The Crown is pushing for jail terms in line with the "top-end offending" of three former Capital + Merchant Finance directors, who are being sentenced in the High Court at Auckland today.
Wayne Leslie Douglas, Neal Medhurst Nicholls and Owen Francis Tallentire faced numerous Crimes Act charges arising out of the affairs and demise of Capital + Merchant, which operated as a finance company and offered property loans.
The company collapsed in November 2007 owing $167 million to 7500 investors, who are likely to see none of their money back.
In July the trio was found guilty of charges for theft by a person in a special relationship in a case brought by the Serious Fraud Office.
The SFO said the accused knowingly used investor funds in ways that breached Capital + Merchant's trust deed and dubbed the matter one of the most important commercial theft case in recent years.
Crown prosecutor Nicholas Davidson QC said during the trio's sentencing hearing today this was "top-end offending" and pushed for a starting point of seven years in jail for Tallentire and nine or ten years for Nicholls and Douglas.
"These weren't instances of getting close to the mark and missing in terms of (the directors') obligations but of wholesale disregard for the investors' money in favour of the offenders' personal interests," Davidson said.
"The penny has to drop, we're not talking about money being lost by the risk associated with investment in the ordinary course (of business)," he said.
Davidson did say the trio had shown genuine remorse, but questioned how far Justice Ed Wylie should take this into account.
Douglas, Nicholls and Tallentire jointly faced three charges over three different loans C+M advanced between 2004 and 2006 totalling almost $20 million.
Douglas and Nicholls were found guilty on all three counts by Justice Wylie in July, while Tallentire was found guilty on two and acquitted of the other.
Nicholls and Douglas' lawyer, Bruce Gray QC, said his clients were "ethical men" who had shown remorse.
"They have each expressed their own remorse, they have not told the court they are sorry for themselves, they are said they are sorry for their failings," Gray said.
The defence lawyer said his clients' culpability was similar or less than the convicted Nathans Finance directors, two of whom were sentenced to more than two years' jail last year.
Gray said the Crown's starting points were too high and were 50 per cent more than Bridgecorp director Rod Petricevic faced.
"We say our starting point must below that of Petricevic, which at the present point is the high water mark," Gray said.
Petricevic was sentenced to six years' nine months prison earlier this year in cases brought by both the SFO and the Financial Markets Authority.
Gray also asked the judge to consider home detention as a serious option for his clients, who deserved a discount for their age, remorse and previous good character.
Gray said neither man was in a position to pay reparations to investors.
The sentencing continues this afternoon with submissions from Tallentire's lawyer, Nathan Geyde.By Hamish Fletcher @hamishfletcher Email Hamish