- NZ DISTRIBUTION LIMITED | CIV 2017-404-2824
- NNNM ENTERPRISES LIMITED | CIV 2017-404-2803
- BUILD IT CREW LIMITED | CIV 2017-404-2686
- SOUTH CONSTRUCTION LIMITED | CIV 2017-404-2689
- FAST TRACK NZ LIMITED | CIV 2017-404-2690
- TASTE OF CHINA LIMITED | CIV 2017-404-2645
- JJZ ENTERPRISES LIMITED | CIV 2017-404-2647
- MOUNTAIN VALLEY TRADING CO. LIMITED | CIV 2017-409-915
- FBG DEVELOPMENTS LIMITED | CIV 2017-409-510
- GOLDEN FLEECE SHEEPSKIN MANUFACTURING COMPANY LIMITED | CIV 2017-409-868
Guilty verdicts from MRP referral to the SFO
Paul Kenneth Rose and Jane Clare Rose have been found guilty in the Auckland High Court today of fraud against one of New Zealand's largest power companies.
Crimes Act charges of obtaining by deception were laid by the Serious Fraud Office in August 2014 for alleged fraud against Mighty River Power Limited relating to procurement for the Company's Southdown power station.
Paul Rose was found guilty of nine charges of obtaining by deception and not guilty of one charge of obtaining by deception. Jane Rose was found guilty of eight charges of obtaining by deception.
Paul Rose was employed as an Electrical Engineer at the Southdown power station. He set up companies in the name of Jane Rose (and that of a former partner) to conceal his interest in, and connection to, these companies. He then used these companies to invoice Mighty River Power, first on his own, and later with the assistance of Jane Rose. Mighty River Power was not aware of Paul Rose's interest in these companies and he did not declare the conflict of interest. Payments of approximately $2.2 million were paid to the companies by Mighty River Power.
Paul Rose's offending took place between March 2006 and December 2012 and Jane Rose was involved over a period of time between February 2010 and December 2012.
After an investigation undertaken by Mighty River Power in December 2012 the matter was referred to the SFO.
Director of the Serious Fraud Office, Julie Read said, "While Mr Rose took advantage of gaps in compliance with procurement procedures at Mighty River Power, internal checks and the observations of other staff led to the discovery of Mr Rose's offending. It is important that such matters are reported to the SFO so that perpetrators of fraud can be brought to justice and so that people understand that this sort of conduct is not tolerated in New Zealand."
The defendants will next appear in the Auckland High Court for sentencing on 28 April 2016.
For further media information
Serious Fraud Office
027 705 4550
Background to investigation
Mighty River Power Limited is an electricity retailer and generator, which operates the Waikato Hydro System and five geothermal power stations in the Central North Island.
Paul Kenneth Rose was employed at the Southdown (Penrose) power station in Auckland from November 2001 to December 2012, initially as an Instrumentation and Electrical Technician and subsequently as an Electrical Engineer. Part of Paul Rose's role was to identify what equipment was required to be ordered, or services to be provided, for the operation of the plant.
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.
(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 2015 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
Source: Serious Fraud Office media release