Former MP Donna Awatere Huata faces a lengthy jail term after being found guilty of ripping off a trust set up to help underprivileged Maori children - and then cooking the books.
Last night, the former political firebrand was spending her first night in jail after Judge Roderick Joyce, QC, refused bail pending sentencing in the Auckland District Court at the end of next month.
The Crown has indicated it is seeking a sentence well above two years. The maximum sentence is seven years.
In a major fall from grace, the 56-year-old former Act list MP was convicted on five counts of fraud in relation to around $80,000 from the Government-funded Pipi Foundation.
She was cleared on a relatively minor charge of fraud involving a $2100 koha paid into her daughter's credit card account.
Her husband, Wi Huata, who was granted conditional bail until the sentencing hearing, was convicted on four counts of fraud.
Both were found guilty of attempting to pervert the course of justice by trying to cover up their frauds with false records and trying to get people to lie for them.
As the jury foreman delivered the verdicts, Awatere Huata appeared momentarily shaken before regaining her composure as she and her husband held hands.
Later, however, during a brief bail hearing when it became clear that she would be going to jail, tears welled up and a court attendant gave her a handful of tissues.
Huata's lawyer, Roy Wade, and Guyon Foley, appearing for Awatere Huata, sought bail, saying there was no risk of flight and domestic and business arrangements needed to be attended to in the Hawkes Bay.
Gus Andree Wiltens, one of the lawyers for the Serious Fraud Office, which brought the case, did not oppose bail for Huata, but he drew a clear distinction between him and his wife. Awatere Huata, he said, had a close and direct association with the Pipi Foundation and held a position of trust.
She was also a former Act MP.
"Public funds have gone into that trust and that is the money she has got her hands on, according to the jury," Mr Andree Wiltens said.
Unlike her husband, it was inevitable that she would be sentenced to a period of imprisonment for longer than two years, which would exclude the possibility of home detention.
There was no reason she should not start her prison sentence straight away, Mr Andree Wiltens said.
"That is the message that should be sent to the public, that people can't commit fraud of this scale and of this magnitude without going to jail immediately."
The judge said that while on bail Huata would be able to take care of the couple's personal and business arrangements.
Outside the court Mr Wade said the pair were very upset but supportive of each other. Mr Foley said they were "both disappointed, of course".
Huata pushed his way through the assembled media as he left the court. He said nothing but gave a thumbs-up and then a double thumbs-up.
The jury took more than 24 hours to return its verdicts.
Former Act leader Richard Prebble, who was behind the party's move to have Ms Awatere Huata expelled from Parliament after fraud allegations surfaced, said he had no doubt she was guilty but the case was a "tragedy. It's a tragedy for her, for her family and also for Parliament, not forgetting the young Maori children who still need help with literacy," he said.
The three-week case centred on a Serious Fraud Office investigation into allegations of misappropriation of money from the Pipi Foundation, set up by Awatere Huata in 1999 to help improve literacy levels of young Maori. Central to the inquiry was an allegation in the media that Awatere Huata had used trust funds to finance her now-infamous stomach-stapling operation.
The trust was financed by the Government to the tune of $840,000.
SFO senior counsel Robert Fardell, QC, told the jury that the couple used Pipi money as if it was their own. He said that when allegations of fraud started to seep out, the pair concocted a series of phoney invoices in an attempt to cover up their thefts.
Some of the money was said to have been used to pay private school fees and for Awatere Huata's operation.
Awatere Huata told a women's magazine her dramatic weight loss was due to diet and exercise. But it was later revealed that she had had a gastric bypass.
To SFO investigators and in court Awatere Huata maintained that she saved for the $18,000 operation over two to 2 1/2 years by withdrawing sums from her bank account and salting away the cash. The hospital was paid for the operation with two bank cheques, both made out to cash.
But Mr Fardell, who cross-examined Awatere Huata for nearly a day, labelled her testimony as "egregious" lies.
He quizzed her on a number of financial transactions and records, pointing out discrepancies, inconsistencies, "coincidences", back-dated invoices and other irregularities.
Mr Fardell said her account of how she paid for the surgery, like other aspects of her evidence, was nothing more than a fabrication and an explanation of convenience.
Huata did not give evidence.
Mr Fardell said the couple were motivated by greed and, once the game was up, tried to cover their tracks by producing false invoices.
Awatere Huata acknowledged that the invoices and other records were "reconstructed" because of a dearth of documentation at the trust, but there was no intent to defraud and they were not presented as originals.
One of the main prosecution witnesses, former trust chairwoman Kathy Skipworth, a signatory to the Pipi cheque account, told of signing whole books of cheques, some of which Awatere Huata used for her own personal use. She said Awatere Huata told her that a cheque for $30,946 was for stomach-stapling and school fees.
But Awatere Huata said Ms Skipworth, who was convicted in 2002 of stealing 40 pre-signed Pipi cheques worth $21,690, had a "malicious imagination".
Mr Foley said it was the Huatas who reported Ms Skipworth to the police and that she was out for revenge.
Mr Wade also claimed that Ms Skipworth was less than impartial. He said that if the Huatas were involved in theft from the foundation, why would they report Ms Skipworth and run the risk of her "spilling the beans".
Mr Fardell told the jury there had been a "cynical" misuse of public funds.
OTHER MPs BEHIND BARS
Donna Awatere Huata is not the first MP or former MP to end up behind bars.
In March 1918, Paddy Webb was jailed for refusing military service. He was the Social Democratic member for the West Coast seat of Grey.
The time behind bars did not ruin his political career - he later re-entered Parliament for Labour.
John Kirk, who succeeded his late father, Prime Minister Norman Kirk, as Labour MP for Sydenham and later became an Independent, fled NZ in 1984 when he was still an MP. He owed more than $280,000 and was later declared bankrupt.
Authorities found and arrested him in the US, where he spent 102 days in the Dallas County Jail before being extradited to New Zealand to face three charges under the Insolvency Act in 1985.
He admitted the charges in the Wellington District Court and was sentenced to four months' periodic detention, which he finished in February 1986.
Awatere Huata - from prison visitor to inmate
By Anne Beston
Donna Awatere Huata's fall from grace appeared complete yesterday.
Her journey from activist and politician to convicted fraudster echoes the rise and fall of her father, Colonel Arapeta Awatere, a World War II hero who led the Maori Battalion. He was convicted of murder in 1969 and spent the rest of his life in prison, dying in 1976.
Donna Awatere Huata visited her father over those seven years and was close to him.
The youngest of five girls, she was born in Rotorua in 1949 and educated at St Mary's College in Auckland.
She initially studied opera but abandoned her fledgling singing career when her father went on trial.
She worked as an educational psychologist in Otara for 10 years, and produced a Maori language film and ran a reading programme.
From 1970 to 1981, Ms Awatere Huata was at the forefront of protests over Bastion Point and the Springbok tour. She was arrested 18 times.
She met her second husband, Wi, in 1984. The couple have five children. Ms Awatere Huata had two children from a previous marriage.
Her membership of the Act Party in 1996 came as a surprise to many but she was named on the party list and appointed education spokeswoman.
During her time as an MP she was at the centre of controversy over her expenses, promises of permanent residency for Chinese investors who invested in Maori land, and allegations that she and her family had siphoned off Government money destined for the Pipi Foundation reading programme.
Those allegations led to yesterday's verdict.