UPDATE 4pm: Convicted fraudster Gavin Clifford Bennett has been sentenced to eight years in jail. Bennett, 54, was sentenced in Christchurch District Court this afternoon.
Earlier this year he pleaded guilty to defrauding South Canterbury Finance of $103 million - one of the country's largest fraud cases.
Judge Jane Farish has just delivered the sentence.
She says there needs to be an element of deterence and denunciation, which is why she increased the non-parole period from two and a half years to three and half years.
The average man in the street would think it was insufficient for Bennett to serve only two and a half years, she said.
Judge Farish repeatedly called the fraud "unprecedented" because it took place over six years and involved 894 documents.
The short of stature and bespectacled Bennett appeared in court wearing a black suit and fancy white shirt, with no tie.
Judge Farish told him to be seated until the end of the hearing and for most of the time he peered out above a glass barrier at the proceedings until he was invited to stand to for the sentencing.
Although defence lawyers asked the judge to consider a starting point of eight years before applying discounts, she accepted the Serious Fraud Office request that the starting point should be 12 years.
Judge Farish gave Bennett a 3% discount for good character and the fact he had not appeared before the court on fraud charges before, a 13% discount for cooperating and saving money on the prosecution, and a 25% discount for pleading guilty – reaching a final sentence of eight years.
Under normal circumstances, Bennett would be eligible to apply for parole after two and a half years.
But due to the scale of the fraud, the judge imposed a non-parole period of three-and-a-half-years imprisonment.
Bennett had a few family members supporting him in court for his sentencing, but the room was mostly filled with media.
This underlines the arguments that the ultimate victim in the Bennet-fraud saga is the taxpayer – who has footed the bill for the government’s bailout of South Canterbury Finance.
On March 1, Bennett pleaded guilty in the Christchurch District Court to frauds totalling $103 million.
The charges, brought by the Serious Fraud Office, concerned Bennett's use of his company DataSouth to run a Ponzi-style network of loans from South Canterbury Finance between 2005 and 2011 in order to sustain a lavish lifestyle.
Datasouth's sister company Datasouth finance (also owned and run by Bennett) borrowed millions from South Canterbury Finance to fund a series of deals to lease IT gear. Most of the leases were fraudulent.
The offending caused losses to the collapsed finance company of $23m.
Mr Bennett channelled $7.8m to personal New Zealand and Australian bank accounts or credit cards used for personal expenses during the period of offending.
These proceeds, according to the SFO, were spent in part on:
- $A900,000 in regular payments to “various female companions”.
- $A463,000 in rental payments for luxury apartments with views of the Sydney Opera House.
- $A429,000 on food and beverages, with a significant proportion at the upmarket gentleman’s club Hemmespheres.
- $A161,000 on international air travel for himself and companions to New York, Las Vegas, Paris and London.
- $A163,000 on designer clothes from Louis Vuitton, Cartier, Chanel, Georgia Armani, Gucci, Harrods in London and Bloomingdales in New York.
- $A53,000 in corporate taxi expenses, understood to include the regular hiring of limousines.
SFO chief executive Adam Feeley said: “The collapse of DataSouth was a significant event in the Christchurch business community and caused widespread losses.
"Mr Bennett’s guilty plea brings to a satisfactory end one of the SFO’s largest investigations in recent times.”
A Datasouth insider told NBR ONLINE that, in the end, Bennett wanted to get caught.
His spiraling behaviour reminded her of Stephen Versalko, the ASB investment advisor convicted of stealing $17.8m.
The men shared a taste for expensive company. Versalko spent $3.4m on prostitutes.
Bennett was no slouch, managing to burn through $A900,000 ($1.1m) on what the Serious Fraud Office euphemistically described as “various female companions.”
The company was obviously in a tight financial spot in late 2010 and early 2011, but Bennett was leading an increasingly lavish lifestyle, taking clients to strip clubs and “drinking Dom Perignon like it was Speights.”
But it was revealed Bennett’s hijinks on the other side of the Tasman left his Christchurch spending in the shade.
Travelling to Sydney, the former manager was astounded by the luxury of Bennett’s apartment, overlooking the Sydney Opera House, and big-spending habits such as hiring limousines to take him to high-priced restaurants.
“And then there were the young woman. Mr Bennett was constantly surrounded by them in Sydney."
And this when Bennett was no Richard Branson, or even Larry Ellison.
“He was balding,paunchy, and always smelling of alcohol from the night before, but he’d be surrounded by drop-dead gorgeous girls. People stop and stare as they walked down the street.”
The National Business Review first reported Mr Bennett's escalating taste in luxuries and association with lingere makers and models known by DataSouth employees as "Gav's girls" in July.
IT services company Datasouth - a Microsoft Partner Awards 2010 winner - was founded in 1993 in Christchurch (where at the time of the quake there were 50 staff), and grew to open offices in Auckland, Wellington, Melbourne and Sydney.
It was liquidated in April last year on the eve of an SFO raid.
This article is tagged with the following keywords. Find out more about MyNBR Tags
Most listened to
- Scales Corp CEO Andy Borland assesses likely immigration cuts
- Forsyth Barr’s Kevin Stirrat talks through the market reaction to the new government
- Iron Duke director Phil O'Reilly on how concerned businesses should be about the new Labour-led government
- New Sky TV NZ director Mike Darcey on the skills he brings from Sky UK, and what it's like working for Rupert Murdoch
- Nevil Gibson's back on Wall Street's darkest day and what has happened since
- NBR Radio: The best interviews, with Grant Walker — updated daily