Nigel Brent O’Leary (57), a former director of Rockforte Finance Limited (Rockforte), entered guilty pleas in the Wellington High Court on October 3 to Serious Fraud Office (SFO) charges.
Mr O’Leary, who was due to stand trial in Gisborne the following week, pleaded guilty to the nine charges he was facing. His two former colleagues Colin Mark Simpson and John Patrick Gardner had pleaded guilty at earlier appearances.
Mr O’Leary’s plea brought the prosecution to an end.
Ministry of Economic Development’s National Enforcement Unit and Financial Markets Authority also provided support and assistance to SFO on this case.
The Background
Rockforte was established in 2003 as a provider of consumer and commercial financial services. A majority of its investors were from the Poverty Bay region. It operated under a trust deed that prohibited it from using investors’ funds to make loans to related parties in excess of 2% of its total tangible assets without the consent of the trustees.
Its predominant activity was financing the purchase of second-hand motor vehicles (primarily Japanese imports) with loans secured against the vehicles.
In February 2009, Rockforte obtained approval for acceptance into the CRDGS for a period of two years. However, the Crown Deed of Guarantee was withdrawn effective from 1 January 2010.
Rockforte was placed into receivership on May 10, 2010.
The SFO opened its investigation into Rockforte on December 6, 2010, following discussions with its Receivers, Indepth Forensic Limited. Rockforte was placed into liquidation on February 15, 2011. The Official Assignee was appointed liquidator.
Mr O’Leary’s charges related to theft by person in special relationship, obtaining by deception, false statement by promoter and false accounting.
The false reporting lead to the acceptance of Rockforte into the Crown Retail Deposit Guarantee Scheme, and the subsequent taxpayer funded bailout.
Personal interests
A significant portion of Rockforte investors’ money was used as a source of funding for the personal business interests of Mr O’Leary.
Those business interests included Gisborne Haulage Limited and Michael Ward 1969 Limited, which operated the Jean Jones label throughout New Zealand.
These businesses eventually failed.
SFO’s charges mainly related to this lending and the manner in which it was reported in Rockforte’s accounts.
SFO Acting Chief Executive, Simon McArley said that the total losses amounted to $3.86 million, which had a significant effect on the Gisborne community and their confidence in local financial institutions.
“It is hoped that the successful prosecution of this offending will go some way to restoring that confidence and demonstrating that SFO prosecutions do ensure those who commit financial crime are held to account,” he said.
Mr Simpson was earlier sentenced to 11 months’ home detention and 200 hours of community work. Mr Gardner and Mr O’Leary will be sentenced in Gisborne High Court on October 24, 2013.
Serious Fraud Office Press Release
