Investors who lost millions in the collapse of Five Star Finance have welcomed the five-year prison sentence handed out to the "shadow director" at the heart of the failed finance company.
Neill Williams pleaded guilty in June, part-way through his trial, to two charges of theft brought by the Serious Fraud Office (SFO) relating to the operation of Five Star Finance and its subsidiaries.
He was sentenced today in the High Court in Auckland to five years' jail, to be served concurrently with the three years and seven months handed out after prosecution by the Financial Markets Authority in April. That means he will serve an extra one year and five months in jail.
Investor Les Sweetman, who attended the hearing, said people who lost money felt "betrayed" by Williams and Five Star's directors.
He said he was pleased the judge had handed down a longer sentence than the Crown was seeking, but he would have preferred more.
"We'd all like to have seen it to be longer, given the deliberate greed and deception," he said.
Crown prosecutor Brian Dickey told the court that Williams hid his involvement in Five Star to prevent his bankruptcy and 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 operated like a "washing machine", recycling bad related-party loans to hide their poor performance and links with directors and Williams.
Sam Wimsett, for Williams, said his client was a cancer survivor with a heart condition. "He is 79 years of age and has had four months in prison already."
He said Williams and his wife were bankrupt, and this gave Williams 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 functioned as a "de facto director". He declined to give any discount for Williams' guilty plea.
SFO acting chief executive Simon McArley said the sentencing drew a line under the finance company meltdown, and his office was now focusing on white-collar offending in other areas.
He said cases of insurance fraud, particularly related to the Christchurch earthquake rebuild, as well as bribery and corruption, were being investigated.
"The finance company part of it is finished, but the workload's steady - it's just coming from different areas," he said.
Five Star Finance and its subsidiary, Five Star Consumer Finance, went into receivership in 2007 owing $54m to investors. They have since recovered just 22.5 cents in the dollar.
Dickey said at the start of the trial that while Williams was not formally a director of Five Star Finance or Consumer Finance, he was 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 pleaded guilty to the charges they faced and fulfilled their punishments.
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