Mayer mortgage fraud trial aborted

20:52, Jul 28 2012

One of the biggest and most complex mortgage fraud trials in New Zealand history has had to be aborted after seven months - at a cost to the taxpayer of at least $140,000 - because of the defendant's poor health.

Malcolm Mayer, an Auckland property developer, was on trial before a judge alone on multiple charges relating to a $50m fraud in which he allegedly used the names of family members and associates, including penniless immigrants, to take out loans from Trustees Executors Ltd, chaired by former prime minister Jim Bolger. TEL owned and administered the $242m Tower Mortgage-Plus fund.

Mayer, a champion bridge player, would allegedly artificially inflate property purchase prices to secure loans, several of which defaulted, leaving thousands of investors out of pocket.

The Sunday Star-Times first revealed details of Mayer's activities in 2009.

The defence and prosecution are blaming each other for multiple delays in the case, which began in the Auckland District Court last November before Judge Roy Wade.

The prosecution finally finished calling its evidence last month, but the defence case could not be completed because of Mayer's ill health. Earlier this month Judge Wade aborted the trial.


The Serious Fraud Office, which conducted the investigation, has written to witnesses saying a hearing will be held in September to determine if Mayer is fit to stand trial again. If so, a new trial will be held in October next year, and all the evidence will have to be heard again.

Under the Official Information Act, the SFO released figures to the Star-Times on the cost of the case. It said the investigation phase cost just over $60,000 and the prosecution phase just over $74,000. That did not include costs incurred by Crown counsel, who prosecuted the case in court.

It is understood the prosecution has been frustrated by what it believes have been delaying tactics by the defence, but defence lawyer Greg Bradford said they only had themselves to blame.

"It's got a lot to do with dealing with a 90-count indictment, which the Crown decided to proceed with. That's why it's taken so long. It's effectively 90 separate trials in the one hearing. They could just have easily proceeded with a 15-count indictment. They are alleging three different offences in respect of one transaction, so they are covering all their bases."

Asked if stress around the length of the trial had caused Mayer's health problems, Bradford said: "He's suffered from the process; it's made it pretty difficult. The judge made the decision [to abort] based on what he saw and heard. It was pretty obvious [Mayer] wasn't up to it."

But SFO director Adam Feeley said: "We emphatically reject any suggestion that the [prosecution] has in any way been responsible for the inordinate delays and disruptions which we have had to accept during this case.

"It is also absurd to suggest that what amounts to probably the largest and longest alleged mortgage fraud in New Zealand's history should have been scaled back to simplify matters. The charges laid reflect what we believe to be the seriousness of this case."

Throughout the trial, Mayer's defence team maintained that Mayer's former business partner, Simon Turnbull, was the mastermind of the fraud. Turnbull is named on several indictments, but is believed to be living the high life in Asia.

Sunday Star Times