Former trustee of Far North Māori fund Stephen Henare jailed for $1m fraud with sister

Stephen Henare was sentenced to prison today after earlier pleading guilty midway through his trial. Photo / Sam Hurley

A former trustee of a Far North Māori fund who stole more than $1 million with the help of his sister - splurging the money on a lush lifestyle - has been jailed.

On day four of a High Court trial in May, Stephen Henare pleaded guilty to five charges of theft by a person in a special relationship and one count of perverting the course of justice.

The 62-year-old was sentenced todayto five years and two months' imprisonment by Justice Matthew Muir.

Henare was a trustee of Parengarenga 3G (P3G) Trust and was appointed with his sister Margaret Dixon alongside five other people in June 2012.

The trust, which helped underprivileged people, managed a 512ha forest block on Māori land in Tai Tokerau District.

The court heard during trial that the siblings took control of P3G with about $1.08m in cash assets in August 2012, but in July the following year the fund was left with just $150.

By January 2014 there was only $13.41 left, the Serious Fraud Office (SFO), which brought the charges, earlier said.

SFO director Julie Read said in a statement after today's sentencing that the fraud "had a devastating financial, social and emotional impact on the 400 current and future beneficial owners of P3G Trust".

"The current trustees are now faced with challenges in the continued maintenance of the forest and the potential future loss of a substantial portion of the remaining assets of the trust," she said.

Prosecuting the case for the SFO was New Zealand's former Solicitor-General, Michael Heron, QC.

He told the jury Henare and Dixon had splurged the money on themselves to fund a lavish lifestyle.

"They abused their positions as responsible trustees. It's as simple as that," Heron said.

About $600,000 was transferred into Henare's own family trust and nearly $200,000 was moved into his personal account, Heron said.

More than $70,000 was also sent to Dixon's account and $100,000 to her family trust, the court heard.

A further $100,000 was transferred to another trust.

Margaret Dixon has already been sentenced to home detention for her part in the fraud. Photo / Sam Hurley

As a result of the depleted funds, P3G could no longer afford to maintain its forests.

The problems plaguing P3G were taken to the Māori Land Court in January 2013 after an application was made by one of the trustees to remove Henare from his position.

But at the Māori Land Court hearing Henare perverted the course of justice when he lied after being asked about the health of the trust's account.

"Dixon and Henare told the court there was a million dollars or so on deposit, in fact at that time there was much, much less - something like $400,000 had already gone out of the account," Heron said.

An application to replace Henare as a trustee was dismissed by the Māori Land Court and he went on use his position to steal the remaining $400,000.

A further $54,480 was also obtained from the trust by Henare during the sale of carbon credits.

"Sadly when the trust ran out of money in July 2013, Henare sold the carbon credits and transferred money into his own account," Heron said.

Dixon, who was due to give evidence for the SFO during her brother's trial, has already been convicted and sentenced to home detention for her part in the fraud.

The court heard at Dixon's sentencing her personal gain was $130,836.

The siblings have been removed as trustees of P3G.