Joint agencies achieve first guilty plea in invoice scam operation

Published

Joint agencies achieve first guilty plea in invoice scam operation

One of the defendants arrested in October last year in a major joint enforcement agency operation lead by the Serious Fraud Office (SFO) has pleaded guilty.

Auckland resident Terran Elizabeth Dow (47) entered guilty pleas to five Crimes Act charges in the Wellington District Court this morning.

In conjunction with the New Zealand Police, the Organised and Financial Crime Agency of New Zealand, the Commerce Commission, New Zealand Customs, and Inland Revenue, SFO conducted search warrants and other activity in 25 locations in the North and South Islands last year for an investigation labelled Operation Edit. This joint action by 67 staff resulted in six arrests in an alleged advertising invoice scam.

Ms Dow has been convicted for her part in selling advertising in magazines that were either never printed, or the number of magazines that were printed and circulated was grossly exaggerated. The magazines were generally titled in a way that suggested worthwhile causes in subjects such as road safety, parenting or drug addiction. It is alleged that the scam had generated up to $1.6 million since 2008.

Acting SFO Chief Executive, Simon McArley said, "Operation Edit has been an example of our increasing focus on joint agency activity. Sharing the specialist skills of those agencies results in timeliness and efficiencies in all areas. SFO are still working with the other agencies on Operation Edit as we continue the prosecution of the other defendants."

One defendant, Anthony John Hendon is yet to enter a plea. The three remaining defendants in this matter; Noelene Kay Banton, James Stephen Burns, and Johannes Hendrik Maria Middledorp have been committed for trial.

ENDS

For further information

Andrea Linton
Serious Fraud Office
027 705 4550

Note to editors

Background to investigation

A multi-agency taskforce combining Serious Fraud Office (SFO), the New Zealand Police, the Organised and Financial Crime Agency of New Zealand (OFCANZ), the Commerce Commission, the New Zealand Customs Service, and Inland Revenue was created in May 2012 to combat a long running invoicing scam.

Operation Edit is the first joint investigation of its kind and started following initial coverage by TV3's ‘Campbell Live'.

Crimes Act offences

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.

About 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.

SFO's role is the detection, investigation and prosecution of serious or complex financial crime. 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.

SFO operates three investigative teams:

  • Evaluation and Intelligence;
  • Financial Markets and Corporate Fraud; and
  • Fraud and Corruption.

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..."

SFO's Annual Report 2012 sets out its achievements for the past year, while the Statement of Intent 2013-2016 sets out the SFO's three year strategic goals and performance standards. Both are available online at: www.sfo.govt.nz