Realtor sentenced for defrauding local government
A real estate agent has been sentenced to seven months’ home detention and 200 hours of community work on charges brought by the Serious Fraud Office.
Shirley Anne Johnston (66) of Wanaka obtained commissions from the Selwyn District Council that she was not entitled to. The payments were made for 13 property sales she purportedly organised in relation to Izone, a Selwyn District Council business hub development located in Rolleston.
Together with her co-defendant and husband, Stephen Gubb, Ms Johnston fraudulently obtained commission payments of more than $300,000 from the district council. Almost half of the money was eventually transferred to a bank account controlled by her and Mr Gubb.
Mr Gubb, in his capacity as a property consultant for the company that supervised the Selwyn District Councill development, instructed a law firm to pay commissions to a real estate agency that Ms Johnston worked for. The agency then paid Ms Johnston $149,094 for her purported work as its agent.
Ms Johnston was sentenced at the Christchurch District Court on a single representative charge of ‘Obtaining by deception’. 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. Mr Gubb has a previous fraud conviction for which he was sentenced to four years’ imprisonment in December 2003.
For further media information
Serious Fraud Office
027 705 4550
Note to editors
Shirley Anne Johnston (66) was a real estate agent at Phoenix Real Estate Limited (Phoenix Harcourts) in Christchurch and business partner and wife of Stephen Rolf Gubb (62).
Buddle Findlay, acting on representations made by Mr Gubb, made 13 commission payments totaling $300,828.78 (including GST) to Phoenix Harcourts from March 2007 to July 2015.
Mr Gubb 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.
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