SFO lays forgery and false document charges

SFO lays forgery and false document charges against former company director

Alan John McMillan appeared at the North Shore District Court today in relation to 21 charges brought by the Serious Fraud Office (SFO). Mr McMillan is the former director of Koru Medical Radiology Limited, a company involved in the provision of x-ray equipment.

The SFO alleged Mr McMillan created false documentation, including financial statements and sale and purchase agreements, with the purpose of overstating the strength of his financial position.

It is alleged that Mr McMillan used those documents to support applications for finance and extensions to overdraft facilities from the Bank of New Zealand, Westpac Bank and Marac Finance Limited.

The quantum of loans obtained by Mr McMillan totals $6.5 million. In addition Mr McMillan obtained overdraft facilities totalling $1.8 million, some of which were extended by the alleged use of false documentation.

Mr McMillan was remanded on bail until 20 May 2011.

For further information

Nick Paterson
General Manager, Fraud and Corruption
Serious Fraud Office
Phone: 021 675647

Note to editors

Case summary

The SFO began this investigation in August 2010 following the receipt of complaints from BNZ and Westpac Bank.

In 2006 Alan John McMillan started up a company involved in the provision of equipment used in Radiology.

Between 2007 and 2010 Mr McMillan obtained a number of loans and finance facilities from BNZ, Westpac and Marac Finance Limited for a mixture of purposes, including two home loans, finance for vehicle purchases and facilities for the provision of equipment used in the running of his businesses.

The SFO alleges that Mr McMillan submitted a number of documents that are false in order to improve the perception of his financial strength and encourage lenders to provide finance.

Offences

Crimes Act 1961, 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.

Crimes Act 1961, Section 256: Forgery

(1) Every one is liable to imprisonment for a term not exceeding 10 years who makes a false document with the intention of using it to obtain any property, privilege, service, pecuniary advantage, benefit, or valuable consideration.

(2) Every one is liable to imprisonment for a term not exceeding 3 years who makes a false document, knowing it to be false, with the intent that it in any way be used or acted upon, whether in New Zealand or elsewhere, as genuine.

(3) Forgery is complete as soon as the document is made with the intent described in subsection (1) or with the knowledge and intent described in subsection (2).

(4) Forgery is complete even though the false document may be incomplete, or may not purport to be such a document as would be binding or sufficient in law, if it is so made and is such as to indicate that it was intended to be acted upon as genuine.

Role of the SFO

The Serious Fraud Office (SFO) was established in 1990 under the Serious Fraud 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 Statement of Intent 2010-2012 sets out the SFO’s three year strategic goals and performance standards.  It is available online at: www.sfo.govt.nz(external link)