Five Star director sentenced following SFO charges

Media Release
6 June 2012

Five Star director sentenced following SFO charges

Anthony Walpole Bowden (71), a former director of Five Star Consumer Finance Limited (Five Star) was sentenced in the Auckland High Court today to nine months home detention and 100 hours community work after pleading guilty to charges arising from a Serious Fraud Office (SFO) investigation.

Mr Bowden pleaded guilty to charges under the Crimes Act in April, following the SFO investigation into the collapse of Five Star.

Five Star traded as a finance company accepting deposits from the public and investing those deposits in consumer and commercial lending.

Mr Bowden is the third individual to be sentenced in this finance company investigation.

SFO Chief Executive, Adam Feeley says “It is a reflection of the thoroughness of the investigations and the line taken by the courts in recent decisions, that a number of finance company directors are now willing to acknowledge their culpability for their company failures.”

The other three individuals charged were Nicholas George Kirk, Marcus Arthur MacDonald and Neill Allan Williams.

Mr Kirk and Mr McDonald received sentences in December 2010 of two years and eight months imprisonment, and two years and three months imprisonment respectively. Mr Williams has entered a not guilty plea and is awaiting trial.

ENDS

Background to investigation

Five Star Consumer Finance Limited traded as a finance company accepting deposits from the public and investing those deposits in consumer and commercial lending The directors were Anthony Bowden, Nicholas Kirk and Marcus MacDonald. Neill Williams was not appointed as a director of the company but the SFO allege that he was heavily involved in the management of the company.

Five Star was placed into receivership on 29 August 2007 owing approximately 2,100 investors approximately $54 million. The receivers for the companies have to date recovered 22.5 cents for every dollar invested.

Five Star Finance Limited, Five Star Debenture Nominees Limited and Antares Finance Holdings Limited were related companies, and formed the wider Five Star group. The SFO investigation concentrated on transactions entered into between members of the Five Star group and entities related to or controlled by the directors.

Crimes Act offences
Section 220: Theft by person in special relationship
(1) This section applies to any person who has received or is in possession of, or has control over, any property on terms or in circumstances that the person knows require the person—
(a) to account to any other person for the property, or for any proceeds arising from the property; or
(b) to deal with the property, or any proceeds arising from the property, in accordance with the requirements of any other person.
(2) Every one to whom subsection (1) applies commits theft who intentionally fails to account to the other person as so required or intentionally deals with the property, or any proceeds of the property, otherwise than in accordance with those requirements.
(3) This section applies whether or not the person was required to deliver over the identical property received or in the person's possession or control.
(4) For the purposes of subsection (1), it is a question of law whether the circumstances required any person to account or to act in accordance with any requirements.
Section 223: Punishment of theft
Every one who commits theft is liable as follows:
(a) in the case of any offence against section 220, to imprisonment for a term not exceeding 7 years; or
(b) if the value of the property stolen exceeds $1,000, to imprisonment for a term not exceeding 7 years; or
(c) if the value of the property stolen exceeds $500 but does not exceed $1,000, to imprisonment for a term not exceeding 1 year; or
(d) if the value of the property stolen does not exceed $500, to imprisonment for a term not exceeding 3 months.
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.
The Role of the 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. It operates three investigative teams:

• Fraud Detection & Intelligence;
• Financial Markets & Corporate Fraud; and
• Fraud & Corruption.

The 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…”

New Statement of Intent

The SFO’s new Statement of Intent (2012-2015) has just been published and is available online at: www.sfo.govt.nz

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