made, accepted, endorsed, or altered.

(2) In this section, deception means-
(a) a false representation, whether oral, documentary, or by conduct, where the person making the representation intends to deceive any other person and-
  (i) knows that it is false in a material particular; or
  (ii) is reckless as to whether it is false in a material particular; or
(b) an omission to disclose a material particular, with intent to deceive any person, in circumstances where there is a duty to disclose it; or
(c) a fraudulent device, trick, or stratagem used with intent to deceive any person.

Section 256 Forgery
(1) Every one is liable to imprisonment for a term not exceeding 10 years who makes a false document with the intention of using it to obtain any property, privilege, service, pecuniary advantage, benefit, or valuable consideration.

(2) Every one is liable to imprisonment for a term not exceeding 3 years who makes a false document, knowing it to be false, with the intent that it in any way be used or acted upon, whether in New Zealand or elsewhere, as genuine.

(3) Forgery is complete as soon as the document is made with the intent described in subsection (1) or with the knowledge and intent described in subsection (2).

(4) Forgery is complete even though the false document may be incomplete, or may not purport to be such a document as would be binding or sufficient in law, if it is so made and is such as to indicate that it was intended to be acted upon as genuine.

(5) Every person is liable to imprisonment for a term not exceeding 3 years who, without reasonable excuse, sells, transfers, or otherwise makes available any false document knowing it to be false and to have been made with the intention that it be used or acted on (in New Zealand or elsewhere) as genuine.

SFO Act offences

Section 45 Offence to obstruct investigation, etc
Every person commits an offence, and is liable on conviction,-
(a) in the case of an individual, to imprisonment for a term not exceeding 12 months or to a fine not exceeding $15,000:
(b) in the case of a corporation, to a fine not exceeding $40,000,-
who,-
(c) without lawful justification or excuse, resists, obstructs, or delays any member of the Serious Fraud Office in the exercise of any power conferred by section 9; or
(d) without lawful justification or excuse, refuses or fails to-
  (i) attend before the Director; or
  (ii) answer any question; or
  (iii) supply any information; or
  (iv) produce any document; or
  (v) provide any explanation; or
  (vi) comply with any other requirement,-
as required pursuant to the exercise of any power conferred by section 9; or
(e) in the course of complying with any requirement imposed pursuant to section 5 or section 9, gives an answer to any question, or supplies any information, or produces any document, or provides any explanation, knowing that it is false or misleading in a material particular or being reckless as to whether it is so false or misleading.

About the SFO

The 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's role is the detection, investigation and prosecution of serious or complex financial crime. The SFO's focus is on investigating and prosecuting criminal cases that will have a real effect on:

• business and investor confidence in our financial markets and economy
• public confidence in our justice system and public service
• New Zealand's international business reputation.

The SFO operates three operational teams; the Evaluation and Intelligence team along with two investigative teams.

The SFO operates under two sets of investigative powers.

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."

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..."

In considering whether a matter involves serious or complex fraud, the Director may, among other things, have regard to:

• the suspected nature and consequences of the fraud and/or;
• the suspected scale of the fraud and/or;
• the legal, factual and evidential complexity of the matter and/or;
• any relevant public interest considerations.

The SFO's Annual Report 2014 sets out its achievements for the past year, while the Statement of Intent 2014-2018 sets out the SFO's strategic goals and performance standards. Both are available online at www.sfo.govt.nz