Smith earned funds to flee country from behind bars

Phillip John Smith used his time behind bars to gain university qualifications and run a business - making the money he used to flee New Zealand.

Smith - who was caught in Brazil early this morning NZ time - used his birth name, Philip Traynor, to run a company that sold Chinese electronics.

He used the same name to gain university qualifications in accounting and finance. The same name appeared on the passport he used to flee the country.

Traynor was 80 per cent shareholder in WSE Marketing Ltd when it was first registered with the Companies Office in 2008.

David Edlin, a 53-year-old Hawkes Bay man, described as a friend Smith met before he went to prison, held the remaining 20 per cent.

There is no suggestion Mr Edlin was involved in Smith's absconding.

The company was struck off last November, a year after its last annual return was filed by Traynor, and more than two years after it was revealed that the business was being run from behind bars.

Corrections ordered a review in 2011 after it was discovered there were no laws preventing Traynor, an inmate at Paremoremo Prison, from conducting the activities, the media reported at the time.

He was importing products from Hong Kong with Mr Edlin, and his role was supplying advice and accountancy support by phone, mail and via face-to-face prison visits.

It was those business activities that earned Smith the funds to flee NZ, and with which he was paying just $50 a week towards the tens of thousands of dollars he owed as reparation to his victims.

When the company was registered, both men used the same Hastings address that Mr Edlin currently owns.

As a result of Corrections' review into Smith's activities, prisoners can conduct only "approved" business activities. His were not approved when the new rules were adopted.

E-detection big challenge

A forensic computer analyst says it would be hard to track down fugitive murderer Phillip John Smith through emails from his South American hideout.

At best, only a rough location could be identified, said New Zealand Forensics director and former police detective Mike Chappell.

"If you were able to get the email and strip the headers off it, then you could get a reasonable proximity just through finding out where the IP [internet protocol] address is. That would be about as close as you could get. Then you could always get hold of the actual ISP [internet service provider] ... They might be able to give you a closer location, but knowing this guy, I would suggest that he's probably doing it from cafes or Wi-Fi hotspots."

Smith's lawyer, Tony Ellis, said the pair had been corresponding via encrypted email.

Mr Chappell said if police were intercepting email correspondence between the two, they would likely need a warrant from a High Court judge.