Property developer pleads guilty to bribery

11 May 2012

Property developer pleads guilty to bribery

Gregory Alexander Hutt (54) today pleaded guilty in the Wellington High Court to one Crimes Act bribery charge brought by the Serious Fraud Office (SFO).

Mr Hutt’s plea arises from his role in a corruption and bribery case involving the Accident Compensation Corporation (ACC) and the successful prosecution and sentencing of co-offender Malcolm David Mason in March 2011.

Mr Hutt, a property developer, paid Mr Mason, the former Property Manager at the ACC, a corrupt payment of $160,000.00 to ensure he gained the opportunity to profit from the construction and leasing of a new ACC branch office in Whangarei.

The SFO welcomed the guilty plea.

SFO Chief Executive, Adam Feeley, said “While corruption in New Zealand is not a way of life, it is, on occasions, a fact of life. Cases such as this serve as a reminder that complacency about corruption in New Zealand would only put our international reputation at risk. As with any form of financial crime, law enforcement agencies need the assistance of whistle-blowers to help detect what is a particularly insidious crime."

Mr Hutt was remanded on bail for sentencing on 15 June 2012.

Background to investigation

Gregory Alexander Hutt (54) was the director of a construction company, Hi-Tech Commercial Interiors. In the course of conducting his business, Mr Hutt had cause to deal with Malcolm David Mason, a former National Property Manager for the Accident Compensation Corporation (ACC). The nature of the business generally involved the fit-out of office interiors at ACC premises by Mr Hutt’s company.

Mr Hutt’s relationship with Mr Mason developed to a point of personal friendship.

Mr Mason’s role involved responsibility for the procurement of premises for the use of ACC, tendering for the development of such premises and negotiating lease terms between ACC and the landlords of those premises.

In late 2006, ACC identified a need to replace some of its existing premises. As National Property Manager, Mr Mason was responsible for overseeing and controlling the process.

Mr Mason passed details of ACC intentions to property developer, Mr Hutt. This information allowed the developer to purchase the site that Mr Mason subsequently recommended to his superiors as being suitable for the new ACC branch.

Mr Mason’s influence at ACC ensured that Mr Hutt received the opportunity to develop the new building and agree a long term lease with the ACC. Once the lease was secured, Mr Hutt sold the building for a profit and paid Mr Mason $160,000.00 from the proceeds in July 2009.

In April 2010 media reports revealed the involvement of the Serious Fraud Office in investigations into the affairs of Mr Mason and others. Following this announcement Mr Hutt and Mr Mason met to discuss how to explain the $160,000.00 payment made to Mr Mason

The two men agreed to create a document indicating that Mr Hutt had actually loaned Mr Mason $160,000.00 and that this amount plus 6% interest was repayable after 12 months . The document was titled ‘Acknowledgement of Debt’.

On 26 July 2010, the day before Mr Mason was first interviewed by the Serious Fraud Office, Mr Mason transferred $9,600.00 to one of Mr Hutt’s bank accounts. This amount equals 6% of $160,000.00.

Crimes Act offences
Section 105: Corruption and bribery of official

(1) Every official is liable to imprisonment for a term not exceeding 7 years who, whether within New Zealand or elsewhere, corruptly accepts or obtains, or agrees or offers to accept or attempts to obtain, any bribe for himself or any other person in respect of any act done or omitted, or to be done or omitted, by him in his official capacity.

(2) Every one is liable to imprisonment for a term not exceeding 7 years who corruptly gives or offers or agrees to give any bribe to any person with intent to influence any official in respect of any act or omission by him in his official capacity.

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 Annual Report 2011 sets out its achievements for the past year, while the Statement of Intent 2011-2014 sets out the SFO’s three year strategic goals and performance standards. Both are available online at: www.sfo.govt.nz

ENDS

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