Four more men sentenced for fraud against Dunedin company

Four more men sentenced for fraud against Dunedin company

Four sentences have been handed down in the Auckland District Court today for fraudulently obtaining loans from Dunedin-based vehicle finance company, Motor Trade Finances Limited (MTF).

The Serious Fraud Office (SFO) laid Crimes Act charges against 40 year-old Mark James Whelan and his associates: 45 year-old Richard Michael Barnett, 51 year-old Brett Royce Donaldson and 37 year-old Jonathan Earle Chiswell in September 2011.
In March this year Mr Whelan entered guilty pleas to 66 charges of obtaining by deception with a total value of $4.9 million, and today has been sentenced to four years and four months' imprisonment.

The three associates who were found guilty by a jury earlier this year were given home detention sentences: Mr Barnett convicted on five charges with a value of $234,000 received 11 months home detention and 200 hours community work, Mr Donaldson convicted on seven charges with a value of $576,000 received 11 months home detention and 200 hours community work and Mr Chiswell convicted on six charges with a value of $671,000 received 11 months home detention and 200 hours community work.

Acting Chief Executive for the SFO, Simon McArley said, "This brings to a successful conclusion the investigation and prosecution of seven individuals. It has been a lengthy and complex case. MTF suffered a significant loss because of the dealings of this group. SFO will continue to focus its efforts on earlier intervention in cases such as this to minimise the cost and impact of offending."

ENDS

For further information

Andrea Linton
Serious Fraud Office
027 705 4550

Note to editors

Background to investigation

From March 2005 Mr Whelan was a Retail Dealer for Motor Trade Finances Ltd (MTF), and became a franchisee of the company in January 2008. While Mr Whelan was in those positions he wrote a number of loans in the names of family, friends and associates using various non-existent assets as security. In early 2009 these loans went into default and MTF was unable to locate those assets for repossession.

The SFO investigation uncovered how between July 2005 and February 2009, Mr Whelan obtained loans totalling $4.9 million and the funds were used for personal gain, including the purchase of land, servicing of personal debts and investing in a futures trading scheme, Global Futures Trading Limited (Global Futures).

Mr Chiswell, Mr Donaldson and Mr Barnett obtained loans from MTF via Mr Whelan. They signed contracts that falsly represented that the loans from MTF were secured against specific assets. These assets did not exist. Mr Barnett obtained loans for approximately $234,000, Mr Donaldson obtained loans for approximately $576,000 and Mr Chiswell obtained loans for approximately $671,000.

Richard Michael Barnett was born on 3 August 1968, and is currently unemployed. During the relevant period of the SFO investigation he was a magazine publisher using the company Worldsport Ltd, and also the sole director of Go Advance Ltd. He has known Mark James Whelan for about 10 years and they were good friends.

Jonathon Earl Chiswell was born on 12 February 1976. During the relevant period he was the sole director of the company Hono Tana Holdings Ltd. He was a good friend with Mr Whelan and with him, used MTF funds to speculate on the property market.

Brett Royce Donaldson was born on 1 October 1961. He previously had his own car dealership under the company name Drive Cars Ltd. He was also the sole director and shareholder of Senroa Ltd. He has known Mr Whelan since around 1999 through obtaining financing for his customers from Auckland Finance.

In total, seven individuals faced charges and were convicted under the Crimes Act in this SFO investigation. Previous sentences already handed down include:

Clark Anthony Lewis - five charges of obtaining funds by deception; guilty plea October 2011; sentenced to eight months home detention and 200 hours community service
Stewart Travis Saunders - one charge of obtaining funds by deception; guilty plea October 2011; sentenced to 100 hours community work
Karl Sean Toussaint - nine charges of obtaining funds by deception; guilty plea February 2012; sentenced to nine months home detention and 200 hours community work.

Crimes Act offences

Section 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.
(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.

Role of 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.

SFO operates three investigative teams:

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

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 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..."

SFO's Annual Report 2012 sets out its achievements for the past year, while the Statement of Intent 2012-2015 sets out the SFO's three year strategic goals and performance standards. Both are available online at: www.sfo.govt.nz(external link)