The Auckland District Court sentenced a former Director of National Finance 2000 Limited (National Finance) to six years in jail on October 20, 2011.
The Court said Trevor Allan Ludlow (52) was found guilty of seven charges under the Crimes Act including false accounting and theft by a person in a special relationship.
National Finance was placed into receivership on May 9, 2006 owing investors about $21 million. Following a complaint by PricewaterhouseCoopers, which acted as the Receiver, the SFO determined that an investigation into the affairs of National Finance 2000 Limited may disclose serious or complex fraud.
John Gray (42) was employed by the company as an accountant.
In November 2010, he pleaded guilty to theft by a person in a special relationship and one charge of false accounting. He was sentenced to 18 months imprisonment, but on appeal reduced to nine months home detention.
Charges were laid against Mr Ludlow and John Gray in October 2009.
Adam Feeley, Chief Executive of the SFO said that Mr Ludlow was found to have breached the terms of the Trust Deed under which National Finance operated, defrauding investors of an estimated $3.5 million.
“This included approximately $2.7 million of unauthorised or unsecured advances made to his Payless Car group of companies; as well as undisclosed related party transactions totalling over $800,000 to an audio company; a property in Fiji; and land purchased for another company he owned,” he said.
National Finance 2000 Limited traded as a finance company accepting deposits from the public and investing those deposits mainly in motor vehicle loans, through motor vehicle dealers including the related Payless Cars Group of Companies.
Mr Ludlow was the sole shareholder and a Director of the company.
“National Finance operated under the terms of a Trust Deed, as required under the Securities Act and Regulations. Such Trust Deeds are common to all finance companies. The Trust Deed imposed restrictions on what investors’ money could be used for, to whom it could be lent, and how much could be lent to parties related to the directors, such as spouses and relatives,” an SFO press release said.
Mr Feeley said that concluding the investigations and prosecutions of failed finance companies has been a priority over the past 18 months.
He said one among the objectives of SFO was to focus on cases, which would make a difference to restoring investor confidence.
“Kiwi investors understand that criminal proceedings cannot restore the losses they have suffered, but equally we believe that they will take some confidence in knowing that those who have so fundamentally breached investor trust can and will be held to account,” he said.
