The last key figure of failed financier Five Star to be dealt with by the court has been sentenced to five years' jail following his guilty plea on charges brought by the Serious Fraud Office (SFO).
Neill Williams pleaded guilty in June, part-way through his trial, to two charges of theft brought by the Serious Fraud Office relating to the operation of Five Star Finance and its subsidiaries.
Williams, already convicted on Securities Act charges laid by the Financial Markets Authority (FMA) and sentenced to three years and seven months in jail in April for misleading investors through Five Star's prospectus, had been remanded in jail until today's sentencing.
Today's decision will increase Williams' jail term by one year and five months.
During a sentencing hearing in the High Court in Auckland this morning, Crown prosecutor Brian Dickey said Williams hid his involvement in Five Star to prevent his bankruptcy and prior business failures scaring off investors.
"This was a very cynical fraud, and the amounts involved are large - $42 million," Dickey said.
He said the company effectively operated like a "washing machine," recycling bad related-party loans to hide their poor performance and links with directors and Williams.
Sam Wimsett, acting for Williams, said his client was a cancer survivor with a heart conditions. "He is 79 years of age and has had four months in prison already," he said.
Wimsett said his client and his wife were now bankrupt and this gave him some insight into the consequences of his offending for investors.
Justice Murray Gilbert said Williams was a "central figure" in the operation of Five Star and was a "de facto director."
Gilbert said his sentence needed to account for both his Crimes Act and Securities Act offending and sentenced him to five years in prison, to be served concurrently with his earlier sentence.
Gilbert declined to give any discount for Williams' guilty plea, coming as it did mid-way through his trial and following a tortuous series of legal protests.
Five Star Finance and its subsidiary, Five Star Consumer Finance, went into receivership in 2007 owing $54 million to investors. They have since recovered just 22.5 cents in the dollar.
Crown prosecutor Brian Dickey said at the start of his trial that while Williams was not formally a director of Five Star Finance or Consumer Finance, he was variously alleged to be the "mastermind" of related-party transactions that misled investors and breached the company's trust deed.
The firm's three directors - Marcus Macdonald, Nicholas Kirk and Anthony Bowden - have already pleaded guilty to the charges they faced and fulfilled their punishments.
Williams initially referred to the group as the "three musketeers", and from 2001, when Bowden joined as a non-executive director, the "four musketeers".
- © Fairfax NZ News
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