A Hamilton man, in his 70s, allegedly clocked up numerous personal expenses to a company account for items including weedkiller, a spray unit, and a toastie machine. Photo / Duncan Brown
A Hamilton man, in his 70s, allegedly clocked up numerous personal expenses to a company account for items including weedkiller, a spray unit, and a toastie machine. Photo / Duncan Brown
A businessman is alleged to have stolen $111,000 in company funds to help pay off a personal loan and buy weed killer, a spray unit, a toastie machine maker and Hush Puppies shoes.
The 73-year-old held a senior position in the Hamilton finance company he helped set up.
Now, he is on trial in the Hamilton District Court defending three charges each of theft by a person in a special relationship and of obtaining by deception between 2015 and 2018.
In total, the man, whose name and identifying details are suppressed, is alleged to have unlawfully obtained $111,079.80.
He is accused of defrauding the company by writing out and banking “cash” cheques, crediting his personal loan, and buying personal items.
It is alleged he failed to keep any proper record of the money he allegedly took and instead kept Post-it notes stuck to his computer, which he eventually threw away.
Today, the trial began before a jury and the man, who is representing himself, gave a brief opening statement, in which he denied any wrongdoing.
“My defence is quite simple. I have committed no crime,” he said.
“I’m simply carrying the can for a poorly governed company.”
The man said a “disconnect” had developed between himself and the board of directors.
‘They have no idea where the money went’
Crown solicitor Tom Sutcliffe said the complainant company was the brainchild of the defendant.
He had presented the company idea to others, who put in the capital to get it going.
The company, for which the defendant ran the day-to-day operations, dealt mostly in small loans of $10,000 or less.
The man was given “full control and signing authority” of the company bank account and could write cheques without the need for a co-signatory.
Sutcliffe said there was a “great deal of trust placed in [the defendant] by the board of directors, but [he] was not given free rein to do whatever he wanted”.
“He was still accountable and obliged to report to them.”
As a part of their operations, the company, the name of which is also suppressed, used brokers.
The trial is being heard in the Hamilton District Court.
When a broker was used, the customer was charged a $600 broker fee. When a broker wasn’t used, they weren’t.
“The practice was illegal because the company was not authorised to practise and charge broker fees. It was also dishonest because people were charged for services that were not provided.”
None of those fees were processed through the company bank.
“You will also hear there was no formal record kept of where these funds went.”
When questioned by the company directors, the defendant created an “orphan account”.
“Which, it seems, is not an account at all,” Sutcliffe said.
“If it were an account, that would allow these payments to be traced, but there was nothing in these accounts.
“It was something, which the Crown says, is an excuse to justify where this money went.”
The defendant was alleged to have told investigators that he kept the payments on “sticky notes” on his computer.
As payments were made, he’d adjust the sticky note before eventually discarding it.
“Basically, there was no record, so the directors have no idea, really, where these funds went.”
Sutcliffe said at one point, the defendant allegedly approached a broker and told him the company was now making it compulsory for the broker fee to be paid.
He’s alleged to have told the broker that any customer who didn’t have a broker would be referred to him, and the $600 fee would be split between the respective companies.
The broker would be made to sign the appropriate paperwork, whether he had dealt with the client or not.
The $600 fee would be paid with a cash cheque.
However, the company’s board of directors was unaware that the change had been made.
“The [directors] had no idea that this practice was going on ... you will also hear that the half share of the fee never showed up in the company accounts at all,” Sutcliffe said.
That alleged deceit totalled $16,800.
Other alleged cheques cashed by the man, totalling $15,250, were supposed to be signed by the broker but never were.
The defendant also took out a legitimate personal loan, of about $24,000, with the company.
However, Sutcliffe claimed the man began using it as a form of revolving credit.
When questioned, the man was alleged to have said that at times he’d paid more against the loan than required, so he was entitled to “top it up by paying himself more money without getting approval by the board”.
“He just paid himself more because he was in charge of the account.
“He was effectively using the facility ... like a revolving credit without approval from the board, but you can’t use the company account as your personal account.
“You can imagine that the board of directors would be quite surprised that money is being charged out by the company but coming back into the loan account for [the defendant].”
A forensic accountant also discovered the man had allegedly clocked up expenses for personal items, including weedkiller, a spray unit, shower glass cleaner, a toastie machine and Hush Puppies shoes.
The trial is set down for eight days but Judge Noel Cocurullo told the jury to expect it to go into a third week.
Belinda Feek is an Open Justice reporter based in Waikato. She has worked at NZME for 10 years and has been a journalist for 21.
