Boat dealer admits $1.6m fraud

A former director of a Christchurch boat sales business, who was extradited after fleeing to Australia, has pleaded guilty to 40 charges of fraud worth nearly $1.6 million.

Peter Edward Hynes, 53, appeared in Christchurch District Court today and admitted the charges, laid by the Serious Fraud Office (SFO), and will be sentenced on February 18.

Hynes admitted 34 charges of dishonestly using a document, three charges of obtaining money by deception, and three charges of theft by a person in a special relationship. One theft charge was withdrawn.

He was a director of MacPherson Marine, a marine retail business based in Christchurch, from its establishment in 1998 to its liquidation in 2006.

When the business began, Hynes entered into a finance agreement with GE Finance (GE) which would see GE pay for any new boat MacPherson Marine ordered, and the retailer would be required to repay the finance company as soon it sold.

The arrangement was extended to include 50 per cent finance on boats bought as a trade-in from customers.

The boats were meant to be stored at the MacPherson Marine premises for a monthly check by a representative of the finance company.

The SFO said: "In practice, GE placed a good deal of trust in Hynes to deal with GE in an honest manner and in the interest of commercial practicality did not rigidly enforce the various conditions of the agreement relating to the physical location of stock."

MacPherson Marine began to have financial difficulties from the end of 2004 and went into liquidation two years later owing $2.77m to GE.

The liquidators found various acts and omissions by Hynes which were apparently intended to deceive GE Finance.

The total financial loss caused to all the victims of Hynes' offending was $1,577,788.

In many cases, the sale of boats was not disclosed to GE and Hynes' false representations caused GE to believe the boats and motors were still in stock.

He also obtained finance from GE by falsely claiming that boats in the yard were trade-ins, when in fact they were being sold on behalf of clients. In one case, the boat was in the yard for storage.

On three occasions, Hynes sold boats on behalf of clients and failed to pay the clients.

Hynes is charged with two instances of taking a 50 per cent deposit, and one of taking full payment of $40,000, from customers and not providing the boats. The money was used to pay other business expenses, usually debts to GE.

Hynes is also charged with making four fraudulent applications for loans from another company, Marac Finance. The total loss to Marac is $324,428.

Hynes fled New Zealand for Australia immediately before the company went into liquidation and his offending being discovered.

The SFO started investigating the case and laid fraud charges in 2008.

Interpol and Australian authorities found Hynes in Queensland and he was arrested and brought back here in July.

SFO chief executive Adam Feeley said fraudsters should not assume that fleeing to another jurisdiction would allow them to avoid accountability for their crimes.

Hynes has been granted bail until his sentence date.

- NZPA