A former Managing Director and a former General Manager from the retail gas industry have been sentenced in the Wellington District Court today in relation to Crimes Act charges laid by the Serious Fraud Office.
Former gas industry managers imprisoned
A former Managing Director and a former General Manager from the retail gas industry have been sentenced in the Wellington District Court today in relation to Crimes Act charges laid by the Serious Fraud Office (SFO).
Ronald Peter Rosenberg (72) and Sydney Lio Hunt (46) were found guilty in April this year of dishonestly using documents involving at least $9.75 million of fraud.
Mr Rosenberg has been sentenced to three years' imprisonment and $400,000 reparation and Mr Hunt has been sentenced to three and a half years' imprisonment.
The pair had faced 82 criminal charges following an investigation into retail gas supplier E-Gas Limited (E-Gas).
The investigation uncovered that between April 2005 and October 2008 Mr Rosenberg and Mr Hunt deliberately under-reported the quantity of gas supplied to its retail customers by approximately 950,000 gigajoules.
SFO Director, Julie Read said, "We hope that these sentences send a message that dishonesty, fraud and the manipulation of industry rules on the part of employees in positions of responsibility and trust will not be taken lightly and penalties will be imposed upon those who abuse their authority."
ENDS
For further information
Andrea Linton
Serious Fraud Office
027 705 4550
Note to editors
Background to investigation
Ronald Peter Rosenberg was the Managing Director/CEO and shareholder of E-Gas Limited.
Sydney Lio Hunt was the General Manager and shareholder of E-Gas Limited.
E-Gas was established in 2000 to supply gas to the retail market. In December 2010 the Serious Fraud Office received a complaint about possible inaccuracies between the amounts of gas E-Gas supplied to its customers compared to the amount of gas reported as being used, to gas wholesalers.
Under Gas Industry rules, retailers such as E-Gas are required to book in advance the amount of gas they expect to use in the coming year. Throughout that year, they are required to report actual usage. This is done by submitting data relating to the volume of gas retailers have charged their customers. If actual usage exceeds booked amounts, the retailer will be subject to penalties.
The SFO investigation showed that persons in control of E-Gas deliberately under-reported the quantity of gas supplied by E-Gas to its retail customers, and that they obtained a pecuniary advantage as a consequence. In this case the pecuniary advantage obtained includes gas sold but not paid for, and benefits in the form of avoided penalty payments.
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.
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)