National Party president testifies at fraud trial

Peter Goodfellow enters the Auckland District Court where he is giving evidence in fraud trial.
Peter Goodfellow enters the Auckland District Court where he is giving evidence in fraud trial.

National Party president Peter Goodfellow has told the Auckland District Court how scruffy shoes gave rise to suspicions his friend had fallen for a conman.

Goodfellow is a witness in the trial of Loizos Michaels, who faces 31 fraud charges in relation to allegedly fictitious schemes in which dozens of investors lost more than $3 million. Michaels has pleaded not guilty.

Goodfellow said he grew suspicious of Michaels after he met the alleged fraudster during lunch at swanky restaurant Euro in Auckland's Viaduct. .

The August 2007 lunch meeting came after he had lent $114,000 to his good friend Stephen Lyttelton, who said the funds were needed for Michaels' schemes as a "show of good faith."

Goodfellow said Michaels claimed during the lunch meeting to have connections to the textile trade where his family firm had a 50-year supply contact – the length of which Goodfellow had never heard of in business.

"It made me suspicious he didn't know what he was talking about," he said.

Other observations also raised Goodfellow's eyebrows.

"His clothes were not particularly sharp and his shoes were scruffy," he told the Auckland District Court.

"His appearance just wasn't up to scratch, I felt. He had an older cellphone and ascribed it to the fact that he didn't want to be ostentatious or showy – but it was not the phone I would expect somebody of his claimed substance to have."

Goodfellow said from this point on he cut ties with Michaels and urged Lyttelton to do the same. "The lunch was confirmation for me that this was not somebody I would lend money or invest money with. I felt that Stephen [Lyttelton] was not listening to these conversations I was having."

The court had earlier heard testimony from former Christchurch Casino boss Lyttelton, who described Goodfellow as "my best friend". Lyttelton told of how he had been convinced by Michaels to quit his job as acting chief executive of the casino and move to Auckland to work on an allegedly fictitious takeover of SkyCity Entertainment Group.

Lyttelton said he had discussed his involvement in these schemes in positive terms numerous times with Goodfellow, and borrowed $114,000 in two installments from his friend to hand over in cash to Michaels.

Goodfellow told the court of his long friendship with Lyttelton, a relationship that went back 30 years and that he was godfather to the casino executive's daughter.

He said he was told by Lyttelton he had quit his job with Christchurch casino to work with a man called Michael Loizos who was offering a salary Goodfellow described as "astronomical."

Goodfellow said he agreed to join the board of New Zealand Casino Services (NZCS) in May 2007 after being asked by Lyttelton.

"Stephen wanted me to be involved with that company. I didn't have any real knowledge of the casino industry, but from more of a business oversight perspective I was happy to be involved."

Goodfellow said the purpose of NZCS was initially unclear. "It was all a bit vague and he [Lyttelton] really indicated that we would find out exactly what it was going to do in time. But I was happy to help him with that."

Shortly after the formation of this company, Goodfellow said Lyttelton began requesting money.

"He said that the people he was involved with, Michael in particular, were keen for him to show good faith and to be involved with some of their activities and he wanted to borrow some money from me to enable him to do that."

Goodfellow told the court Lyttelton first requested $50,000, then $64,000.

"It was always urgent, needed the same day. The pressure was on for me to say yes or no. The second occasion I really quizzed him as to why he needed cash. That was very unusual in my experience that you make a payment of such a large amount in cash," he said.

Goodfellow quizzed his friend as to the need for cash on the second occasion, and in such a short timeframe, but was reassured with claims it was legitimate.

Lyttelton told the court that Goodfellow refused to loan him more money on a third approach and suggested his friend was the victim of a scam.

The court heard during opening arguments that Goodfellow subsequently employed private detectives to look into Michaels, with this evidence being significant in convincing Lyttelton to lay a complaint with the Serious Fraud Office.

Goodfellow is part of the NBR Rich List family that has a major stake in fishing company Sanford. In 2009 he was elected president of the National Party.

The trial continues.