Finance consultant guilty over $41m Auckland hotel fraud

The Waldorf Celestion Apartment Hotel on Anzac Ave in Auckland. Photo / Brett Phibbs

A financial consultant has pleaded guilty to making false statements to help a group of businessmen allegedly collect a $41 million bank loan to develop a four-star Auckland hotel.

Vaughn Stephen Foster pleaded guilty this morning in the High Court at Auckland before Justice Kit Toogood. Foster was scheduled to go to trial next month.

He was one of four men charged over the development project that the Serious Fraud Office (SFO) began investigating from at least March 2016.

Foster's admission of guilt also comes after lawyer Timothy Upton Slack pleaded guilty to obtaining by deception and was sentenced to 10 months' home detention.

Foster was convicted and will be sentenced next month.

The remaining defendants in the case, property developer Leonard John Ross and company director Michael James Wehipeihana, are due to face trial later in the year.

The now-defunct company Emily Projects developed the Celestion Apartments on Auckland's Anzac Ave and Emily Pl.

The group allegedly made false statements and used forged documents to get a loan from ANZ for Emily Projects to develop the Waldorf Celestion Apartment Hotel.

It is alleged that a loan facility of about $41m was obtained for the two-tower project.

ANZ did not lose any funds as a result of the fraud.

Emily Projects went into liquidation in 2012 and its liquidators, Timothy Downes and Greg Sherriff, said in their final liquidators report in October 2015 that investors had claimed $2.89m from the firm and two other creditors had claimed $671,000.

These creditors had been paid $420,310, a return of 11.8c in the dollar.