Secret kickbacks received for contracts

Secret kickbacks received for contracts

Two former employees of Thermakraft Industries (NZ) Ltd (Thermakraft) have appeared in the Auckland District Court today and pleaded guilty to fraud and corruption charges laid by the Serious Fraud Office (SFO).

Peter Sanele, a former factory manager at Thermakraft, pleaded guilty to one Secret Commissions Act charge of failing to disclose a pecuniary interest in a contract and two representative Crimes Act charges of dishonest use of a document.  Mark Treadwell, a former director and shareholder at Thermakraft, also pleaded guilty to the charge of failing to disclose a pecuniary interest in a contract.

The Secret Commissions Act charge against the pair related to a company in which Mr Sanele and Mr Treadwell had an interest, JMP Transport Ltd (JMP), which supplied freight services to Thermakraft. The defendants secretly received kickbacks for contracts between JMP and Thermakraft.

The two other charges against Mr Sanele related to a company MacPallets, which supplied pallets and other packaging materials to Thermakraft.  Between 2009 and 2013, Mr Sanele submitted 51 false invoices to Thermakraft on behalf of MacPallets.

The total amounts received by Mr Sanele and Mr Treadwell as a result of their offending were $261,030 and $90,000 respectively.

SFO Director, Julie Read said, "Mr Sanele and Mr Treadwell were trusted employees of Thermakraft and obtained these commissions dishonestly by abusing that trust. This is the sort of behaviour that could harm New Zealand's good reputation for low levels of corruption in business."

Mr Sanele and Mr Treadwell have been remanded on bail and will reappear for sentencing on 17 December 2015.

ENDS

For further information

Andrea Linton
Serious Fraud Office
027 705 4550

Note to editors

Background to investigation

Thermakraft has been operating in New Zealand since 1987. It is based in East Tamaki and sells a range of building products throughout New Zealand and worldwide.

Macpallets was set up in 2008 to manufacture and supply new and recycled pallets.

JMP Transport was incorporated in 2012 and supplied transport freight services to Thermakraft.

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.

Secret Commissions Act offences

Section 5 Duty of agent to disclose pecuniary interest in contract
(1) Every agent is guilty of an offence who makes a contract on behalf of his principal and fails to disclose to his principal, at the time of making the contract or as soon as possible thereafter, the existence of any pecuniary interest which the agent has in the making of the contract, unless to the knowledge of the agent the existence of such pecuniary interest is already known to his principal.

(2) For the purposes of this section any pecuniary interest which a parent, husband, wife, civil union partner, de facto partner, child, or partner of the agent has in the making of the contract shall be deemed to be the pecuniary interest of the agent, unless he proves that he had no knowledge of that interest at the time when he made the contract.

(3) For the purposes of this section an agent shall not be deemed to have any pecuniary interest in the making of a contract by reason merely of the fact that he or any person mentioned in the last preceding subsection is a shareholder in an incorporated company having more than 20 members.

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