Three businessmen have been sentenced to prison and home detention for their roles in multi-million-dollar crimes committed during the global financial crisis after the collapse of two finance companies.

Paul Bublitz, Bruce McKay and Richard Blackwood all appeared today in the High Court at Auckland after Justice Kit Toogood delivered his verdicts last month following a lengthy judge-alone trial last year.

The trio were charged by the Financial Markets Authority (FMA) with deliberately misleading investors and potential investors in an attempt to rescue failing investments during the financial collapse of 2007–2008 (GFC).

McKay and Blackwood were serving as directors of Viaduct Capital, while Bublitz was a board member for Mutual Finance, when the two firms went into receivership in 2010 - owing investors $17 million.

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The FMA case accused Bublitz of using Mutual Finance and Viaduct Capital to support his property investments in his struggling company, Hunter Capital. McKay and Blackwood were charged with helping him.

Justice Toogood said Bublitz and McKay particularly took "elaborate steps" to carry out the "predetermined and sophisticated plan" which ultimately cost New Zealand taxpayers several millions of dollars.

At Bublitz's holiday home in Pauanui during January 2009, he, McKay and property developer Peter Chevin conspired to use finance companies, which were covered by the government's Crown Retail Deposit Guarantee Scheme, to acquire Hunter Capital's distressed assets, prosecutors said.

Viaduct Capital and Mutual Finance were part of the government's GFC insurance scheme, meaning any loses would be passed on to the taxpayer.

As the fraud continued it became increasingly desperate and dishonest attempts, including misleading the Treasury, were made by the men to "dig Mr Bublitz out of the manure", Justice Toogood said, quoting Crown prosecutor David Johnstone.

In 2009, the Treasury began investigating Viaduct Capital after concerns were raised that the "true beneficiary" and the Crown guarantee was actually Hunter Capital.

The FMA started its investigation of the group in mid-2011, while the Serious Fraud Office also investigated.

The case has, however, not been without blunder and significant delay, including the first trial being aborted due to the FMA's failure to disclose some 14,619 documents.

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The long-running saga finally came to an end today for Bublitz, McKay and Blackwood, who were convicted and sentenced by Justice Toogood - five years after first being charged.

Bublitz was jailed for three years and two months, a sentence which will begin on May 27 because of his father's ill-health.

McKay was sentenced to a total of 12 months' home detention, while Blackwood will serve a total of nine months' home detention.

All three are said to be "ruined financially".

Paul Bublitz was found guilty of six charges and not guilty of four charges. Photo / Greg Bowker
Paul Bublitz was found guilty of six charges and not guilty of four charges. Photo / Greg Bowker

Bublitz was found guilty on four and acquitted on six charges of theft by a person in a special relationship.

The man who began his financial career as an 18-year-old was also guilty of two charges of making a false statement by a promoter.

His lawyer, Simon Lance, today said his client's offending was unique because it came in the midst of the GFC.

But Justice Toogood quipped: "Even more reason to expect people to behave appropriately."

Lance also said there "are no individual investors who are out of pocket" as a result of his client's crimes.

Justice Toogood interrupted him and said: "No, but that's because the taxpayer stepped in and took the hit."

Bruce McKay, pictured during the first trial, was accused of deliberately misleading investors during the GFC. Photo / Greg Bowker
Bruce McKay, pictured during the first trial, was accused of deliberately misleading investors during the GFC. Photo / Greg Bowker

McKay was guilty of all three charges of theft by a person in a special relationship he faced, but not guilty on two counts of making a false statement by a promoter.

The chartered accountant was also acquitted on one charge of making a false statement to a trustee.

His lawyer, Greg Bradford, said his client "asked me should I pack a bag" for today's sentencing as McKay confronted the prospect of prison time.

Bradford said he was lost for words and the question showed the "human side" of the case.

Blackwood, an experienced businessman, was found guilty on all four charges of theft by a person in a special relationship.

He was found not guilty of one charge of making a false statement by a promoter.

Richard Blackwood was a director for Viaduct Capital when the firm went into receivership in 2010. Photo / Greg Bowker
Richard Blackwood was a director for Viaduct Capital when the firm went into receivership in 2010. Photo / Greg Bowker

The financial markets watchdog also charged Chevin, who pleaded guilty to nine charges of theft by a person in a special relationship.

He was sentenced in 2017 to nine months' home detention.

Former chief executive of Blue Chip and director of Viaduct Capital Nick Wevers was also charged but died in 2014.

The FMA withdrew the charges against him after his death.

The Blue Chip group of companies failed in 2008 owing $84 million to investors. Founder Mark Bryers was fined $38,000 and sentenced to 75 hours' community work for poor record-keeping.

Lance Morrison, a former Mutual Finance board member and chartered accountant for Bublitz who managed financial affairs for Hunter Capital, was also charged.

Former chief executive of Bluechip and director of Viaduct Capital Nick Wevers, pictured in 2004, was also charged but died in 2014. Photo / NZ Herald
Former chief executive of Bluechip and director of Viaduct Capital Nick Wevers, pictured in 2004, was also charged but died in 2014. Photo / NZ Herald

The first trial of Bublitz, McKay, Blackwood and Morrison, which lasted nine months, was aborted in May 2017 after thousands of documents weren't disclosed to the defendants' legal teams.

The FMA's foul-up was described as an "extreme example of procedural failure" by Justice Mark Woolford and several charges were dropped against the four men as a result.

"The volume of late disclosure is seemingly unprecedented in New Zealand," Justice Woolford said.

After the first trial was abandoned, FMA prosecutors also dropped its case against Morrison.

He was, however, in court today to see his former colleagues sentenced.

Today, Bublitz's lawyer called the abortion a "debacle", while Justice Toogood said it was a "highly unusual if not unique factor which undoubtedly has had a punitive effect of the defendants".

The judge gave each of the three men sentenced today a 30 per cent discount for the prosecution's gaffes and the significant delays in the case.

The FMA dropped its case against a fourth director, Lance Morrison. Photo / Greg Bowker
The FMA dropped its case against a fourth director, Lance Morrison. Photo / Greg Bowker

When the first trial was halted, the FMA had already spent more than $1.65m on external lawyers, investigators and other services in the case.

The FMA was also ordered by Justice Woolford to pay $10,000 each to Bublitz, McKay, Blackwood and Morrison and $10,000 to the Ministry of Justice after the trial was aborted.

Morrison was paid a further $75,000 towards the costs of his defence.

Bublitz, McKay, Blackwood had applied to stay the proceedings, but the High Court declined their effort in September 2017.

FMA general counsel, Nick Kynoch, said after the sentencing that along with the theft of investors' funds the case also showed an "abuse" of the Crown Retail Deposit Guarantee Scheme.

"This was a difficult and complex case, which took considerable time and resource to investigate and prosecute," he said in a statement.

"However, such was the cynical and egregious nature of the misconduct, the defendants had to be held to account for their actions."

Kynoch said the case also showed how "complex and difficult" it can be to investigate and prosecute white-collar crime.

In 2017, the trustee of Viaduct Capital, Prince and Partners, settled civil proceedings brought by the FMA for $4.5m after admitting a series of failings.