Guilty plea for multiple fraud charges

Published

Guilty plea for multiple fraud charges

John Grant Fagan (54) has entered a guilty plea in the Palmerston North District Court to charges laid by the Serious Fraud Office (SFO).

Mr Fagan was charged in February 2013 and has pleaded guilty to 15 offences under the Crimes Act of false statement by promoter, forgery and using forged documents.

The charges arose out of Mr Fagan's attempts to promote a number of technology and property companies between 2009 and 2011. He used false and forged documents which overstated the value or success of the businesses, in an attempt to encourage people to invest with him. Mr Fagan's actions relate to existing investments of approximately $1.3 million, investments obtained of approximately $750,000 and attempts to obtain investments of approximately $4.5 million from various individuals and entities.

Mr Fagan has previously appeared before the Court on two occasions in relation to fraud offending.

Acting SFO Chief Executive, Simon McArley said, "This current offending has shown Mr Fagan to be a significant risk to the commercial community. I believe it is important that SFO be able to respond effectively to offending like this in order to protect the integrity of our commercial environment and ensure that genuine entrepreneurs and innovators are able to access the capital they require."

Mr Fagan has been remanded on bail and will next appear before the Court on 29 November.

ENDS

For further information

Andrea Linton
Serious Fraud Office
027 705 4550

Note to editors

Crimes Act offences


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.

Section 256 Forgery
(1) Every one is liable to imprisonment for a term not exceeding 10 years who makes a false document with the intention of using it to obtain any property, privilege, service, pecuniary advantage, benefit, or valuable consideration.

(2) Every one is liable to imprisonment for a term not exceeding 3 years who makes a false document, knowing it to be false, with the intent that it in any way be used or acted upon, whether in New Zealand or elsewhere, as genuine.

(3) Forgery is complete as soon as the document is made with the intent described in subsection (1) or with the knowledge and intent described in subsection (2).

(4) Forgery is complete even though the false document may be incomplete, or may not purport to be such a document as would be binding or sufficient in law, if it is so made and is such as to indicate that it was intended to be acted upon as genuine.

Section 257 Using forged documents
(1) Every one is liable to imprisonment for a term not exceeding 10 years who, knowing a document to be forged,-
(a) uses the document to obtain any property, privilege, service, pecuniary advantage, benefit, or valuable consideration; or
(b) uses, deals with, or acts upon the document as if it were genuine; or
(c) causes any other person to use, deal with, or act upon it as if it were genuine.

(2) For the purposes of this section, a document made or altered outside New Zealand in a manner that would have amounted to forgery if the making or alteration had been done in New Zealand is to be regarded as a forged 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