Jailed Datasouth director bankrupted
High-living Datasouth director Gavin Clifford Bennett has been declared bankrupt at the Christchurch High Court today.
Bennett was not in court this morning as he is in prison, serving an eight-year sentence for a $103 million fraud he used to finance a free-spending, grandiose lifestyle.
Justice Gendall ordered Bennett bankrupt at the behest of South Canterbury Finance.
That means he cannot be a director for three years (time he will spend behind bars anyway) and most of his assets can be sold to pay his debts.
South Canterbury Finance is out of pocket $23m from Bennett's actions, however the failed finance company was covered by the Crown retail guarantee scheme so the taxpayer, rather than small investors, are forced to cover the loss.
Bennett's company, DataSouth, arranged loan finance to provide computer systems for clients through South Canterbury Finance, but the arrangements turned out to be a Ponzi scheme.
The clients were real, but the money was not going toward the computer equipment.
Instead, Bennett used the money for expensive hotels, fine dining, female escorts and travel.
During the fraud, between 2005 and 2011, his expenses included the rent for two luxury residential apartments in The Rocks, Sydney, of A$463,000 (NZ$596,000), and payments to various female companions of A$900,000.
Other costs included international air travel for himself and various companions totalling A$161,000, and he bought Louis Vuitton, Cartier and Chanel clothing, totalling A$163,000.
Bennett also spent A$429,000 on food and beverages.
Bennett created DataSouth in 1993, the company went into liquidation in March last year with 42 staff losing their jobs.
McGrath Nicol partners William Black and Kerryn Downey, both of Auckland, are the receivers of South Canterbury Finance.