Blue Chip sales rep sentenced on fraud charges

Media Release
12 April 2012

Blue Chip sales rep sentenced on fraud charges

Rachel Anna Jarvis (34) has been sentenced to seven months Home Detention, 200 hours community work, and $50,000 reparation in the Invercargill District Court.

Former Blue Chip Southland sales person, Ms Jarvis, pleaded guilty in February to five offences under the Crimes Act, in relation to charges laid by the Serious Fraud Office (SFO) in connection with mortgage frauds. The charges included one count of forgery and four counts of using a forged document for personal benefit.

Jarvis altered lending documents to secure loans worth $1,469,000 for property investments, subsequently leaving investors with properties that they would otherwise have been unable to afford.

At the time, Jarvis was a sales representative for residential developers, Blue Chip. However in sentencing, his Honour Judge Kevin Phillips commented that Jarvis was not being sentenced in relation to the collapse of Blue Chip.

SFO Chief Executive, Adam Feeley, said that while the level of offending was at the lower end of SFO's threshold for investigations, the high levels of public interest in matters related to Blue Chip was a factor in the SFO prosecuting the case.

“This case demonstrates that we have retained an open mind on all matters connected with the Blue Chip group, and if further evidence of fraud comes to light, we will investigate those matters as well.”

The case was originally referred to the SFO by the Criminal Investigation Branch (CIB) of the Invercargill Police following complaints by 23 people in Southland, and an investigation commenced on 18 August 2010.

“A significant part of this investigation was conducted by the Invercargill Police, and the case is a good example of how the resources and skill of different law enforcement agencies can effectively combine to achieve results,” Mr Feeley said.
ENDS


Notes to editors
1. Background to investigation
Rachel Anna Jarvis held two roles. The first was working for Blue Chip selling residential investment properties to potential investors The second was working for Town and Country Finance brokering mortgage applications to lending institutions.

When Jarvis submitted some mortgage applications to banks on behalf of those she had convinced to invest in Blue Chip products, she changed some of the information supplied to enhance the applications and ensure they were accepted. Exaggerating income, creating fake letters of employment, fraudulently using other companies’ logos on documents, creating fake tenants for applicants and taping applicants’ signatures onto unapproved statements were her methods for obtaining some of the mortgages.

The investors were unaware of the incorrect information contained within their applications and the false documents were submitted to the bank.

The case was originally referred to the SFO on 1 July 2010 by the Criminal Investigation Branch (CIB) of the Invercargill Police following complaints by 23 people in Southland.
After considering the referral from the Police, the Director determined that there were reasonable grounds to suspect an offence involving serious or complex fraud may have been committed.
An initial investigation was started on 12 July 2010 under Part I of the SFO Act. This was upgraded to a Part II investigation on 18 August 2010.

2. Crimes Act offences

256 Forgery
• (1) Every one is liable to imprisonment for a term not exceeding 10 years who makes a false document with the intention of using it to obtain any property, privilege, service, pecuniary advantage, benefit, or valuable consideration.
257 Using forged documents
• (1) Every one is liable to imprisonment for a term not exceeding 10 years who, knowing a document to be forged,—
o (a) uses the document to obtain any property, privilege, service, pecuniary advantage, benefit, or valuable consideration; or
o (b) uses, deals with, or acts upon the document as if it were genuine; or
o (c) causes any other person to use, deal with, or act upon it as if it were genuine.
3. Role of the SFO

The Serious Fraud Office (SFO) was established in 1990 under the Serious Fraud Office 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 I 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 II 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 2011-2014 sets out the SFO’s three year strategic goals and performance standards. It is available online at: www.sfo.govt.nz

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