Home detention for fraudster

A 47-year-old Kaitaia man convicted of New Zealand's biggest Trade Me fraud has been sentenced to five months' home detention.

Paul Mathew Barr was sentenced in the District Court at Kaikohe on Monday, after earlier pleading guilty to three charges of obtaining by deception, in that he had sold an e-commerce and web-hosting business to three different customers, netting him more than $70,000.

The fraudulent sales were not conducted via on-line auction but were advertised on Trade Me, much as a business for sale is advertised in a newspaper.

Barr, an Australian national, is understood to be planning to return to Australia to be with family as soon as his sentence is completed.

Judge John McDonald said the case showed that even if the means of buying and selling had changed, the old adage of "buyer beware" still applied, adding that Trade Me was increasingly used not just for buying and selling small items but also for things of great value.

"It reflects modern society where transactions are done electronically, without people actually speaking to each other ... Those of us who grew up in less complicated times would look (the seller) in the eye and decide if it was worth doing business with them," he said.

Two of the complainants also came in for criticism in court, one for wanting a "second bite of the cherry" by asking for reparation despite agreeing to a final settlement in the Disputes Tribunal two years earlier, the other for supplying wildly varying figures for his losses.

The court heard that Barr had advertised the business in February 2008, claiming 122 clients, maintenance contracts for about 20 websites and a weekly turnover of $1200. He sold the business to the first complainant for $22,500 and to a second for $22,000. Later that year he re-advertised the business, with some of the same clients and some new ones, and sold it for $30,000.

The buyers subsequently discovered that the clients and domain names they thought they had bought had been sold to others or did not exist at all.

"You essentially sold the same business to three different people. Some of the items you were selling you didn't have, belonged to someone else or were totally fictitious," Judge McDonald said. He did not award any further reparation, however.

The first complainant had agreed to an $8000 settlement two years ago, the second was this week given a cheque for $11,000, and the third, who had later on-sold the business for an undisclosed sum, seemed unable to decide what the fraud had cost him.

He had initially put his loss at $30,000 but later sought $167,000. Ahead of Monday's sentencing he returned to the $30,000 figure, and finally reduced that to $15,000.

Judge McDonald described the highest of those figures as "nonsense," adding that that complainant could pursue Barr through the civil courts .

Meanwhile, in sentencing, he took two years' imprisonment as the starting point, arriving at five months' home detention after taking into account Barr's guilty pleas, prolonged bail, mental health issues and otherwise good character.

Trade Me earlier stated it wanted full reparation for the buyers and a jail term for Barr. A spokesman said Trade Me was a stupid place to commit fraud, even when the transactions were not directly on the website, because identifying offenders was easy.