Convicted Belgrave Finance director sentenced

Published

Convicted Belgrave Finance director sentenced

Shane Joseph Buckley (44), former Belgrave Finance Limited (Belgrave) Director, was sentenced to three years imprisonment today in the Auckland District Court.

Mr Buckley pleaded guilty in May to 19 charges laid by the Serious Fraud Office (SFO) of theft by a person in a special relationship, and four charges of false statement by promoter under the Crimes Act. He also pleaded guilty to one Securities Act charge of making an untrue statement and one Companies Act charge of making a false statement to a trustee which had been brought by the Financial Markets Authority (FMA) in a joint prosecution.

The charges related to more than $18 million of loans made by Belgrave to various entities between June 2005 and March 2008.

SFO Chief Executive, Adam Feeley, said "While there may be understandable fatigue in some quarters with yet another finance company sentencing, it is important to the integrity of law enforcement to ensure that the legal system holds those responsible to account for their financial crimes. There are many new financial crimes that the SFO is progressively investigating, but these investigations will not be at the expense of successfully resolving the long tail of finance company prosecutions."

Earlier this year, former Belgrave Finance Director, Stephen Charles Smith (43), and an associate, Raymond Tasman Schofield (49), were committed for trial on similar charges. The trial date is set for 29 April 2013.

ENDS

For further information

Andrea Linton
Serious Fraud Office
027 705 4550

Note to editors

Background to investigation

Belgrave Finance Limited was incorporated in September 2000.

Belgrave Finance provided financial accommodation and mortgage facilities for commercial and residential property developments. Funds for lending were sourced primarily from the issue of securities to the public in the form of debenture stock and convertible capital notes.

Belgrave Finance was placed into receivership in on 28 May 2008 owing around $22 million to approximately 1,000 investors. The company was placed into liquidation in April 2010 and at the time, was the 20th finance company to collapse in two years.

Following the collapse of Belgrave, the (then) Securities Commission made initial investigations into the company before referring the matter to the SFO in June 2010.

The SFO laid a total of 60 charges against Shane Joseph Buckley, Stephen Charles Smith (43) and Raymond Tasman Schofield (49), alleging the defendants misrepresented to investors how their investments in Belgrave Finance would be used, and subsequently used those funds in an unauthorised manner.

Crimes Act offences

Section 220: Theft by person in special relationship
(1) This section applies to any person who has received or is in possession of, or has control over, any property on terms or in circumstances that the person knows require the person-
(a) to account to any other person for the property, or for any proceeds arising from the property; or
(b) to deal with the property, or any proceeds arising from the property, in accordance with the requirements of any other person.

(2) Every one to whom subsection (1) applies commits theft who intentionally fails to account to the other person as so required or intentionally deals with the property, or any proceeds of the property, otherwise than in accordance with those requirements.

(3) This section applies whether or not the person was required to deliver over the identical property received or in the person's possession or control.

(4) For the purposes of subsection (1), it is a question of law whether the circumstances required any person to account or to act in accordance with any requirements.
Section 223: Punishment of theft
Every one who commits theft is liable as follows:
(a) in the case of any offence against section 220, to imprisonment for a term not exceeding 7 years; or
(b) if the value of the property stolen exceeds $1,000, to imprisonment for a term not exceeding 7 years; or
(c) if the value of the property stolen exceeds $500 but does not exceed $1,000, to imprisonment for a term not exceeding 1 year; or
(d) if the value of the property stolen does not exceed $500, to imprisonment for a term not exceeding 3 months.

Section 242: False statement by promoter, etc
(1) Every one is liable to imprisonment for a term not exceeding 10 years who, in respect of any body, whether incorporated or unincorporated and whether formed or intended to be formed, makes or concurs in making or publishes any false statement, whether in any prospectus, account, or otherwise, with intent-
(a) to induce any person, whether ascertained or not, to subscribe to any security within the meaning of the Securities Act 1978; or
(b) to deceive or cause loss to any person, whether ascertained or not; or
(c) to induce any person, whether ascertained or not, to entrust or advance any property to any other person.

(2) In this section, false statement means any statement in respect of which the person making or publishing the statement-
(a) knows the statement is false in a material particular; or
(b) is reckless as to the whether the statement is false in a material particular.

FMA charges
1 charge of making an untrue statement in an advertisement (s58(1) Securities Act 1978) for which the maximum penalty is 5 years' imprisonment; and

1 charge of making a false statement to a trustee (s377 Companies Act 1983) for which the maximum penalty is 5 years imprisonment.

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 Statement of Intent 2012-2015 sets out the SFO's three year strategic goals and performance standards. It is available online at: www.sfo.govt.nz