4 1/2 years' jail for defrauding own family trust

An accountant who plundered $2.3 million from his own family's trusts and other entities to prop up his failing businesses was sentenced to 4 1/2 years' jail yesterday.

John Charles Liddy, 50, admitted 13 charges brought by the Serious Fraud Office (SFO) for using cheques and documents with intent to defraud over a period of eight years from 1998.

In the Christchurch District Court yesterday SFO prosecutor Mark Treleaven told Judge Robert Kerr that Liddy's offending, which included stealing from his late father-in-law's estate, had left a family deeply divided.

Resentment and distress crossed three generations, with some family members suffering health problems. Some had lost educational opportunities and others were having to sacrifice their own time to "fix up" the family company Liddy was involved in.

Family members spoke in their victim impact statements of the emotional and financial effects of the frauds which Liddy committed to prop up the company where he was employed. By diverting cheque funds, Liddy enabled staff salaries to be paid, including his own.

Each of the entities Liddy defrauded was associated with him through marriage. He had signing authority, but was not entitled to use the money for his own benefit or for his company.

Liddy was not a beneficiary of the trusts or the estate, and he was not a shareholder in the two companies he stole from. He had used cheque books to write cheques for his personal benefit.

He used some money to buy a rental car firm and later stole about $1 million to prop up the company, CRS Ltd.

Liddy's offending was discovered when tax returns and financial accounts fell behind and the family sought documentation for tax purposes.

Mr Treleaven said the frauds totalled just on $2.3 million, of which $1.5 million was a "net cash loss" to the victims.

An educational trust had been plundered, shattering the dreams of further education by some high-achieving children in the family.

While Liddy had pledged to pay reparation it was clear from the victims that cash had yet to be realised.

Lawyer Pip Hall said Liddy started offending to prop up his failing businesses which he hoped would recover and allow him repay the funds used.

"But once he got on the money-go-round he couldn't get off."

Liddy's actions had "wreaked havoc" on his family and he was remorseful. He was "very fortunate" that his wife still supported him.

Mr Hall said all significant assets belonging to Liddy were now in the hands of the complainants. Liddy was "clearly a person of good character" before his offending.

Judge Kerr told Liddy he accepted "at once" that the funds had not been used for "high living, trips overseas and that sort of thing".

Liddy, he said, was an accountant whose accounting was poor, filing late company accounts and tax returns.

He noted "some cruelty" in Liddy's premeditated offending because of the family involvement.

Judge Kerr gave Liddy credit for pleading guilty, but noted the practicality of any offer of reparations was difficult to assess.

- NZPA