Rotorua lawyer found guilty on SFO fraud charges
Rotorua lawyer found guilty on SFO fraud charges
A jury has found Rotorua lawyer John David Rangitauira (59) guilty of obtaining by deception bank loans and funds from a Trust under his control.
Mr Rangitauira was convicted of four charges under the Crimes Act at the Rotorua District Court last night. The charges were brought following an investigation by the Serious Fraud Office (SFO).
Mr Rangitauira was found to have dishonestly obtained funds totalling over $840,000 from Westpac banks and the Te Houoterangi Trust, of which he was a trustee, Chairman and solicitor.
The loans from Westpac were purported to be for “overseas property transactions”. The money was in actual fact directed to various overseas parties involved in an overseas advanced fee fraud, a fact not known to Mr Rangitauira at the time he sent the funds.
The advance fee fraud was based on the premise that there was a US$22.3 million inheritance being held in the Central Bank in Burkina Faso, but that in order to release the money, certain payments were required to be made to the overseas parties. Mr Rangitauira became involved in the scheme when a client approached him asking for assistance in releasing the money.
In return for Mr Rangitauira’s assistance the client agreed to give him a portion of the inheritance, ultimately being an amount of US$5.3 million. As is typical of advance fee frauds, there was no inheritance and all of the money sent overseas was lost.
SFO Chief Executive Adam Feeley says: “Mr Rangitauira held a position of trust and respect within the community, and he took advantage of that position to the very considerable detriment of his victims. It has been a challenging investigation given the position he has held, but we are pleased that decision of the Court vindicates our decision to bring this prosecution.”
The SFO opened its investigation into Mr Rangitauira in February 2009 and laid charges in September 2010. Mr Rangitauira is due to appear in Auckland District Court on 16 December 2011 for sentencing.
For further information
Serious Fraud Office
Phone: 021 675 998
Note to editors
Background to investigation
To raise funds for sending overseas, Mr Rangitauira applied to Westpac bank for a loan. In his application he represented to the bank that the purpose of the loan was to complete an “overseas property transaction”.
As a result of the representations made by Mr Rangitauira, the bank advanced amounts totaling $506,000. The funds were not used for the purpose for which they were obtained, with the majority being remitted overseas to release the purported inheritance.
Mr Rangitauira was also a trustee, Chairman and solicitor of the Te Houoterangi Trust, along with six other trustees, representing over 500 beneficiaries. The Trust is responsible for administering a block of Maori freehold land in Rotorua.
As a trustee and solicitor for the Trust Mr Rangitauira had a duty to disclose all relevant information to the Trust, including his personal interest in the matter. This he failed to do and as a result of the deception he obtained $338,834.48 of the Trusts’ money which he remitted overseas.
Advance Fee Fraud
The money fraudulently obtained by Mr Rangitauira was principally applied to an overseas advanced fee fraud in which he was a victim.
This particular fraud involved the premise that there was an unclaimed US$22.3 million inheritance being held in the Central Bank in the West Africa Nation of Burkina Faso. The money needed to be physically cleaned as it was covered in a black substance. Once cleaned, the person entitled to the inheritance would supposedly receive the full US$22.3 million.
Mr Rangitauira became involved when a client approached him for assistance in releasing this inheritance, which she had been lead to believe she was entitled to. This client appears to be an unwitting catalyst to Mr Rangitauira’s offending. In consideration for Mr Rangitauira’s assistance the client agreed to give him a portion of the inheritance, ultimately being an amount of US$5.3 million.
Over a period of years, Mr Rangitauira communicated with the people involved in the advance fee fraud. They made various representations to him about needing money for fees and cleaning product to clean the money before it could be released. Mr Rangitauira obtained the funds deceptively in order to use the funds to facilitate the release of the purported inheritance.
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:
- 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 Annual Report 2011 sets out its achievements for the past year, while the Statement of Intent 2011-2014 sets out the SFO’s three year strategic goals and performance standards. Both are available online at: www.sfo.govt.nz