Accountant charged over transfers of funds
A Te Awamutu accountant who allegedly took his clients' money without their permission to invest in an ill-fated cigarette company has gone on trial in Hamilton District Court.
Gary Hobbs, 45, faces 15 charges of theft by a person in a special relationship after allegedly transferring about $370,000 of his clients' money without their permission.
While working at Hobbs and Rose accountants - which subsequently went into liquidation - it is alleged he took funds from his clients to invest in an ill-fated cigarette company venture, as well as injecting some money to keep his own company afloat.
Operau farmer Neil Sydney Scott hired Hobbs as his accountant in 1999.
He alleges $140,000 was transferred from his family trust account to Hobbs' cigarette company South American Tobacco Group (SATG) Ltd.
It's alleged a further $232,000 was transferred from a second client's account - the family trust of Richard Montague Gilbert, also a farmer.
Mr Scott said he was unaware how much had been transferred until he met up with Mr Gilbert in January, 2009.
Hobbs repaid $40,700 to the Scotts before the company went into liquidation. All offending is alleged to have occurred between June 2008 and July 2009.
Todd Simmonds, on behalf of the Serious Fraud Office, said there was no dispute over whether Hobbs had taken the money, it was down to whether he had the authorisation to take it.
Mr Scott said he had no idea Hobbs was transferring his money into his clients' other accounts.
Hobbs had written a letter explaining how he would repay Scott his money, but only paid $40,700 before his company went into liquidation.
When asked by Mr Simmonds why he pulled his books from Hobbs' firm, Mr Scott said he'd lost trust in him.
"It's pretty obvious, I was having trouble getting the money back so I thought it was time to move on, I couldn't trust him anymore."
When questioned by defence lawyer Ron Mansfield, Mr Scott confirmed he would often get phone calls from Hobbs to transfer idle money sitting in cheque accounts to interest-bearing accounts.
Mr Scott denied being phoned the day before the two largest transactions - $50,000 and $65,000 - but had to concede there was a conversation after Mr Mansfield pulled out phone records.
- © Fairfax NZ News
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