MediaWeb director jailed for fraud

Published

MediaWeb director jailed for fraud

Former director of MediaWeb Limited (MediaWeb), Victor John Clarke, has been sentenced in the Auckland District Court today to three years’ imprisonment.

Charges were laid against Mr Clarke by the Serious Fraud Office (SFO) in September this year. He had faced two false accounting charges, one charge of using a forged document and one charge of obtaining by deception. He pleaded guilty to those charges in October. They related to Mr Clarke’s conduct as a director of MediaWeb where he was responsible for overseeing the accounting and financial aspects of the business.

Mr Clarke falsified financial statements to present a positive picture of MediaWeb’s financial position, created fictitious entries in MediaWeb’s accounting system to obtain money from a lending institution, forged emails, and failed to disclose the true financial position of MediaWeb in order to obtain funding from a Trust.

SFO Director, Julie Read said, “Mr Clarke’s breaches of trust in relation to two separate entities enabled him to obtain funding and access to loan facilities of approximately $2.2 million. The use of such deception to support a business undermines confidence in the small business sector and generally only defers the failure of the business, harming others in the process. Prosecutions such as this by the SFO serve to send a message that this type of conduct is not only detrimental to the perceptions of New Zealand business in general but also serious criminal conduct.”

ENDS

For further information

Andrea Linton
Serious Fraud Office
027 705 4550

Note to editors

Background to investigation

Victor John Clarke was a director and shareholder of MediaWeb.

On 5 March 2014 MediaWeb was placed into receivership and then into liquidation on 21 March 2014.

MediaWeb sold sponsorship and publications to other businesses within New Zealand. Its main source of revenue arose from an annual event celebrating business excellence for which they sold sponsorship and seats. 

Crimes Act offences

Section 260 False Accounting
Every one is liable to imprisonment for a term not exceeding 10 years who, with intent to obtain by deception any property, privilege, service, pecuniary advantage, benefit, or valuable consideration, or to deceive or cause loss to any other person,-
(a) makes or causes to be made, or concurs in the making of, any false entry in any book or account or other document required or used for accounting purposes; or
(b) omits or causes to be omitted, or concurs in the omission of, any material particular from any such book or account or other document; or
(c) makes any transfer of any interest in a stock, debenture, or debt in the name of any person other than the owner of that interest.

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.

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.

About the SFO

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

The SFO operates three operational teams; the Evaluation and Intelligence team along with two investigative teams.

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..."

In considering whether a matter involves serious or complex fraud, the Director may, among other things, have regard to:

  • the suspected nature and consequences of the fraud and/or;
  • the suspected scale of the fraud and/or;
  • the legal, factual and evidential complexity of the matter and/or;
  • any relevant public interest considerations.


The SFO's Annual Report 2014 sets out its achievements for the past year, while the Statement of Intent 2014-2018 sets out the SFO's strategic goals and performance standards. Both are available online at www.sfo.govt.nz