Upper Hutt College victim of serious fraud

Upper Hutt College victim of serious fraud

The Serious Fraud Office (SFO) has laid charges against Donald John Hancox (68) in the Wellington District Court.

The retired Executive Officer from Upper Hutt College first appeared on 30 May facing 10 Crimes Act charges of ‘Obtaining by deception'. Interim name suppression has been in place until today.

Mr Hancox pleaded guilty to all 10 charges today in the Hutt Valley District Court.

The SFO prosecution alleges that between the years 2007 to 2014 during periods of building work at Upper Hutt College, Mr Hancox created and submitted false invoices for goods and services from various entities. Mr Hancox then directed payments of those invoices to bank accounts linked or controlled by him. The alleged offending involved 77 invoices and totalled approximately $375,000.

SFO Director, Julie Read said that it wasn't until a contractor voiced concerns about an unpaid invoice that the matter came to the school's attention.

"A common flaw when someone who has control over the approval and payment of invoices and has been committing fraud is that gaps can appear in their ‘system' when they are not around. In this case, Mr Hancox was away when the concerns were raised and anomalies were uncovered so a specialist financial advisor was called in to work through the school's financial position. This demonstrates the importance of a segregation of duties in this area."

Mr Hancox will next appear in the Hutt Valley District Court for sentencing on 13 July.

ENDS

For further media information

Andrea Linton
Serious Fraud Office
027 705 4550

Note to editors

Background to investigation

Donald John Hancox was the Executive Officer at Upper Hutt College from 1994 until he retired in December 2014. In his role he was responsible for the day to day financial management of the school including approval of invoices for payment and preparation of annual accounts.

Crimes Act offences

Section 240 Obtaining by deception or causing loss by deception
(1) Every one is guilty of obtaining by deception or causing loss by deception who, by any deception and without claim of right,-
(a) obtains ownership or possession of, or control over, any property, or any privilege, service, pecuniary advantage, benefit, or valuable consideration, directly or indirectly; or
(b) in incurring any debt or liability, obtains credit; or
(c) induces or causes any other person to deliver over, execute, make, accept, endorse, destroy, or alter any document or thing capable of being used to derive a pecuniary advantage; or
(d) causes loss to any other person.

(1A) Every person is liable to imprisonment for a term not exceeding 3 years who, without reasonable excuse, sells, transfers, or otherwise makes available any document or thing capable of being used to derive a pecuniary advantage knowing that, by deception and without claim of right, the document or thing was, or was caused to be, delivered, executed, made, accepted, endorsed, or altered.

(2) In this section, deception means-
(a) a false representation, whether oral, documentary, or by conduct, where the person making the representation intends to deceive any other person and-
 (i) knows that it is false in a material particular; or
 (ii) is reckless as to whether it is false in a material particular; or
(b) an omission to disclose a material particular, with intent to deceive any person, in circumstances where there is a duty to disclose it; or
(c) a fraudulent device, trick, or stratagem used with intent to deceive any person.

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 2015 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