Joint agency operation receives second guilty plea

Joint agency operation receives second guilty plea

James Stephen Burns (41) has pleaded guilty to Crimes Act charges following a major joint enforcement agency operation (Operation Edit) led by the Serious Fraud Office (SFO).

The Wellington resident faced 14 charges in relation to an advertising invoice scam. The scam involved selling advertising in magazines that were either never printed, or in publications where gross misrepresentations as to the number of magazines to be printed and circulated were made to the advertisers. The magazines were generally titled in a way that suggested worthwhile causes in subjects such as road safety or parenting. It is alleged that the scam had generated up to $1.6 million since 2008.

SFO Director, Julie Read said, "The SFO will continue work closely with our fellow agencies on Operation Edit as we proceed with the prosecution of the other defendants."

Terran Elizabeth Dow entered guilty pleas in July 2013 and was sentenced in October 2013. The three remaining defendants in this matter; Anthony John Hendon, Noelene Kay Banton and Johannes Hendrik Maria Middledorp have been committed for trial.

Mr Burns will reappear for sentencing on 19 September.

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, the New Zealand Customs Service, and Inland Revenue was created in May 2012 to combat a long running invoicing scam.

Operation Edit is the first joint investigation of its kind.

Crimes Act offences

Section 98A Participation in organised criminal group
(1) Every person commits an offence and is liable to imprisonment for a term not exceeding 10 years who participates in an organised criminal group-
(a) knowing that 3 or more people share any 1 or more of the objectives (the particular objective or particular objectives) described in paragraphs (a) to (d) of subsection (2) (whether or not the person himself or herself shares the particular objective or particular objectives); and
(b) either knowing that his or her conduct contributes, or being reckless as to whether his or her conduct may contribute, to the occurrence of any criminal activity; and
(c) either knowing that the criminal activity contributes, or being reckless as to whether the criminal activity may contribute, to achieving the particular objective or particular objectives of the organised criminal group.

(2) For the purposes of this Act, a group is an organised criminal group if it is a group of 3 or more people who have as their objective or one of their objectives-
(a) obtaining material benefits from the commission of offences that are punishable by imprisonment for a term of 4 years or more; or
(b) obtaining material benefits from conduct outside New Zealand that, if it occurred in New Zealand, would constitute the commission of offences that are punishable by imprisonment for a term of 4 years or more; or
(c) the commission of serious violent offences; or
(d) conduct outside New Zealand that, if it occurred in New Zealand, would constitute the commission of serious violent offences.

(3) A group of people is capable of being an organised criminal group for the purposes of this Act whether or not-
(a) some of them are subordinates or employees of others; or
(b) only some of the people involved in it at a particular time are involved in the planning, arrangement, or execution at that time of any particular action, activity, or transaction; or
(c) its membership changes from time to time.

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 2014-2018 sets out the SFO's three year strategic goals and performance standards. Both are available online at: www.sfo.govt.nz(external link)