Criminal charges laid for theft, dishonesty and forgery

Criminal charges laid for theft, dishonesty and forgery by investment manager

The Serious Fraud Office (SFO) has today laid Crimes Act charges relating to an investigation into the conduct of Linnet Lewis (54) and her associated entities Lewis Administration Limited (LAL) and Align Trust Services Limited (ATSL).

Ms Lewis appeared in the Rotorua District Court to face 16 charges of theft by person in special relationship, five charges of dishonestly taking or using a document and five charges of forgery.

While in a previous role as a Trust Manager, Ms Lewis developed close bonds with several of her clients. When she resigned from that role and set up LAL and ATSL, many of her clients moved with her and she invested their funds on their behalf.

The SFO alleges that clients have lost approximately one million dollars through unauthorised withdrawals of client funds by Ms Lewis between 2005 and 2011. It is further alleged that bank cheques totalling $75,000.00 were drawn from one of her client's bank accounts and subsequently deposited into Ms Lewis' personal accounts. It is also alleged that Ms Lewis forged documents in order to obtain client funds.

SFO Director, Julie Read said, "When an investment manager is given authority to act on a client's behalf, the client should be able to trust that investment services will be provided in a professional manner consistent with the client's expectations."

Ms Lewis is next scheduled to appear on XX.

ENDS

For further information

Andrea Linton
Serious Fraud Office
027 705 4550

Note to editors

Background to investigation

Linnet Lewis was the sole director and shareholder of Lewis Administration Limited and Align Trust Services Limited. Ms Lewis' clients were predominantly retirees who she met during her time with a previous employer. LAL and ATSL provided financial services including paying bills, arranging tax returns, managing property portfolios and client investments.

Ms Lewis was not a registered financial service provider or an Authorised Financial Advisor.

On 7 June 2012 the Rotorua Police referred their investigation into the affairs of Linnet Lewis and her associated entities (Lewis Administration Limited and Align Trust Services Limited) to the Serious Fraud Office.

On 12 June 2012 an investigation was commenced into the affairs of Linnet Lewis under Part I of the SFO Act. It was upgraded to a Part II investigation on 20 August 2012.

Crimes Act offences

Section 220 Theft by person in special relationship
(1) This section applies to any person who has received or is in possession of, or has control over, any property on terms or in circumstances that the person knows require the person -
(a) to account to any other person for the property, or for any proceeds arising from the property; or
(b) to deal with the property, or any proceeds arising from the property, in accordance with the requirements of any other person.

(2) Everyone to whom subsection (1) applies commits theft who intentionally fails to account to the other person as so required or intentionally deals with the property, or any proceeds of the property, otherwise than in accordance with those requirements.

(3) This section applies whether or not the person was required to deliver over the identical property received or in the person's possession or control.

(4) For the purposes of subsection (1), it is a question of law whether the circumstances required any person to account or to act in accordance with any requirements.

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.

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.

About the SFO

The Serious Fraud Office (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 investigative teams:

• Evaluation and Intelligence;
• Financial Markets and Corporate Fraud; and
• Fraud and Corruption.

The SFO operates under two sets of investigative powers.

Part I 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 II 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..."

The SFO's Annual Report 2013 sets out its achievements for the past year, while the Statement of Intent 2013-2016 sets out the SFO's three year strategic goals and performance standards. Both are available online at: www.sfo.govt.nz(external link)