For immediate release
Media Statement:
26 November 2010
SFO welcomes custodial sentence for National Finance defendant
John Gray, the former Accountant for National Finance 2000 Limited (National Finance) was today sentenced to a term of
18 months imprisonment. Mr Gray has indicated that he will appeal the decision not to grant him home detention in
relation to his sentence, and remains on bail pending determination of that matter.
Mr Grey had earlier plead guilty in the District Court in Auckland to theft by a person in a special relationship, which
related to misuse of National Finance funds in breach of its Trust Deed requirements.
Gray also pled guilty to a charge of False Accounting whereby he concealed the true recipient of funds by creating a
false document.
SFO Chief Executive, Adam Feeley, said “This is a very significant result. The delivery of a custodial sentence sends a
clear message as to the Courts view on serious white collar crime.”
Mr Feeley said that the decision would have important ramifications for the additional finance company cases under
investigation and prosecution by the SFO.
“Results like this demonstrate that the seriousness of white collar crime. It will be of great comfort to investors, and
sends a positive message to the investing public about the integrity of our financial markets, and the consequences for
breaching the law.”
Former National Finance director, Trevor Ludlow, is also charged by the SFO with offences relating to the misuse of
funds.
He is yet to enter a plea in relation to the charges and a trial date has yet to be set.
End
Note to editors:
Background to National Finance
National Finance 2000 Limited traded as a finance company accepting deposits from the public and investing those
deposits mainly in motor vehicle loans, originated through the related Payless Cars group of companies. Trevor Alan
Ludlow was sole shareholder and a director of the company. John Gray was employed by the company as an accountant.
National Finance was placed into receivership on 9th May 2006 owing investors approximately $21 million.
The SFO investigation was commenced on 30th June 2006.
Role of SFO
The Serious Fraud Office (SFO) was established in 1990 under the Serious Fraud Act in response to the collapse of
financial markets in New Zealand at that time.
The SFO operates three investigative teams:
• Fraud Detection & Intelligence;
• Financial Markets & Corporate Fraud; and
• Fraud & Corruption.
The SFO operates under two sets of investigative powers.
Part 1 of the SFO Act provides that it may act where the Director “has reason to suspect that an investigation into the affairs of any person may disclose serious or complex fraud.”
Part 2 of the SFO Act provides the SFO with more extensive powers where: “..the Director has reasonable grounds to believe that an offence involving serious or complex fraud may have been
committed…”
The SFO’s Statement of Intent 2010-2012 sets out the SFO’s three year strategic goals and performance standards. It is
available online at: www.sfo.govt.nz
Crimes Act 1961 offences:
Section 220: Theft by person in special relationship
(1) This section applies to any person who has received or is in possession of, or has control over, any property on
terms or in circumstances that the person knows require the person—
(a) to account to any other person for the property, or for any proceeds arising from the property; or
(b) to deal with the property, or any proceeds arising from the property, in accordance with the requirements of any
other person.
(2) Every one to whom subsection (1) applies commits theft who intentionally fails to account to the other person as so
required or intentionally deals with the property, or any proceeds of the property, otherwise than in accordance with
those requirements.
(3) This section applies whether or not the person was required to deliver over the identical property received or in
the person's possession or control.
(4) For the purposes of subsection (1), it is a question of law whether the circumstances required any person to account
or to act in accordance with any requirements.