The Auckland District Court sentenced former Lion Foundation Chief Executive David John Conroy to one year home detention and 300 hours of community service on April 19.
A jury found him guilty of one count of false accounting and two counts of false accounting by an employee after a two week trial.
As reported in our March 15, 2011 issue, the charges related to three journal entries made between 2002 and 2004 in the Foundation accounts, which resulted in the write-off of $520,000.00 from a debt balance owed by ‘Strathern Inn’ in Invercargill.
The Court heard that Mr Conroy made the journal entries without the knowledge or approval of the Board to hide the true amount owed by Strathern Inn.
The Foundation provided 18 gaming machines to Strathern Inn, owned by Sharon and Wayne Ogilvy but the former managed the business.
The Foundation is the authorised owner of gaming machines installed at its members’ premises but delegates its operation to the premises through Site Agreements.
The Strathern Inn Site Agreement required the premises to deposit gaming machine proceeds in full into bank account of the Foundation within five working days of the weekly profit return date.
The Agreement also specified that “all proceeds should be kept separate from all other monies at all times” and that these should not be banked into her own trading account or any other account other than that of the Foundation.
The weekly gaming machine proceeds of Strathern Inn was generally between $20,000 and $35,000, averaging about $25,000, throughout the period of Ms Ogilvy’s ownership.
The Serious Fraud Office (SFO) brought the charges against Mr Conroy.
Director Adam Feeley said that the case highlighted that major frauds often rely on persons in professional roles to aid the principal offender.
“Mr Conroy effectively hid someone else’s offending, and the fact that he made no direct personal gain from this does not in any way excuse his offending. The willingness of some professionals to acquiesce to the instructions of their clients or superiors was a significant factor in aiding fraud,” he said.
Mr Feeley said organisations had the right to expect employees, particularly professionals, to carry out their duties honestly and to challenge the unlawful conduct of others.
SFO would welcome whistle-blowers on fraud, he said.
“Members of the public can be assured that we treat such calls with absolute confidence and that there will be swift action where fraud is identified.”
