Real estate agent admits defrauding government body
A real estate agent has pleaded guilty to fraudulently obtaining commissions from the Selwyn District Council on charges brought by the Serious Fraud Office.
Shirley Johnston obtained 13 commission payments from the Selwyn District Council between March 2007 and July 2015 for work that she did not do. Nearly $150,000 of these payments was transferred into a bank account controlled by her and Stephen Gubb, her husband and business partner.
Ms Johnston received the commissions on 13 land sales as a Phoenix Harcourts agent in Christchurch. However, Ms Johnston was not the real estate agent for these property sales at Izone - a Selwyn District Council business park development located in Rolleston.
Mr Gubb, who was a property consultant at the business park, instructed Buddle Findlay to pay $300,829 in commissions to Phoenix Harcourts which then paid Ms Johnston $149,094 for her purported work.
Ms Johnston has been remanded on bail until sentencing on 20 September at the Christchurch District Court.
Mr Gubb is currently serving a jail sentence of two years and nine months for his part in the fraudulent scheme as well as a separate offence of submitting a false invoice to the Selwyn District Council. He has previously been prosecuted by the SFO on fraud charges involving about $1.18 million. He was convicted and sentenced to four years imprisonment on these charges in December 2003.
For further media information
Serious Fraud Office
027 705 4550
Note to editors
Stephen Rolf Gubb (62) was employed by Hughes Developments Limited as a property consultant. His primary role was to sell Izone land, leases, and design and build packages.
Hughes Developments’ responsibilities included managing the sales of lots of land, the design and development work, and to manage small amounts of repairs and maintenance at Izone, which is a Selwyn District Council business hub located in Rolleston.
Shirley Anne Johnston (66) was a real estate agent at Phoenix Real Estate Limited (Phoenix Harcourts) in Christchurch and business partner and wife of Mr Gubb.
Crimes Act offences
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.
(1A) Every person is liable to imprisonment for a term not exceeding 3 years who, without reasonable excuse, sells, transfers, or otherwise makes available any document or thing capable of being used to derive a pecuniary advantage knowing that, by deception and without claim of right, the document or thing was, or was caused to be, delivered, executed, made, accepted, endorsed, or altered.
(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.
241 Punishment of obtaining by deception or causing loss by deception
Every one who is guilty of obtaining by deception or causing loss by deception is liable as follows:
(a) if the loss caused or the value of what is obtained or sought to be obtained exceeds $1,000, to imprisonment for a term not exceeding 7 years:
(b) if the loss caused or the value of what is obtained or sought to be obtained exceeds $500 but does not exceed $1,000, to imprisonment for a term not exceeding 1 year:
(c) if the loss caused or the value of what is obtained or sought to be obtained does not exceed $500, to imprisonment for a term not exceeding 3 months.
About the SFO
The Serious Fraud Office (SFO) was established in 1990 under the Serious Fraud Office Act.
The SFO is the lead law enforcement agency for investigating and prosecuting serious or complex financial crime, including bribery and corruption.
The presence of an agency dedicated to white collar crime is integral to New Zealand’s reputation for transparency, integrity, fair-mindedness and low levels of corruption.
This work contributes to a productive and prosperous New Zealand and the SFO’s collaborative efforts with international partners also reduce the serious harm that corrupt business practices do to the global economy.
The SFO has two operational teams: the Evaluation and Intelligence team and the Investigations team.
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 2017 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
The SFO Twitter feed is @SFO_NZ