$555,835 frauds, thefts claim

Press, 25 August 1981, Page 7

$555,835 frauds, thefts claim

Thefts and frauds involving a total of $555,835 were alleged in the. District Court yesterday against a company director, in relation to money said to have been invested by the public in syndicated ' real estate and cattle projects.

The defendant. John Graham Williams, aged 44. of Auckland, has elected trial by jury on three charges of theft by failing to account, three of theft by misappropriation,, and three of fraud.

The hearing, which is expected to take about three days, is before Messrs M. B. Hayes and V.' C. Empson. Justices of the Peace. Depositions or statements of evidence of more than 20 prosecution witnesses are to be heard.

Mr. G. K. Panckhurst appears for the Crown, and Mr G. Gotlieb. of Auckland, for the defendant. In his outline of the Crowns case Mr Panckhurst said the charges related to the activities of the defend-

ant when he was the principal person engaged in running a Christchurch company. Pacific Syndicates (N.Z.). Ltd.

The company had operated from the early 19705. initially in promoting real estate property syndicate ventures.

In each case brochures were printed for circulation to the public, inviting investment.

Investors' money was sent to Pacific Syndicates, which was responsible for looking after the funds. Investors were to receive a quarterly interest on their investments, and repayment of capital after the investment term, usually three years, or five years.

The brochures said the investments w r ere gilt edged, being secured by mortgages over the real estate projects. The total amount of mortgage secured was not greater than 75 per cent of the property valuation.

Mr Panckhurst said a number of real estate promotions were embarked on

fium the early 19705, and two of these were the subject of charges. These were the Parklands Hospital, and the Chateau Commodore, contributory mortgage schemes. As a result of new legislation in 1974. which stopped investment in this type of syndicate arrangement Pacific Syndicate responded by introducing a new form of promotion to import and breed cattle. A number of cattle schemes were promoted.

The initial concept was that Simmental cattle would be imported and the company would tend to the management . of the imported heifers over a three-year period. During that, time the progeny would be sold to a second company mentioned in the brochures, and captial thus generated.

Investors w r ere to receive quarterly returns, in the same way as the real estate projects. Mr Panckfiurst said the essence of the Crown's alle-

gallons was that, the defendant did not honour the obligations set out in the brochures, in that money advanced by the public was not used in the manner that the brochure clearly set out it would be used. ’

It was alleged that $5OOO subscribed to the Parklands Hospital contributory mortgage was used in the company's own account to payoff an overdraft, and that a sum of $43,000 in the Parklands Hospital scheme, subscribed to finance extensions to the hospital, went instead into a syndicated cattle investment’.

This and another $lOB,OOO subscribed to the Chateau Commodore contributory mortgage scheme were put into cattle accounts which had nothing to do with real estate projects at all. the Crown alleged. Mr Panckhurst said the Crown's case was that the defendant was a trustee, holding the money in the same way as solicitors and accountants held clients'

funds.. It was alleged that he used the money outside the terms of the payments to him.

He misapplied the money* and thus committed theft, under provisions of the Crimes Act.

Mr Panckhurst said the Crown similarly alleged the defendant had riot used funds subscribed to the cattle ven ; tures. for the purpose for which they were advanced. The Crown contended that the defendant, being a director of the company, was knowingly concerned in the printing of brochures which he knew to have false .information. and which induced people to invest money. None of the cattle proposed for the schemes was over paid for, or came into the hands of the defendant, or company. Mr Panckhurst alleged. Likewise, he said, representations in the brochure that cattle would be registered with the controlling authority for the Simmintal breed, were unfounded.