Whelan guilty of SFO charges

Whelan guilty of SFO charges

Mark James Whelan has entered guilty pleas to 66 charges in the Auckland District Court today in relation to a Serious Fraud Office (SFO) investigation.

The charges were laid in September 2011 for Mr Whelan's principal role in a scheme to defraud Dunedin-based vehicle finance company, Motor Trade Finances Limited (MTF).

He faced 25 individual charges and 41 joint charges of obtaining by deception under the Crimes Act. The 40 year-old unemployed man was formerly an Auckland-based retail dealer for MTF and later a franchisee of the company.

While in those positions and between July 2005 and February 2009, Mr Whelan wrote a number of loans in the names of family, friends and associates using various non-existent assets as security. He obtained loans totalling $4.9 million and used those funds for personal gain, including the purchase of land, servicing of personal debts, and investing in a futures trading scheme, Global Futures Trading Limited (Global Futures).

Three of Mr Whelan's co-accused have already pleaded guilty to related charges laid by the SFO and three other co-accused are facing a trial to be heard in March 2013.

Mr Whelan faces separate charges in relation to his involvement with Global Futures and Derivatek New Zealand Limited.

ENDS

For further information

Andrea Linton
Serious Fraud Office
027 705 4550

Note to editors

Background to investigation

From March 2005 Mark James Whelan was a Retail Dealer for Motor Trade Finances Ltd (MTF), and became a franchisee of the company in January 2008. While Mr Whelan was in those positions he wrote a number of loans in the names of family, friends and associates using various non-existent assets as security. In early 2009 these loans went into default and MTF was unable to locate those assets for repossession. Six other individuals were facing joint charges under the Crimes Act for their roles in obtaining illegal funds under Mr Whelan's scheme, to which three have already pleaded guilty.

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.

(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.

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:

• Evaluation & 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 2012 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