Bankruptcy ruling for Renshaw

01:25, Apr 07 2014

A former fraudster who was jailed for seven years for fraud totalling $6.4 million has been adjudicated bankrupt.

Wellington tax adviser Patrick John Renshaw had until today to pay the Bank of New Zealand a compromised debt of nearly $12,000.

BNZ had sought the order last month after Renshaw failed to pay an undisclosed amount.

But in the High Court in Wellington this morning Renshaw consented to BNZ's application to adjudicate him bankrupt.

Renshaw was previously involved in the high-profile collapse of Upper Hutt law firm Renshaw Edwards in 1992.

He was released on parole 32 months into a seven-year sentence on 42 charges of fraud and theft involving $6.4m of clients' funds.

His partner, Keith Edwards, was jailed for six years on 51 charges of theft involving $3.5m.

Edwards served two years and seven months of his six-year sentence.

The bizarre collapse of the firm occurred after the two partners committed the respective multimillion-dollar frauds separately and unknown to each other.

The collapse eventually hit the pockets of 2800 of the country's senior lawyers, resulting in tougher control of lawyers' trust funds.

In 1996 the Law Society settled more than 400 Renshaw Edwards claims totalling about $29m.

The settlement cost the senior lawyers $10,000 each, as well as their annual $500 fidelity fund fee because their fidelity fund could not cover the payout.

The men were prosecuted for less than $10m by the Serious Fraud Office, but the society accepted the men had caused clients losses of $29m.