Guilty verdict in SFO fraud case

Published

Guilty verdict in SFO fraud case

Michelle Roberta Innes (59) has been found guilty today in the Auckland District Court to Crimes Act charges laid by the Serious Fraud Office (SFO).

In a trial completed today, Ms Innes had faced 10 charges comprising theft, theft by a person in a special relationship, and theft by person required to account. The charges
carry a maximum term of seven years' imprisonment. Ms Innes was found guilty of all 10 charges.

The SFO investigation, which started in August 2011, found that between 2001 and 2008 Ms Innes used over a million dollars entrusted to her by her sister as well as using a Pauanui property owned by her sister as security for mortgages for her own benefit.

SFO Director, Julie Read said, "Fraudsters often target those close to them where there is a trusted relationship. It is important to ensure that there are proper checks and controls when you entrust your money to others no matter what your relationship with that person might be."
   
Ms Innes has been remanded on bail and will reappear for sentencing on 13 June.

ENDS

For further information

Andrea Linton
Serious Fraud Office
027 705 4550

Note to editors

Background to investigation

Ms Innes' sister moved to Alaska with her husband. They raised a family in the United States. In 1999 the sister began to send US currency back to New Zealand to be held in a US dollar account. The sister asked Ms Innes to set up an account in New Zealand within which the funds were to be held. She placed Ms Innes in control of the funds remitted to New Zealand.

At about the same time the sister purchased a property in Pauanui. She nominated Ms Innes as the purchaser of the Pauanui property. Accordingly, the unencumbered legal title to the Pauanui property was registered in Ms Innes' name. A declaration of trust between both sisters was executed appointing Ms Innes as trustee and the sister as the sole beneficiary of the Pauanui property.

Crimes Act offences

Section 219 Theft or stealing
(1) Theft or stealing is the act of,-
(a) dishonestly and without claim of right, taking any property with intent to deprive any owner permanently of that property or of any interest in that property; or
(b) dishonestly and without claim of right, using or dealing with any property with intent to deprive any owner permanently of that property or of any interest in that property after obtaining possession of, or control over, the property in whatever manner.

(2) An intent to deprive any owner permanently of property includes an intent to deal with property in such a manner that-
(a) the property cannot be returned to any owner in the same condition; or
(b) any owner is likely to be permanently deprived of the property or of any interest in the property.

(3) In this section, taking does not include obtaining ownership or possession of, or control over, any property with the consent of the person from whom it is obtained, whether or not consent is obtained by deception.

(4) For tangible property, theft is committed by a taking when the offender moves the property or causes it to be moved.

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 222 Theft by person required to account
(Pre-October 2003 amendment)
Every one commits theft who, having received any money or valuable security or other thing whatsoever on terms requiring him to account for or pay it, or the proceeds of it, or any part of such proceeds, to any other person, though not requiring him to deliver over in specie the identical money, valuable security, or other thing received, fraudulently converts to his own use or fraudulently omits to account for or pay the same or any part thereof, or to account for or pay such proceeds or any part thereof, which he was required to account for or pay as aforesaid:

Provided that if it is part of the said terms that the money or other thing received, or the proceeds thereof, shall form an item in a debtor and creditor account between the person receiving it and the person to whom he is to account for or pay the same, and that such last-mentioned person shall rely only on the personal liability of the other as his debtor in respect thereof, the proper entry of the amount of the money or proceeds or any part thereof in that account shall be a sufficient accounting for the amount so entered; and in such case no fraudulent conversion of the amount accounted for shall be deemed to have taken place.

About 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.

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 investigative teams:

  • Evaluation and Intelligence;
  • Financial Markets and Corporate Fraud; and
  • Fraud and 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..."

The SFO's Annual Report 2013 sets out its achievements for the past year, while the Statement of Intent 2013-2016 sets out the SFO's three year strategic goals and performance standards. Both are available online at: www.sfo.govt.nz