Today at the Auckland High Court the Crown asked for a tougher sentence for Mark Brewer – a self-described “sales legend” for troubled software firm Phoenix Forex – for his conviction of breaching the Insolvency Act.
Mr Brewer was convicted last year in relation to his management of Intervest Global (NZ) while he was bankrupt, which is a breach of the Insolvency Act. That company sold horse betting software and is now in liquidation.
In July he pled guilty at the District Court and was convicted. In October Judge Stephen O'Driscoll ordered him to pay a $5000 fine and $190,000 in reparations to liquidators of Intervest for losses incurred while he was managing the company.
At sentencing, his business partner David McEwen agreed to lend $195,000 if he was not subjected to home detention, which would allow him to work overseas. Judge O'Driscoll agreed, saying an agreement to pay full reparation is unusual and suffucient punishment.
The Ministry of Business, Innovation and Employment has sought to appeal the sentence at the Auckland High Court, saying it is too light to act as a deterrent and sends a message that money can get convicted criminals reduced sentences.
Today Crown prosecutor Steve Symon argued a few months of home detention should be added to the sentence. He referred to Mr McEwen’s conditions of the sentencing as a “ransom.”
Justice John Fogarty heard arguments and reserved his decision.
At the District Court last year Mr McEwen agreed to advance the full reparation if Mr Brewer wasn’t subject to home detention so he could travel overseas for work. It was implied that Mr Brewer would work for his then-employer Phoenix Forex.
Mr Brewer is a self-described “sales legend” at Phoenix Forex, which distributed a foreign exchange software system. The Financial Markets Authority issued a warning about the company in late August.
The company is owned by Phoenix Group Ventures, which is co-owned by Mr McEwen and Kendall Twigden, Mr Brewer’s girlfriend. Phoenix Forex went into liquidation two days after Mr Brewer’s sentence.
So far, Mr McEwen has paid $130,000 in reparations on Mr Brewer’s behalf. Mr McEwen has withheld the last two payments of $30,000 since the Crown has sought to appeal Mr Brewer’s sentence.
Mr McEwen says he intends to make the final two payments if the sentence remains the same, Mr Brewer’s lawyer Brent O’Callaghan told Justice Fogarty today.
Mr Brewer, who was not in court today, has moved to Ireland to work for another startup, Paymark Autotrader, with Mr McEwen.
In an affadvit, Mr McEwen says Mr Brewer is a “key element” in the success of Paymark. At this point, if Mr Brewer was forced back to New Zealand to serve a community-based sentence “the business is likely to fail,” Mr O’Callaghan told the court.
Mr Brewer owes Mr McEwen $135,000 and if he is forced back to New Zealand with no job and no residence, he’s unlikely to pay the debt, Mr O’Callaghan says.
Mr O’Callaghan also argues Judge O'Driscoll didn’t have to accept Mr McEwen’s offer. The judge could have ordered Mr Brewer to home detention, delaying his work overseas, and no reparations would have been paid, he says.
At sentencing, Judge O'Driscoll gave Mr Brewer "maximum credit" for his reparation payment and guilty plea. Home detention, the judge said in October, would only cause further problems stemming from the bankruptcy, such as a delay in any civil proceedings.
Originally, the Crown sought nine to 10 months’ jail. Mr Symons says he recognises discounts should be given for the guilty pleas and reparation but some form of community-based sentence should be added to fit the crime and “send a message of deterrence to others.”