Gavin Bennett charged with defrauding South Cant of $103 million
DataSouth director and champagne-lover faces eight SFO charges relating to 900 allegedly fraudulent loans from failed finance company.
Gavin Bennett, the director of Christchurch IT company DataSouth, was charged in the Christchurch District court this afternoon with defrauding South Canterbury Finance of $103 million.
The charges, brought by the Serious Fraud Office, included six representative charges under the Crimes Act relating to 900 instances of misuse of a document, and two further charges of false accounting.
Mr Bennett only recently returned to New Zealand from Sydney and is yet to plead in the case.
The National Business Review broke the news of Mr Bennett’s business activities in Sydney, including living in a multi-million dollar apartment in The Rocks and associations with make-up artists, models and lingerie designers.
One long-term colleague of Mr Bennett’s said the DataSouth director’s tastes in alcohol evolved from beer to Cristal champagne as South Canterbury’s loan exposure grew.
Nick Paterson, the general manager for fraud and corruption at the SFO, said Mr Bennett had returned to the country voluntarily and had cooperated with their enquiries.
Mr Paterson said the alleged offending took place between 2005 and 2011 and involved an escalating number of loans secured by non-existent leases.
"We have looked at where the money went and where it was issue. It has all the hallmarks of a Ponzi scheme - it wasn't drawing investors in - but having taken out one loan some time ago he couldn't repay it, so he took out two more loans to repay the first," he said.
Mr Paterson said the majority of the $68 million borrowed from South Canterbury went into loan repayments, a smaller proportion went into the business expenses of DataSouth, but some was used for Mr Bennett's benefit.
"We are alleging a third portion was used for expenses of a personal nature - we are saying this was not large in comparison to the total amount, but it was a very significant amount," Mr Paterson said.
A further $35 million of fraud relates to falsified accounts for Mr Bennett's DataSouth Finance.
The SFO said the DataSouth fraud was expected to cost South Canterbury, covered by the government guarantee and facing a $1 billion hole, around $26 million.
The charges Mr Bennett faces carry a maximum penalty of ten years in prison and he next appears in court on December 8.
Matt Nippert
Thu, 10 Nov 2011
Thu, 10 Nov 2011
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Gavin Bennett charged with defrauding South Cant of $103 million
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