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Peter Joseph Nitschke (32) today pleaded guilty to seven charges under the Crimes Act, following a Serious Fraud Office (SFO) investigation into agri-business, Capehorn Farming Company Limited (Capehorn).

Guilty plea in SFO $2.3 million farming fraud

Peter Joseph Nitschke (32) today pleaded guilty to seven charges under the Crimes Act relating to dishonestly using a document and obtaining by deception.  The charges followed a Serious Fraud Office (SFO) investigation into agri-business, Capehorn Farming Company Limited (Capehorn). 

Capehorn operated a beef cattle fattening farming business in the central and lower regions of the North Island, in which cattle purchases were generally financed through specialist livestock finance companies.  In late 2009 Capehorn fell into financial difficulty as a result of falling beef prices.

The SFO alleged that, in early 2010, Mr Nitschke obtained over $880,000 worth of finance from lenders for cattle that did not exist. The SFO further alleged that he fraudulently sought $1.5 million in refinancing from the BNZ in order to repay loans for the non-existent cattle and for cattle that had already been sold.

Capehorn was placed into receivership by the BNZ in December 2010 at which time PwC were appointed as receivers. The matter was subsequently referred to the SFO in March 2011.   

Mr Nitschke will reappear in the Feilding District Court for sentencing on 20 February 2012.

For further information

Sarah Knowles
Serious Fraud Office
Phone: 021 675 998

Note to editors

Background to investigation

Capehorn Farming Company Limited operated a beef cattle fattening business with farms throughout the central and lower regions of the North Island.

Profits were earned on the difference between the cost of purchasing cattle and the proceeds received from selling the cattle in the future. Cattle purchases were generally financed through specialist livestock finance companies.

Due to falling beef prices in late 2009 and 2010, it is understood that Capehorn found it increasingly difficult to maintain on-going bill payment commitments. Capehorn’s financial difficulties did not improve and by December 2010 the company was placed into receivership by the BNZ.

PwC were appointed receivers and BNZ and PwC subsequently referred the matter to the SFO in March 2011 for investigation.

Crimes Act offences

Section 228: Dishonestly taking or using document
Everyone 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.

Role of 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 operates three investigative teams:

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

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…”

The SFO’s Annual Report 2011 sets out its achievements for the past year, while the Statement of Intent 2011-2014 sets out the SFO’s three year strategic goals and performance standards.  Both are available online at: www.sfo.govt.nz(external link)