SFO charges proven against property developers

SFO charges proven against property developers

Marcus Julian Friedlander (58) and Ralph Anthony Vuletic (31) have pleaded guilty in the Auckland High Court to charges brought by the Serious Fraud Office (SFO).

They were facing 25 charges under the Crimes Act: attempting to pervert the course of justice, using a document for the purpose of obtaining pecuniary advantage and uttering a forged document. Mr Friedlander will be sentenced on 10 December and Mr Vuletic will be sentenced on 29 November.

The charges were laid against Mr Friedlander and Mr Vuletic in January 2011 in relation creating a false debt to avoid bankruptcy. Mr Friedlander had a failing property development and insurance brokering businesses and was in debt to the tune of over $10 million.

SFO Acting Chief Executive, Mr Simon McArley said "Mr Friedlander and Mr Vuletic executed an elaborate scheme to avoid Mr Friedlander's bankruptcy and short change his creditors. The SFO believes that bringing this behaviour to account goes some way to restoring confidence in the New Zealand legal system, and particularly the fairness of the insolvency regime.

"This marks the end of a nine and a half year investigation and prosecution for the SFO and demonstrates the office's determination and perseverance in cases with strong public interest."

ENDS

For further information

Andrea Linton
Serious Fraud Office
027 705 4550

Note to editors

Background to investigation

Marcus Friedlander was a property developer and insurance broker.

Ralph Vuletic was a budding property developer whose family owned valuable sections of land in Auckland.

Early in 2003, Mr Friedlander had a failing property development and insurance brokering businesses and was in debt to the tune of over $10 million. As a result he was facing potential bankruptcy. Mr Friedlander and Mr Vuletic formulated a scheme to attempt to avoid Mr Friedlander's bankruptcy. Mr Friedlander was to make a proposal to his creditors that he pay them an amount of cents for each dollar he owed them. If accepted by 50 percent of his creditors by value, this would have allowed him to avoid bankruptcy.

To support the claim, Mr Friedlander and Mr Vuletic created a false paper trail of a backdated sale and purchase agreement for a property in Albany, owned by Mr Vuletic, as well as a series of correspondence resulting in Mr Friedlander signing an acknowledgement of debt. In doing so they created a false debt, and increased the percentage support for Mr Friedlander's proposal to his creditors.

Ultimately Mr Friedlander was unsuccessful in his attempt and he was adjudicated bankrupt in 2003.

Crimes Act offences

Pre-October 2003
Section 117 Corrupting juries and witnesses

Every one is liable to imprisonment for a term not exceeding 7 years who-
(a) dissuades or attempts to dissuade a person, by threats, bribes, or other corrupt means, from giving evidence in any cause or matter (whether civil or criminal, and whether tried or to be tried in New Zealand or in an overseas jurisdiction); or
(b) influences or attempts to influence, by threats or bribes or other corrupt means, a member of a jury in his or her conduct as such (whether in a cause or matter tried or to be tried in New Zealand or in an overseas jurisdiction, and whether the member has been sworn as a member of a particular jury or not); or
(c) accepts any bribe or other corrupt consideration to abstain from giving evidence (whether in a cause or matter tried or to be tried in New Zealand or in an overseas jurisdiction); or
(d) accepts any bribe or other corrupt consideration on account of his or her conduct as a member of a jury (whether in a cause or matter tried or to be tried in New Zealand or in an overseas jurisdiction, and whether the member has been sworn as a member of a particular jury or not); or
(e) wilfully attempts in any other way to obstruct, prevent, pervert, or defeat the course of justice in New Zealand or the course of justice in an overseas jurisdiction.]

Section 229A Taking or dealing with certain documents with intent to defraud
Every one is liable to imprisonment for a term not exceeding 7 years who, with intent to defraud,-
(a) Takes or obtains any document that is capable of being used to obtain any privilege, benefit, pecuniary advantage, or valuable consideration; or
(b) Uses or attempts to use any such document for the purpose of obtaining, for himself or for any other person, any privilege, benefit, pecuniary advantage, or valuable consideration.

Section 265 Punishment of forgery
Every one who commits forgery is liable to imprisonment for a term not exceeding 10 years.

Section 266 Uttering forged documents
(1) Every one is liable to imprisonment for a term not exceeding 10 years who, knowing a document to be forged,-
(a) Uses, deals with, or acts upon it as if it were genuine; or
(b) Causes any person to use, deal with, or act upon it as if it were genuine.

(2) For the purposes of this section, a document made or altered outside New Zealand in a manner that would have amounted to forgery if the making or alteration had been done in New Zealand shall be deemed to be a forged document.

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 Annual Report 2011 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