Northland's Stonecraft Construction is a family-owned business run by Pam and Mike Mitcalfe (pictured).
A trusted associate of a small family business abused his position by diverting $124,000 through fake invoices and hidden cash dealings.
Now, Colin Gillies, 68, has been jailed for two and a half years on five charges of defrauding the Kaitāia-based company, Stonecraft Construction.
Gillies appeared for sentencing in the Whangārei District Court after he was found guilty by a jury at the Kaikohe District Court earlier this year.
He had been contracted to Stonecraft for several years and was a trusted senior associate who was given autonomy to manage and execute projects around Northland.
As a stonemason, he completed more than 400 jobs for the company, yet five projects stood out when funds were not received into Stonecraft’s bank account.
On three occasions, Gillies was found to have created invoices using the Stonecraft logo but used his personal bank account for payment by clients.
Those invoices totalled $110,000.
On two other occasions, Gillies received cash payments of $14,000 from Stonecraft clients, which he pocketed.
At sentencing, Crown lawyer Ina Stewart said Gillies took advantage of his position and the offending was serious, over a sustained period.
“It is clearly offending that has had a considerable impact on the victims. They trusted this man and had a huge amount of faith in him,” Stewart said.
“He proceeded to abuse that trust in such a significant way. They’re a small company, so the loss is felt.”
Stewart said he had told Corrections that if he were fined, he would take it out of a perceived debt he believes he is owed by Stonecraft.
“In those circumstances, there is no basis for any further adjustment for remorse or anything of that nature.”
Gillies’ lawyer Nick Leader said his client had spent a significant amount of his own money on the projects and it was money he was entitled to.
Leader claimed many of the Crown’s figures were incorrect and Gillies had the invoices for money he had paid out to sub-contractors to prove.
But Judge Peter Davey said if that was the case, Gillies should have presented that evidence at trial.
“To do that, it would have extended the trial considerably,” Leader responded.
“His defence was that he honestly believed that he was entitled to the money.”
Leader said there was evidence Gillies had paid contractors himself and the case was more aligned with the Civil Court.
Leader disagreed with the Crown’s claim that the offending was sustained and said that of more than 400 jobs Gillies was involved in, the offending was restricted to just five instances.
He said Gillies had intended to tidy up the financial paperwork in his “wash-up” and sought a court adjournment so he could provide the records.
But Judge Davey said it was not in the interests of justice and he was not prepared to grant an adjournment.
“If the company owed you that much money, and the fact that no steps whatsoever have been taken to recover those funds, your claim, I’m not prepared to take into account at all,” the judge said.
Judge Davey said it was a significant breach of trust on a small family-owned business that was now having to rebuild their reputation.
“You were leading clients to believe they were paying Stonecraft, but actually, you were diverting the funds so they were paid into your bank account.
“It’s not what I would call sophisticated fraud. This is obviously a case where a small company, built on trust and the systems that were in place, you were able to take advantage of.”
Judge Davey said Gillies’ offending was motivated by entitlement and jailed him for two years and six months.
Stonecraft Construction’s manager, Pam Mitcalfe, told NZME they wanted an outcome that would ensure Gillies’ name was on the public record to protect others.
“It is a relief for ourselves and others affected that this case is now behind us,” Mitcalfe said.
“The breach of trust, financial and relational damage that fraud brings is significant and shouldn’t be underestimated. The wounds that fraud inflicts, though not seen, are real.
“We would like to thank everyone for the level of integrity involved in reaching our goal/outcome throughout the last couple of years.”
Shannon Pitman is a Whangārei-based reporter for Open Justice covering courts in the Te Tai Tokerau region. She is of Ngāpuhi/ Ngāti Pūkenga descent and has worked in digital media for the past five years. She joined NZME in 2023.