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Ronald Peter Rosenberg and Sydney Lio Hunt were convicted on fraud charges relating to $17 million when they appeared in the Wellington District Court today.
Wellington District Court Judge Bruce Davidson delivered the guilty verdicts following a four-week judge-alone trial where the pair faced 82 criminal charges of dishonestly using a document.
The Serious Fraud Office (SFO) laid the charges in July following an investigation into retail gas supplier E-Gas.
Mr Rosenberg, age 72, is the former managing director, chief executive and shareholder of E-Gas and Mr Hunt, age 46, is the former general manager.
In December 2010 the Serious Fraud Office received a complaint about inaccuracies between the amounts of gas E-Gas supplied to its customers compared to the amount of gas reported as being used to gas wholesalers.
During the investigation, SFO investigators discovered that between April 2005 and October 2008 Messrs Rosenberg and Hunt deliberately under-reported the quantity of gas supplied to its retail customers by about 950,000 gigajoules, worth about $8.74 million.
Under gas industry rules, retailers such as E-Gas are required to book in advance the amount of gas they expect to use in the coming year. Reporting is done by submitting data relating to the volume of gas retailers have charged their customers.
If actual usage exceeds booked amounts, the retailer will be subject to penalties, which were avoided to the value of about $8.67 million.
The SFO investigation showed that Messrs Rosenberg and Hunt deliberately under-reported the quantity of gas supplied by E-Gas to its retail customers and obtained an advantage as a consequence.
In this case the advantage includes gas sold but not paid for, and benefits in the form of avoided penalty payments.
“Serious financial crime places a high cost on the New Zealand economy and affects all consumers. The SFO will continue to focus resources on these high impact areas and we encourage the business community to be aware of any areas of risk in their own industries,” SFO director Julie Read says.
The charges, under 228 under the Crimes Act, of dishonestly taking or using document carry a maximum sentence of seven years’ imprisonment. Both defendants have been remanded on bail for sentencing on May 29.