Police have made a formal bid in the High Court to seize property they allege is associated with a failed finance company director who is serving more than eight years in jail for fraud and misleading investors.
Police took unprecedented action last year to restrain assets they said were associated with two jailed Capital + Merchant Finance directors, Neal Nicholls and Wayne Douglas.
When these assets were frozen, the High Court heard that the police were also targeting two properties allegedly associated with Douglas.
The Commissioner of Police has now made a profit forfeiture application in the Auckland High Court for one of these properties, which Douglas bought in 2008 and had a capital value of $560,000 as of 2011. The property has a $271,000 mortgage over it.
There was no opposition filed against the profit forfeiture application and Justice Susan Thomas reserved her decision when the matter came before the court last Thursday.
The High Court must make a profit forfeiture order if it is satisfied on the balance of probabilities that the respondent in question has "unlawfully benefited from significant criminal activity" and has interests in property.
During Thursday's hearing, it was revealed that a settlement had been reached which involved the second property, a lifestyle block, allegedly associated with Douglas and that was originally in the polices sights.
The address of this property - a lifestyle block north of Auckland which has a capital value of $1.5 million is also suppressed. A lawyer representing the police told the High Court last week that a bank account with close to $1 million which was restrained last year is still frozen and at this time not facing an application for forfeiture. The police have alleged these funds are associated with Nicholls.
Nicholls is serving eight years six months in jail and Douglas eight years two months. This followed a Serious Fraud Office trial where both men were found guilty of theft by a person in a special relationship for loans totalling almost $20 million. They loaned money for their own benefit in breach of Capital + Merchants trust deed. C+M collapsed in 2007 owing $167 million to investors.