Final sentences in joint agency operation

Final sentences in joint agency operation

A major joint enforcement agency operation led by the Serious Fraud Office (SFO) has concluded today with the sentencing of Noelene Kay Banton and Johannes Hendrik Maria Middeldorp in the High Court at Wellington.

Ms Banton and Mr Middeldorp were found guilty of dishonestly reproducing documents with intent to deceive following a seven-week trial which ended in April.

Ms Banton received a sentence of 12 months on home detention and 200 hours of community work.

Mr Middeldorp was sentenced to three years' imprisonment.

Labelled Operation Edit, a multi-agency taskforce combining the SFO, the New Zealand Police, the Organised and Financial Crime Agency of New Zealand (OFCANZ), the Commerce Commission, New Zealand Customs Service, and Inland Revenue was established in May 2012 to combat this long running invoicing scam.

The scam involved offenders copying pre-existing advertisements from genuine publications and promising prospective advertisers that similar advertisements would be printed and distributed in magazines to be produced by the defendants. The number of magazines to be circulated was grossly misrepresented. To encourage purchase, the magazines were titled in a way that suggested support of worthwhile causes such as road safety, parenting or family support. The scheme attempted to obtain more than $1 million.

Ms Banton and Mr Middeldorp are two of five defendants convicted in Operation Edit.

SFO Director, Julie Read said, "The sentence reflects the seriousness of the offending which was premeditated, repetitive and long running. This type of offending is also serious because of its capacity to diminish the confidence of those who rely upon New Zealand's reputation as a safe place to invest and do business.

"The SFO would like to thank its partner agencies for their assistance in bringing this matter to a successful conclusion."

ENDS

For further information

Andrea Linton
Serious Fraud Office
027 705 4550

Note to editors

Background to investigation

A multi-agency taskforce combining Serious Fraud Office (SFO), the New Zealand Police, the Organised and Financial Crime Agency of New Zealand (OFCANZ), the Commerce Commission, New Zealand Customs Service, and Inland Revenue was established in May 2012 to combat a long running invoicing scam.

Labelled Operation Edit, the combined operation resulted in the execution of search warrants and other activity in 25 locations in the North and South Islands. This joint action by 67 staff resulted in six arrests.

Crimes Act offences

Section 258 Altering, concealing, destroying, or reproducing documents with intent to deceive
(1) Every one is liable to imprisonment for a term not exceeding 10 years who, with intent to obtain by deception any property, privilege, service, pecuniary advantage, benefit, or valuable consideration, or to cause loss to any other person,-
(a) alters, conceals, or destroys any document, or causes any document to be altered, concealed, or destroyed; or
(b) makes a document or causes a document to be made that is, in whole or in part, a reproduction of any other document.

(2) An offence against subsection (1) is complete as soon as the alteration or document is made with the intent referred to in that subsection, although the offender may not have intended that any particular person should-
(a) use or act upon the document altered or made; or
(b) act on the basis of the absence of the document concealed or destroyed; or
(c) be induced to do or refrain from doing anything.

Section 66 Parties to offences
(1) Every one is a party to and guilty of an offence who-
(a) actually commits the offence; or
(b) does or omits an act for the purpose of aiding any person to commit the offence; or
(c) abets any person in the commission of the offence; or
(d) incites, counsels, or procures any person to commit the offence.

(2) Where 2 or more persons form a common intention to prosecute any unlawful purpose, and to assist each other therein, each of them is a party to every offence committed by any one of them in the prosecution of the common purpose if the commission of that offence was known to be a probable consequence of the prosecution of the common purpose.

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