Lawyer denies coaching witness in fraud trial

As the trial of two Wellington accountants continues in the High Court, their lawyer, Mike Lennard, denied coaching a witness.

“The evidence given was that I had personally coached him as to what to say," Mr Lennard told the court yesterday at the fraud trial of accountants David Ingram Rowley and Barrie James Skinner. 

"If there is any suggestion from the Crown that I have been party to anything to get the witness to produce false evidence to the IRD or to the court, then obviously my position here is impossible.” 

Justice Stephen Kos responded that the witness, Gary Martin, had obviously had a “change of heart” in terms of his options.

The Crown did not believe Mr Lennard, a former senior IRD lawyer, had “coached” the witness, Justice Kos said.

“Clearly, Mr Martin has gone down the road to Damascus. His evidence was different to his brief,” Mr Lennard told the court.

Mr Martin’s evidence relates to a complicated scheme which saw transactions processed to create tax deductions and credits for 27 clients, including lawyers and company directors.

Messrs Rowley and Skinner face more than 100 charges of fraudulently using a document to obtain a pecuniary advantage, attempting to pervert the course of justice and tax evasion.

The scheme was presented to their Tax Planning Services clients as a legitimate way to reduce tax liability, and even if they were aware of the alleged scam - which would see them benefitting from tax advantages - it would be difficult to prove criminal intent.

Mr Martin, however, could not remember specific dates, times or any details on the transactions, which happened through his account.

“I thought it had something to do with tax,” he told the court. He denied lying to the IRD when Rowley and Skinner came clean about the sham transactions.

“If they had explained the true situation, that it was against the law, I would not have proceeded,” Mr Martin says.

The Crown accuses Messrs Rowley and Skinner of instructing clients what to tell an IRD investigation about the transactions later, and many only learned then that the transactions involved property deals.

The pair are also accused of invoicing clients, usually for consultancy or subcontracting work, which never existed.

Aasish Patel told the court he thought he was legitimately buying losses in different companies, on the advice of his then “good friend” and tax consultant, Mr Skinner.

He told the court he had never received invoices from Tax Planning Services and was told they were held at their Wellington offices.

However, when the Auckland-based finance company manager was contacted by the IRD, who requested information under a Section 19 clause, Mr Patel told the court he “could not lie” about the transactions.

He said the explanations offered by Mr Skinner about why the IRD had queried Mr Patel’s tax affairs and gave him a copy of a “voluntary disclosure”, already prepared to sign, Mr Patel did not feel comfortable with the explanations he had been given.

“It was a pretty tense situation. I didn’t understand it [the transactions].

"I was pretty upset when I called Barrie about the notice from the IRD. He provided me with some answers, but I did not recognise any substance in them,” he told Crown lawyer Dale La Hood.

Convicted fraudster Shaan Stevens, who was convicted of more than 20 fraud charges last year, is expected to testify against Messrs Rowley and Skinner this week.

It is alleged he referred clients to their company, allegedly knowing they would take part in the fraud.

The trial continues.