A number of entrepreneurs and businesses that do not have the benefit of in-house legal expertise are unaware that they may be breaching some provisions of New Zealand’s Crime Act relating to their business dealings, claims or promises made in private or through public announcements, notices and advertisements. The Serious Fraud Office has published a number of provisions of the Crimes Act, indicating the instances in which it may intervene as an enforcement agency.
Section 220: Theft by person in special relationship
1. This section applies to any person who has received or is in possession of, or has control over, any property on terms or in circumstances that the person knows require the person (a) to account to any other person for the property, or for any proceeds arising from the property; or (b) to deal with the property, or any proceeds arising from the property, in accordance with the requirements of any other person.
2. Everyone to who subsection (1) applies commits theft who intentionally fails to account to the other person as so required or intentionally deals with the property, or any proceeds of the property, otherwise than in accordance with those requirements.
3. This section applies whether or not the person was required to deliver over the identical property received or in the person’s possession or control.
4. For the purposes of subsection (1), it is a question of law whether the circumstances required any person to account or to act in accordance with any requirements.
Section 223: Punishment of theft
Everyone who commits theft is liable as follows: (a) in the case of any offence against section 220, to imprisonment for a term not exceeding seven years; or (b) if the value of the property stolen exceeds $1000, to imprisonment for a term not exceeding seven years; or (c) if the value of the property stolen exceeds $500 but does not exceed $1000, to imprisonment for a term not exceeding one year; or (d) if the value of the property stolen does not exceed $500, to imprisonment for a term not exceeding three months.
Section 242: False statement by promoter, etc
Everyone is liable to imprisonment for a term not exceeding 10 years who, in respect of any body, whether incorporated or unincorporated and whether formed or intended to be formed, makes or concurs in making or publishes any false statement, whether in any prospectus, account, or otherwise, with intent (a) to induce any person, whether ascertained or not, to subscribe to any security within the meaning of the Securities Act 1978; or (b) to deceive or cause loss to any person, whether ascertained or not; or (c) to induce any person, whether ascertained or not, to entrust or advance any property to any other person.
In this section, ‘false statement’ means any statement in respect of which the person making or publishing the statement (a) knows the statement is false in a material particular; or (b) is reckless as to whether the statement is false in a material particular.
Next Issue: Penalties relating to false statements including advertisements
Source: Serious Fraud Office, Auckland
