SFO withdraws one South Canterbury Finance charge
SFO withdraws one South Canterbury Finance charge
The Serious Fraud Office today announced it was withdrawing a charge of false accounting previously laid against the former Chief Financial Officer of South Canterbury Finance Limited, Graeme Brown.
The charge was withdrawn prior to the appearance of the remaining defendants and commencement of a pre-trial hearing this morning in the Timaru High Court.
SFO Acting Chief Executive Simon McArley said the decision to withdraw the charge against Mr Brown – the only one he was facing in relation to the South Canterbury Finance investigation – followed submissions received on behalf of Mr Brown, reassessment of the evidence held and additional witness interviews.
“We continually review the charges we are bringing to trial to ensure they remain appropriate,” Mr McArley said. “I am acutely conscious that we must continually assess whether the charges we are prosecuting remain both fair and in the public interest. In this case a combination of factors, including clarification of existing evidence, meant that I was no longer satisfied that the available evidence supported this charge to the standard required.”
The trial of the remaining defendants has been set down for 12 March 2014.
In December 2011 the SFO laid 21 charges following a 12-month investigation into the affairs of South Canterbury Finance. The charges alleged offences under the Crimes Act 1961 including: theft by a person in a special relationship; obtaining by deception; false statements by the promoter of a company; and false accounting. The offences carry maximum penalties of between seven and 10 years’ imprisonment.
For further information
Serious Fraud Office
027 705 4550
Note to editors
Background to investigation
Terrance Hutton, Lachie McLeod, Edward Sullivan and Robert White face charges in relation to South Canterbury Finance Limited. The trial is set down to commence on 12 March 2014, in the High Court at Timaru.
Solicitor-General Prosecution Guidelines
The purpose of the Guidelines is “to ensure that the principles and practices as to prosecutions in New Zealand are underpinned by unified values. These values aim to achieve consistency in key decisions and trial practices. If these values are adhered to, New Zealand will continue to have prosecution processes that are open, fair to the defendant, witnesses and the victims of crime, and reflect the proper interests of society.”
THE TEST FOR PROSECUTION
The Test for Prosecution is met if:
(i) The evidence which can be adduced in Court is sufficient to provide a reasonable prospect of conviction – the Evidential Test; and
(ii) Prosecution is required in the public interest – the Public Interest Test.
The Evidential Test must be satisfied before the Public Interest Test is considered. The prosecutor must analyse and evaluate all of the evidence and information in a thorough and critical manner.
THE EVIDENTIAL TEST
A reasonable prospect of conviction exists if, in relation to an identifiable individual, there is credible evidence which the prosecution can adduce before a court and upon which evidence an impartial jury (or Judge), properly directed in accordance with the law, could reasonably be expected to be satisfied beyond reasonable doubt that the individual who is prosecuted has committed a criminal offence.
THE PUBLIC INTEREST TEST
Once a prosecutor is satisfied that there is sufficient evidence to provide a reasonable prospect of conviction, the next consideration is whether the public interest requires a prosecution. It is not the rule that all offences for which there are sufficient evidence must be prosecuted. Prosecutors must exercise their discretion as to whether a prosecution is required in the public interest.
PUBLIC INTEREST CONSIDERATIONS
The predominant consideration is the seriousness of the offence. Where a conviction is likely to result in a significant penalty including any confiscation order or disqualification, then there is a strong public interest for a prosecution. Factors considered in this regard include:
1. Where the defendant was in a position of authority or trust and the offence is an abuse of that position;
2. Where the defendant was a ringleader or an organiser of the offence;
3. Where the offence was premeditated;
4. Where the offence was carried out by a group;
5. Where the offence has resulted in serious financial loss to an individual, corporation, trust person or society;
6. Where there is any element of corruption;
7. Where the defendant has previous convictions, diversions or cautions which are relevant;
8. Where there are grounds for believing that the offence is likely to be continued or repeated, for example, where there is a history of recurring conduct.
Public interest considerations against prosecution include:
1. Where the Court is likely to impose a very small or nominal penalty;
2. Where the offence is not on any test of a serious nature, and is unlikely to be repeated;
3. Where there has been a long passage of time between an offence taking place and the likely date of trial such as to give rise to undue delay or an abuse of process unless:
a. the offence is serious;
b. delay has been caused in part by the defendant;
c. the offence has only recently come to light; or
d. the complexity of the offence has resulted in a lengthy investigation.
4. Where a prosecution is likely to have a detrimental effect on the physical or mental health of a victim or witness;
5. Where the defendant is elderly or a youth;
6. Where the defendant has no previous convictions;
7. Where the defendant was at the time of the offence or trial suffering from significant mental or physical ill-health;
8. Where the victim accepts that the defendant has rectified the loss or harm that was caused (although defendants must not be able to avoid prosecution simply because they pay compensation);
9. Where the recovery of the proceeds of crime can more effectively be pursued by civil action;
10. Where any proper alternatives to prosecution are available.
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