Neill Williams, who claimed to only do work for the Five Star finance companies, was an integral part of all major decision making at the now-failed group, a judge has ruled.
Williams was not a listed principal of Five Star Consumer Finance or related company Five Star Finance and said he was only an employee of director Nicholas Kirk.
However, the Financial Markets Authority, which brought the case against the 79-year-old, alleged he was a prime mover at Five Star if not, at times, a controller of events.
Although he pleaded guilty more than two years ago to charges concerning misstatements in Five Star offer documents and financial statements, the undischarged bankrupt unsuccessfully attempted to change his plea twice in what was described as 'fabian-style' tactics.
He then went through a disputed facts hearing about his role at the companies, which wrapped up earlier this month.
In his decision on these disputed facts Judge David Wilson QC ruled this week that Williams was "an integral part of all major strategic decisions within the Five Star Group".
During the hearing, evidence was heard from another Five Star principal Marcus MacDonald that Williams felt it would "derogate from the credibility of the company" if he was a listed director.
This was due to his involvement in First City Finance, a company which collapsed in the 1980s and the Dairy Containers case.
While a company document said Williams had no part in the promotion of Five Star Finance, Judge Wilson said this "was written as part of the plan to keep Mr Williams' real role "under the radar" so that the investing public and the authorities would not know the real extent of his involvement".
"I find that the 'employment' of Mr Williams by Mr Kirk, and his lower apparent remuneration were also part of the same careful construction to hide the real position from investing public and the authorities," the judge said.
Although Williams said he was not involved in decisions about related-party lending (which was omitted in offer documents) the judge found against him on this point.
"I find that Mr Williams exercised decision making power at Five Star Consumer Finance, and was part to the offending of the named directors as he knew about deficiencies in reporting and assisted in them being made," the judge said.
The judge rejected contentions that Williams had held no involvement in drafting a misleading prospectus.
"Mr Williams even claimed he had never seen any prospectus even to the date of the hearing. This was a remarkable position from the man who was founder of the Five Star Group and I do not accept it."
The judge said Williams referred to himself as the "architect of the Five Star Group", its founder and "The General".
He also referred to himself, Kirk and MacDonald as "the three musketeers".
Williams will be sentenced in the Auckland District Court on April 19.
Five Star Consumer Finance collapsed in 2007 owing $54 million to 2300 investors who to date have received 23c in the dollar back. Five Star Finance also fell into receivership in 2007, owing $42 million.
Macdonald, Kirk and another director Anthony Bowden pleaded guilty to misleading investors in a case brought by the Securities Commission (which became the FMA) as well as to other charges brought by the Serious Fraud Office.
Macdonald and Kirk were sentenced to more than two years in jail in late 2010. They have since been released on parole.