Former mayor 'lost everything' before jail
The former Hawke's Bay mayor and lawyer sentenced to more than four years' jail for his role in a multi-million dollar fraud says he has lost everything, and his ego clouded his judgment.
Hugh Hamilton, 63, was found guilty in May of obfuscating links between his client and Belgrave Finance, allowing prohibited related-party loans that was estimated to have cost investors around $14 million.
Hamilton - who served two terms as mayor of Central Hawke's Bay District Council from 1989 to 1995, and was Belgrave's former legal adviser and partner at DAC Legal - made an emotional statement to the judge expressing his remorse.
"My sense of shame and feeling of deep regret will follow me to my grave," Hamilton said.
He accepted the judgment, he said.
"I do not seek to minimise my role in relation to the activities of Belgrave Finance and I am fully prepared to accept the consequences."
He owned no assets and had recently gone on the unemployed benefit, Hamilton said.
"I have lost everything. I no longer have a career or a standing of any sort within my community or within my former profession."
Hamilton was sentenced in the High Court in Auckland today to four years and nine months' imprisonment on 14 charges of theft by a person in a special relationship. The charge carries a maximum sentence of seven years.
In 2008 Belgrave collapsed, resulting in 1268 mostly older investors losing about $22m.
Summing up at sentencing today, Justice Faire said Hamilton had caused great "emotional and physical suffering" to investors most of which were elderly people who lost about 90 per cent of their investment.
Justice Faire said Hamilton's financial gain from his involvement with Belgrave was the fees collected by his law firm.
"The fee from the offending could not have been insignificant."
The Crown sought a prison sentence of six years to six-and-a-half years, while Hamilton's lawyer requested three years.
During the trial, 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 total assets were Schofield loans.
Last year former Belgrave Finance director Shane Buckley was jailed for three years and fellow director Stephen Smith was jailed for four years.
Schofield's prosecution was stayed because was suffering from a terminal illness.
Crown lawyer Nick Williams said Hamilton had shown no remorse during the investigation.
He said the offending occurred over a 34-month period and Hamilton knew what he was doing was wrong.
"There's a distinction between this and spur of the moment offending," Williams said.
"Mr Hamilton was involved right from the start giving advice.
"He was a key cog in the machine of this offending."
Williams said Hamilton disguised his communication with Belgrave directors through emails which had all the hallmarks of a "clandestine operation".
Hamilton's actions helped bring damage to investors, the legal profession and the financial markets, Williams said.
In May last year, Hamilton was struck off as a lawyer by the Law Society after he was found to have misused $62,000 advanced by a client.
Hamilton's lawyer, David Young read out a number of references which described him as a hard working, community stalwart, who showed leadership, put others before himself and built bridges with local iwi.
As the references were read out, Hamilton wiped tears from his eyes as he stood in the dock.
"This is a man who has spent a large part of his life going out of his way to help other people," Young said.
But while working for Belgrave "he pushed the envelope too far", he said.
Belgrave provided funding for commercial and residential property developments, sourced mainly from the issue of securities to the public in the form of debenture stock and convertible capital notes.
At the time Belgrave was placed into liquidation, it was the 20th finance company to collapse in two years, SFO director Julie Read said.
"The SFO have been acutely aware that the finance company collapses hindered public confidence in the integrity of our financial markets.
"The sentencing of Mr Hamilton concludes another prosecution and is one step closer to addressing and rebuilding that confidence."
FMA director of enforcement and investigations, Belinda Moffat, said Hamilton's sentence reflected the seriousness of the offending.
"Professional advisers play a critical role in companies that raise money from the public, and they have a responsibility to ensure they do not enable wrongdoing. We hope this decision and the conclusion of the case will help to promote high standards of conduct in New Zealand's financial markets," Moffat said.