Court hears of gang extortion racket

An unnamed gang has moved into the field of commercial extortion, a court has heard.

The name of the gang was not referred to at Christchurch District Court hearing and does not appear in the court documents. No gang members have been charged because of problems proving individual identities.

Russell Colin Arthur, a 58-year-old Christchurch businessman, said he was pressured into making blackmail threats on behalf of the gang because of a debt he owed.

He admitted the blackmail charge in September and Judge Brian Callaghan jailed him for 21 months yesterday.

‘‘Blackmail is one of the most insidious offences on the statute books,’’ Judge Callaghan said. ‘‘The only appropriate sentence is one of full-time imprisonment.’’

Arthur admitted contacting a businessman and threatening to destroy him and his business unless he dropped a civil claim against someone else. Patched gang members were hanging about in the background as he made the threats at a public event.

He also made a phone call to the same victim, and later contacted one of his company managers to try get him involved in a civil prosecution against

"Blackmail is one of the most insidious offences on the statute books."

Judge Callaghan

the business owner. The court was told Arthur had neither followed the blackmail victim nor put his family under surveillance – that was apparently the gang.

Judge Callaghan noted the blackmail campaign had an ‘‘immense’’ effect on the victim. He and his family had to leave New Zealand for a time and had to change their vehicles.

As with all blackmail cases, the name of the victim and his business are suppressed.

Crown prosecutor Chris White said the case involved a threat by Arthur to destroy the victim’s business and his livelihood and an attempt to interfere in the judicial process, although in the civil jurisdiction rather than criminal.

Defence counsel Andrew McCormick said everything Arthur did had been ‘‘at the instigation of others’’. His threats of causing harm were ‘‘exclusively in a financial context’’.

Judge Callaghan said Arthur threatened to disclose untrue business information about the victim, claiming he had committed fraud, unless he dropped the civil claim against another person.

He approached the victim at a public event early this year and said he would release confidential documents to politicians, the government and media, misrepresenting the man’s products as capable of putting the public at risk.

‘‘We will destroy you and your company completely,’’ Arthur told the victim.

Judge Callaghan said: ‘‘You were shadowed by gang members in the vicinity, no doubt to make it more sinister and threatening for the victim, which clearly it was.’’

He phoned the victim again the next day to tell him what he wanted him to do, and later phoned one of his managers to ask him to ‘‘come on board’’ with civil action alleging that the blackmail victim’s companies were producing substandard products.

The judge said: ‘‘I am told that you acted under a form of duress, and did what you did because of indebtedness to the gang.’’ The nature and amount of the debt were not disclosed.

Judge Callaghan quoted from an earlier court decision that ‘‘blackmail has always been regarded by the public with loathing and contempt’’.

The judge ruled out home detention, saying Arthur had been ‘‘a significant cog in the blackmail strategy’’ and had clearly known what was going on.