Hugh Edward Staples Hamilton (62) was found guilty at the Auckland High Court on May 16, 2014 of 14 charges arising out of the collapse of Belgrave Finance Limited
The Serious Fraud Office (SFO) and the Financial Markets Authority (FMA) jointly prosecuted the defendant.
The charges related loans of more than $12 million made by the Company to various related companies between June 2005 and March 2008.
Mr Hamilton was found not guilty of 25 charges, including 11 charges of false statement by a promoter, 11 Companies Act charges of making a false statement to a trustee and three theft charges.
Justice Faire said that he was satisfied that Mr Hamilton “had knowledge that Mr Schofield, Mr Smith or Mr Buckley, through their borrowing, were causing Belgrave to be in breach of the Debenture Trust Deed.” He also found beyond reasonable doubt that Mr Hamilton “intended to assist in the offending”.
He was remanded on bail and will appear for sentencing on July 4, 2014.
Other defendants
Charges were also laid against former director Shane Joseph Buckley who pleaded guilty and was sentenced to three years’ imprisonment and former director Stephen Charles Smith who pleaded guilty and received four years’ imprisonment.
The Company’s Controller Raymond Tasman Schofield, was granted a stay of prosecution on the grounds of terminal illness, conditional upon review.
Mr Hamilton, a former barrister and solicitor, was a legal adviser to the other individuals, Mr Schofield, Mr Smith and Mr Buckley, who were charged in relation to Belgrave Finance for substantive fraudulent representations and use of Belgrave investors’ funds.
Complex case
FMA Head of Enforcement Belinda Moffat said, “Professional advisers play a critical role in ensuring compliance in financial markets. This case shows that advisers who fail in this basic obligation and who are instrumental in enabling their clients to commit financial crimes will be held accountable for their actions.”
SFO Chief Executive Julie Read said, “This was a complex matter which has been dealt with through our coordination with the FMA, ensuring the most effective and efficient application of specialist skills and resources to the investigation.”
The background
Incorporated in September 2000, Belgrave Finance provided financial accommodation and mortgage facilities for commercial and residential property developments. Funds for lending were sourced primarily from the issue of securities to the public in the form of debenture stock and convertible capital notes.
The Company was placed into receivership on May 28, 2008 owing around $22 million to approximately 1200 investors. It was placed into liquidation in April 2010 and was the 20th finance company to collapse in two years.
Following its collapse, the (then) Securities Commission made initial investigations into the company before referring the matter to SFO in June 2010. SFO Director determined that an investigation may disclose serious or complex fraud.
Source: The Serious Fraud Office
