Belgrave’s Stephen Smith jailed four years over $18m fraud

Former director had earlier pleaded guilty to 25 charges relating to the collapse of the lender in 2008.

Former Belgrave Finance director Stephen Smith has been sentenced to four years in jail after pleading guilty to 25 charges for his role in an $18 million fraud relating to the collapse of the lender in 2008.

Smith was sentenced at the High Court in Auckland for his role in a number of transactions between June 2005 and March 2008 for the benefit of related entities of Belgrave, the Serious Fraud Office and Financial Markets Authority say in a joint statement.

He pleaded guilty in April to 19 charges under the Crimes Act of theft by a person in a special relationship, four charges of false statement by promoter, one Securities Act charge of making an untrue statement and one Companies Act charge of making a false statement to a trustee.

"This sentence brings us another step closer to bringing the criminal prosecution of the finance company collapses to a close," SFO acting chief executive Simon McArley says. "This will increasingly allow resources to be refocused toward proactive intervention in emerging areas of financial crime."

The charges were brought in a joint prosecution by the FMA and the SFO.

Belgrave, which provided finance for property developments from funds raised via debentures and capital notes, was put in receivership in May 2008 owing $22 million to about 1000 investors. It was placed in liquidation in April 2010.

The conviction means Smith is automatically banned from managing companies for five years.

Charges have also been laid against former director Shane Buckley, alleged controller of the company Raymond Schofield and legal adviser Hugh Hamilton.

Buckley was sentenced to three years' jail after pleading guilty last August. Schofield was granted a stay of prosecution on the grounds of terminal illness and Hamilton has been committed for trial in February next year, the SFO says.

(BusinessDesk)