The rise and fall of Michael Colosimo

By Ellen Irvine

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Michael and Sue Dyke considered Michael Colosimo a friend.

They first met him a decade ago at one of his restaurants in Tauranga, and invited him to their home for barbecues.

They looked after his daughter, who was friends with their own, and took her horse riding and to the movies.

He was, they say, "a likeable rogue" with a magnetic personality.

"He was a fun, likeable person, one of those people that was fun to be around because he was always laughing and fun," Mrs Dyke said.

"You know when you meet people at parties who are good fun, he was one of those people."

The Kestrel was haemorrhaging money

So when Colosimo came to the couple with a deal for them to buy the Kestrel floating restaurant in early 2007, they trusted him. That, Mrs Dyke says, was their downfall.

"We trusted him as a reputable businessman, and because we are trusting, law-abiding citizens, we take everyone at face value."

Last week, Colosimo was jailed for two-and-a-half years for forging the financial trading statement he used to sell the Kestrel to the Dykes.

Truth was, the restaurant was haemorrhaging money, and a year after buying it in June 2007 the Dykes put it into voluntary liquidation.

Initially, they couldn't understand why the restaurant they had put their heart and soul into was failing.

But they soon began to suspect they had been cheated.

"It wasn't very long after being in business. My calculator didn't seem to be the same as his calculator," Mrs Dyke said.

"We were questioning things and scratching our heads. We made a number of inquiries, had been speaking to the suppliers, and from what we thought, we were busier [than previously].

"Both [my husband] Michael and I had been in business previously, we were not idiots.

"We didn't know what to think."

It was a chance meeting with accountant Kevin McFadden that brought the shocking truth to light. Mr McFadden had prepared a financial statement for Colosimo about the Kestrel.

"It just so happened we ran into Kevin," Mr Dyke said.

"I made the comment to him 'how did this joint make x, y, z dollars?' He just said 'that's not right, Michael'.

"I said 'I've got it on your letterhead', and I showed it to him.

"He went up to his office [to check the originals] and we went straight to our lawyer."

Colosimo had fiddled the books to show a net profit that was two-and-a-half times bigger than the true figure.

The false document showed a before-tax-and-depreciation net profit of $199,597 for February 1, 2005, to November 30, 2005.

In fact, the true figure was only $82,120.

The Dykes sprang into action, laying a police complaint which would lead to Colosimo being charged with making a false financial document and dishonestly using a false document to obtain a pecuniary advantage.

Last month, four years after the Dykes bought the restaurant and after a trial lasting 11 days, he was found guilty on both charges.

Nothing but a conman

And on Tuesday Colosimo was sent to jail, while continuing to deny any wrongdoing.

Now, the couple think of their former friend with the sparkling personality as nothing but a conman.

"He's one of the best," Mrs Dyke said.

"He had the gift of the gab to say the least."

Asked what she now thinks of Colosimo, Mrs Dyke says: "I don't think you can put that. I just hope he's hurt himself as much as he hurt us."

The couple were thrilled with the guilty verdict. And they were satisfied that Colosimo, who had asked for home detention, was jailed.

"It just restores your faith in justice," Mrs Dyke said.

"We can close the book and move on, start a fresh slate, which is important not only for us but for our family and friends as well."

The effects of the ordeal have been far-reaching for the Dykes. They say it has been financially crippling, and although they would not go into details, it came out in court that they lost their home after it had to be sold to cover some of their losses.

After initially buying the restaurant, they sank a further $150,000 into it to try to keep it afloat. Their son had also lost another $200,000 he put into the business.

"Apart from the financial loss there's the emotional side, there's self-doubt," Mrs Dyke said.

"There's just family embarrassment. It's been gut-wrenching for Michael's parents.

"You feel like you have failed not only as a business person, but as a family, as a parent, as a friend, as a person, because no matter what you did you couldn't see the light at the end of the tunnel."

The Dykes, who have been together for 12 years and married for seven, say the situation put stress and strain on their marriage, but their relationship is strong.

The couple, who have four children between them, say family and friends have kept them strong.

But they also lost friends along the way: "You figure out in times like this who your friends are. Some who you thought were your friends, they only wanted the gossip."

Despite the financial impact on them, the Dykes are determined to recover.

"We will, because we are fighters," Mrs Dyke said. "You have got to be a strong person."

They are pleased they took Colosimo to court, to clear their names but also to ensure Colosimo won't be able to swindle anyone else.

"That's the most important thing. To me, that's justice. Justice is the fact he won't be able to do it to anyone else," Mrs Dyke said.

It was going to be great

Michael Colosimo had been living in Auckland for a number of years before he arrived in Tauranga in 2000.

Australian born, Colosimo quickly established himself in the hospitality scene on The Strand.

He bought a restaurant which was to become Amphora, and was also involved in the The Usual Suspects bar.

"He came to Tauranga, started a restaurant here then just grew from there," Mrs Dyke recalled.

"His whole concept of what he wanted to do was great, it was going to be great for Tauranga. Everyone got on board.

"The sad part about it was he didn't care who he shit on to get where he wanted to achieve.

"There's been so much carnage along the way. There's people other than us that have lost everything, but we are the only ones that have been through the court system.

"He's left a trail of carnage and destruction."

In February 2003, Colosimo opened Imbibe at Bayfair, and a year later he opened The Kingsley Jones with Phil Kingsley Jones and John Harvey, on the site of what is now Cornerstone on The Strand.

But things soon soured at The Kingsley Jones, with Colosimo and Harvey splitting from Phil Kingsley Jones after a difference of opinion.

Staff were told they no longer had jobs and weren't paid, leading to an Employment Relations Authority decision which found Colosimo treated staff like expendable objects and allowed them to be used "as the meat in the sandwich" in the dispute between himself and Mr Kingsley Jones.

In the spotlight for the wrong reasons

Colosimo was ordered to pay a former kitchen hand 7 per cent interest on $306.25 in unpaid wages and holiday pay, as well as $6000 for humiliation and distress and $1000 for failing to record working hours and wages when requested.

He was also ordered to pay the authority $3000. But seven months later the ERA's decision was overturned, with a ruling that the costs should be paid by the company Taffy's Bar Ltd rather than Colosimo. But the judges described Colosimo's involvement and attitude in the matter as "arrogant, high-handed and cavalier".

Meanwhile, Colosimo had bought the Kestrel in May 2004.

He continued to be in the spotlight for the wrong reasons in March 2006, when he was offered police diversion after a charge of common assault. Colosimo had punched a man at The Usual Suspects because he believed the man was spreading rumours about his dispute with Mr Kingsley Jones.

That dispute fired up in April 2006, when it was revealed Mr Kingsley Jones, through his company Nantyglo, was suing the company One Red Dot for $200,000 - the amount of his investment in the pub.

One Red Dot, directed by Colosimo and John Harvey, filed a counter-claim seeking $370,000 for losses suffered in the business.

But Colosimo's troubles didn't stop him - in 2006 he announced plans to develop The Quarry Bar in Te Puna, and opened Marble Bar in Gate Pa, and Rain and Amphora in Papamoa.

Saying he had "too much on his plate", he announced his plans to sell the Kestrel in December 2006.

Shortly after the Dykes bought the floating restaurant in June 2007, Colosimo's company Cervino Holdings went into voluntary liquidation, owing a lot of money to its creditors, from which Colosimo walked away.

Also that year, Colosimo was bought out by his partners of Amphora in Tauranga, and Amphora and Rain in Papamoa. He also sold Imbibe, the Usual Suspects, Cornerstone and the Howick branch of Amphora.

In April 2008, The Quarry Tavern went into receivership and liquidation, and Marble Bar also closed.

The Quarry was operated by Carbonara Enterprises, of which Colosimo had a half share.

The Bay of Plenty Times reported at the time that the company had debts totalling $1.16 million - $330,000 owing to 12 secured creditors, $73,000 to staff and Inland revenue, and $757,000 to 65 unsecured creditors.

Colosimo went into personal bankruptcy in September 2008, with nearly $1 million of personal debts.

In January last year the Bay of Plenty Times reported that two of his companies, Carbonara Enterprises and Corvara Investments, went into liquidation, and according to New Zealand Companies Office records, he has been banned from operating as a director and manager for four years until September 2013.

Relieved at the guilty verdict

Barry Harvey had good reason to celebrate Colosimo's conviction of fraud over the sale of the Kestrel.

Mr Harvey, who had been employed by Colosimo's company, Cervino Holdings Ltd, as office manager, was strung up in court by his former boss as being responsible for the forged documents.

Mr Harvey was relieved at the guilty verdict, and also that the two-and-half year jail sentence reflected the damage caused by Colosimo's lies.

In sentencing, Judge Peter Rollo cited the ongoing effects on the Dykes and other victims, including tarnishing the reputation of Mr Harvey in accusing him of forging the document.

Colosimo, Mr Harvey says, is a narcissist who doesn't like playing by the rules. He was able to thrive in the boom times of the mid-2000s when Tauranga was in a growth period.

"He was becoming fairly prominent in the hospitality industry down on The Strand, and was obviously a mover and shaker in terms of the Kestrel and various other [businesses] that were being set up," Mr Harvey said.

"Tauranga at that stage was going through a very open-minded 'let's do it' think process.

"Guys like Michael thrive in that kind of environment, it's ideal for them. Their personality can over-ride, they don't need to go through regulations and clearance.

"He's a narcissistic personality, there's no doubt about that. These people feel they can do no wrong.

"I think Michael got to a point he was believing he could treat people, make decisions, do things basically [however he wanted]. It's like there's a dark side to Michael."

Mr Harvey said it was clear in court that Colosimo still believed he had done nothing wrong.

But Mr Harvey believed Colosimo's days of trading in Tauranga were over.

He absolutely belittled people

"I can't see him being able to come back and operate in this town in any way, I sincerely hope he doesn't."

Mr Harvey's wife, Jennifer, worked for Colosimo for two years as the functions manager at the Kestrel.

He was, Mrs Harvey says, difficult to work for, and she avoided him as much as possible.

"He was a little Hitler. He thought he knew absolutely everything. He absolutely belittled people. Colosimo's philosophy was 'my way or the highway'. That's all."

But like the Dykes, Mrs Harvey says Colosimo also has a charismatic personality, and could be "very funny" at times.

"This is why he managed to have so many victims, because he could be charming, he could be very very convincing.

"The problem with Michael was he never had any money to do what he wanted to do, he had to use everyone else's money. Therefore he had to come across in a way people felt comfortable to give him their money.

"That's really how he built his empire, with everyone else's money."

- Bay of Plenty Times

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