Legal adviser convicted over collapse of Belgrave
Authorities have welcomed the conviction of a finance company legal adviser for enabling his client to breach its trust deed and take out related-party loans.
Former mayor and lawyer Hugh Hamilton, 62, was found guilty in the High Court in Auckland yesterday of obfuscating links between his client and Belgrave Finance, allowing prohibited related-party loans that cost investors millions. He is on bail until sentencing on July 4.
Hamilton, Belgrave's former legal adviser and partner at DAC Legal, was convicted on 14 charges of theft by a person in a special relationship.
Justice John Faire found Hamilton not guilty on a further 27 charges of theft and making false statements after the joint prosecution brought by the Financial Markets Authority (FMA) and the Serious Fraud Office (SFO).
Justice Faire said Hamilton knew the transactions were in breach of the trust deed and "intended to assist in the offending".
After the verdict, Belinda Moffat, the FMA's head of enforcement, 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."
Last May Hamilton was struck off as a lawyer by the Law Society after he was found to have misused $62,000 advanced by a client.
In the High Court, Hamilton was accused of structuring related-party transactions to disguise client Raymond Schofield's controlling interest in Belgrave. By March 2008, just before receivers were appointed, 45 per cent of Belgrave's assets were loans to Schofield entities. Belgrave collapsed in May 2008 owing 1268 investors about $20m. Receivers had recovered $3.5m.
- The Dominion Post