An American who owned land in Queenstown has become the first person convicted of breaching rules for foreign investors.
Lance Cornell Weller was fined $17,000 and ordered to pay $5000 costs after he promised the Overseas Investment Commission he would develop a chestnut orchard and a Douglas fir plantation when
it allowed him to buy property.
But he never did and instead put his efforts into a holiday home.
Overseas Investment Office manager Annelies McClure said the conviction was a result of the office's renewed focus on monitoring foreign investors. She warned that more prosecutions could follow, with 30 investigations under way in Auckland and the Southern Lakes area.
Weller, of Atlanta, Georgia, was charged in Queenstown District Court with failing to comply with a condition of an Overseas Investment Commission consent.
Weller bought a 43ha Queenstown property in August 2000.
The commission - whose regulatory functions have since been taken over by the OIO within Land Information New Zealand - granted consent for the purchase on the basis that Weller develop a 20ha orchard and a 5ha plantation on the property.
The developments were expected to create three full-time jobs.
In the three years following Weller's purchase of the property he did not take any steps to implement either of the developments.
"The only developments to take place on the property were roading and foundation works for Mr Weller's holiday home," Ms McClure said. She was pleased the case had led to a conviction.
"It sends out the message that we are prepared to prosecute and that foreign buyers of land must do what they say they are going to do."
Investors could be fined up to $300,000 and face 12 months' jail.
"The High Court can order the disposal of property owned by foreign investors and they can also lose the entire profit made on their investment, regardless of how large that might be."
Weller made more than $1 million by reselling the land.
Judge Stephen Erber said New Zealand had to be protected from overseas land buyers who were not as "bona fide" as they appeared.
- NZPA
