Reuben Crook has lost his appeal to get his home detention sentence reduced after pleading guilty to fraudulently claiming the Covid-19 Wage Subsidy.
A Taupō businessman who ripped off the Covid-19 Wage Subsidy system by more than $40,000 has lost his bid to get his sentence reduced.
Reuben Crook appealed his case to the High Court at Rotorua last month, claiming his sentence of eight months’ home detention was manifestly excessive.
He was one of 59 people nationwide who have been sentenced in wage subsidy cases, with more still before the courts.
Crook earlier pleaded guilty in Taupō District Court to a representative charge of dishonestly using a document to obtain a pecuniary advantage.
He was sentenced by Judge Paul Geoghegan on December 2 last year. He appealed the sentence to Justice Graham Lang on April 20, and the judgment has just been made public.
Crook was the sole director and shareholder of a company that lodged five applications seeking Government wage subsidies after the onset of the pandemic. The company had previously operated a scaffolding business.
He was aged 25 and employed six people at the time of the offending, the appeal decision said.
It said the applications were found to be dishonest because the company, RWTC Services Ltd, was deemed to be not operating at the time.
The company could not have suffered a decline in revenue because of the pandemic, because the company was not trading.
The subsidy applications were further fraudulent because staff they named were not employed by the company and did not receive any wages during the period for which the subsidy was claimed, the decision said.
Crook had also not received or declared any drawings or shareholder salary during that period, and funds the company received for wage subsidies were not used for that purpose.
He also operated a building company that employed staff, and on several occasions claimed subsidies for staff twice for the same periods.
The total he fraudulently claimed was $41,006. Most of the money was transferred to Crook’s personal bank account.
Crook repaid the entire amount on November 26 last year, six days before he was sentenced.
Judge Geoghegan said at sentencing there were several aggravating factors, including the large sum, the premeditated nature of getting the subsidies paid and the breach of trust knowing that the Ministry of Social Development did not have time to investigate all claims and trusted employers to make claims they were entitled to.
Crook’s lawyer, Harry Redwood, argued on appeal that Judge Geoghegan did not give an adequate discount to reflect that Crook had repaid all the money.
Redwood also argued for additional discounts to reflect Crook’s remorse, previous good character and other personal factors.
He argued the end sentence should have been four-and-a-half months’ home detention.
The ministry’s lawyer, Anna McConachy, disagreed, pointing out Crook repaid the money just before sentencing – about five years after he was paid the money.
A pre-sentence report said Crook claimed it was never his intention to dishonestly take the money and that had he sought proper advice, he might not be in this position.
It reported he firmly believed he was entitled to make wage subsidy applications for employees working for both the companies - building and scaffolding - that he was managing.
Justice Lang said he agreed with McConachy that this could not be attributed to the lack of business acumen or naivety because Crook’s explanation for claiming subsidies for some staff twice for the same periods was “simply untrue”.
The decision also noted that two large withdrawals labelled “boat” were made from Crook’s personal account that received most of the subsidy money.
“There is simply no evidence that Mr Crook passed on the funds that he obtained dishonestly to the employees of his other company,” Justice Lang’s decision said.
Justice Lang said Crook did not have a clean record, so it was difficult to give more discount for previous good character.
He had convictions for assault with intent to injure, committed in a family violence context, and driving while suspended. They occurred in 2016 and 2023, respectively, the decision said.
Justice Lang concluded none of the grounds for appeal were made out.
The Rotorua Daily Post asked Crook to comment on his appeal yesterday.
He said he “accepted my faults in this case” and had repaid all his debts but maintained there were “two sides”, and he genuinely believed he was entitled to the funds for his staff.
“I read the criteria and I felt I was eligible,” Crook told the Rotorua Daily Post.
He described himself as a “community man” and a “regular guy”.
“Did I intentionally defraud the people of New Zealand? No. Did I repay the money? Yes.”
A Ministry of Social Development spokeswoman confirmed latest figures showed 59 people had been sentenced in wage subsidy cases, and another 47 people were still before the courts.
This was part of the ministry’s programme of work on wage subsidy fraud and integrity.
She said since the scheme started, more than $830 million in wage subsidies had been repaid.
About $18 billion was paid out by the Wage Subsidy Support Scheme in 2020 and 2021, according to Treasury reporting.
The scheme aimed to mitigate potential layoffs or reductions in hours resulting from the impact of Covid-19 on businesses.
Kelly Makiha is a senior journalist who has reported for the Rotorua Daily Post for more than 25 years, covering mainly police, court, human interest and social issues.