SFO acts to prevent alleged fraud

SFO acts to prevent alleged fraud

The Serious Fraud Office (SFO) announced today that it has laid 33 charges in the Auckland District Court against Paul Michael Normington (33) and Jin Weifeng (28), for Crimes Act and Secret Commissions Act offences.

Mr Normington and Mr Weifeng are jointly facing charges of theft, dishonestly using a document and taking secret commissions. Mr Normington also faces a charge of accessing a computer system for dishonest purpose.

The pair allegedly participated in a number of transactions while working for their former employer, the Sutton Group (Sutton). Mr Normington and Mr Weifeng allegedly combined to defraud Sutton either by the creation of false invoices, theft of product or by receiving secret commissions from a supplier of product to Sutton.

Mr Normington also allegedly copied electronic files from the Sutton server for his own benefit to assist him starting his own business in competition with Sutton.

SFO Chief Executive, Adam Feeley, said that the Office made a decision to prosecute on this investigation with efficiency following the initial complaint received in January.

"This is a case about potential loss avoided, rather than actual loss, in an industry that has national importance to New Zealand. This is a good example of how we can be involved in issues prior to a risk crystallising i.e. somewhat further up the cliff, rather than as the ambulance always at the bottom." he said.

ENDS

For further information

Andrea Linton
Serious Fraud Office
027 705 4550

Note to editors

Background to investigation

The Sutton Group (Sutton), is a company based in Auckland. Sutton is a significant producer of dairy products, the majority of which being for export.

Paul Michael Normington was employed as Purchasing Manager at the Sutton Group (Sutton) in September 2008, with a primary role of identifying reputable suppliers, negotiating commercial terms and placing orders to meet the demand for the Sutton plant. He finished at Sutton in December 2011.

Jin Weifeng was employed by Sutton as Purchasing Assistant in November 2008 providing support to his the line manager, Paul Normington. In August 2010 Jin Weifeng was promoted to Warehouse Manager, supervising all staff in the warehouse. He resigned in January 2012.

Crimes Act offences

Section 219 Theft or stealing
(1) Theft or stealing is the act of,-
(a) dishonestly and without claim of right, taking any property with intent to deprive any owner permanently of that property or of any interest in that property; or
(b) dishonestly and without claim of right, using or dealing with any property with intent to deprive any owner permanently of that property or of any interest in that property after obtaining possession of, or control over, the property in whatever manner.

(2) An intent to deprive any owner permanently of property includes an intent to deal with property in such a manner that-
(a) the property cannot be returned to any owner in the same condition; or
(b) any owner is likely to be permanently deprived of the property or of any interest in the property.

(3) In this section, taking does not include obtaining ownership or possession of, or control over, any property with the consent of the person from whom it is obtained, whether or not consent is obtained by deception.

(4) For tangible property, theft is committed by a taking when the offender moves the property or causes it to be moved

Section 223 Punishment of theft
Every one who commits theft is liable as follows:
(a) in the case of any offence against section 220, to imprisonment for a term not exceeding 7 years; or
(b) if the value of the property stolen exceeds $1,000, to imprisonment for a term not exceeding 7 years; or
(c) if the value of the property stolen exceeds $500 but does not exceed $1,000, to imprisonment for a term not exceeding 1 year; or
(d) if the value of the property stolen does not exceed $500, to imprisonment for a term not exceeding 3 months.

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.

Section 249 Accessing computer system for dishonest purpose
(1) Every one is liable to imprisonment for a term not exceeding 7 years who, directly or indirectly, accesses any computer system and thereby, dishonestly or by deception, and without claim of right,-
(a) obtains any property, privilege, service, pecuniary advantage, benefit, or valuable consideration; or
(b) causes loss to any other person.

(2) Every one is liable to imprisonment for a term not exceeding 5 years who, directly or indirectly, accesses any computer system with intent, dishonestly or by deception, and without claim of right,-
(a) to obtain any property, privilege, service, pecuniary advantage, benefit, or valuable consideration; or
(b) to cause loss to any other person.

(3) In this section, deception has the same meaning as in section 240(2).

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.

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 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 Statement of Intent 2012-2015 sets out the SFO's three year strategic goals and performance standards. It is available online at: www.sfo.govt.nz(external link)