Crown gets second chance to prosecute trio in $3.6m fraud case
AUCKLAND: Prosecutors will get a second chance at a fraud case that collapsed after nine months in court and has so far cost the financial markets watchdog nearly $3.6 million.
The High Court has rejected an application to drop charges against Viaduct Capital and Mutual Finance executives Paul Bublitz, Bruce McKay and Richard Blackwood in a case brought by the Financial Markets Authority.
The trial against the group — who ran the companies, which collapsed in 2010, owing investors more than $17 million — started last year and was expected to last 12 weeks.
In May a mistrial was declared because prosecutors accidentally turned some documents over too late, breaching disclosure rules.
Figures released under the Official Information Act show the prosecution cost the FMA $3.58 million, including nearly 13,000 staff hours.
With the Crown calling for a retrial in June, the accused applied to have the case thrown out, telling the High Court earlier this month undue delay made a fair trial unfeasible.
But Justice Graham Lang this week declined to have the case stayed, while acknowledging the already significant costs for both parties would increase.
‘‘Without in any way seeking to undermine the significance of those factors . . . they are not sufficient to warrant a stay being granted.’’
He said the breach by prosecutors had been inadvertent and there was no suggestion the trial was being used for inappropriate purposes.
The trio were initially accused of a combined 49 counts of theft by a person in special relationship and dozens of charges of making false statements.
But as the trial went on, many of the charges were dropped.
The Crown now expects to bring 32 charges against the group in the retrial.
Charges against a fourth accused, Lance Morrison, were dropped in June, after the mistrial.
A fifth accused, Peter Chevin, was sentenced to nine months’ home detention after pleading guilty at the start of last year’s trial.
During that judgealone trial, prosecutors said Strategic Finance founder Bublitz and Viaduct chief executive Nick Wevers — who died in 2014 — set up Viaduct to raise cash for their various struggling property developments.
But they didn’t tell investors about the links between the companies, prosecutors said.
Bublitz’s lawyers denied this, saying there was no conspiracy and proper commercial decisions had been made in tough market conditions. — NZN