Prison ruined him: but is he innocent?
Missing evidence, the dubious jail-cell testimony of a career criminal, and claims later proven to be false – why the fraud conviction that made a mess of John Slavich’s life should be reviewed.
John Slavich was a respectable Hamilton accountant, a partner in a major firm. Happily married, with two kids, a family home, a farm and a beach house. That was in 2002. Within four years, found guilty of six dishonesty offences, his name was mud. He lost his career, wife and the Waihı¯ Beach bach, was bankrupted, served nine months in jail, and spent more than $150,000 in legal fees and reparations.
He’s still fighting to clear his name. Since his release from Spring Hill prison, Slavich has taken more than 70 legal actions.
He’s unsuccessfully appealed his conviction to the Court of Appeal. And the Supreme Court. And sought a pardon from the Governor-General. He’s tried to sue his co-accused. And the prosecution lawyer. And the Attorney-General.
Not surprisingly, he’s been officially labelled a vexatious litigant.
It has consumed Slavich, who is an intense, somewhat saturnine, but extremely polite man in his late 60s. He’s intelligent, and knows his obsession makes him look like a ‘‘nutter’’. But what if he’s an innocent man, convicted on the word of a ‘‘professional fraudster’’?
A fresh study of his conviction – part of an elaborate multi-million dollar fraud case that saw 25 others also convicted – exposes what appears to be several major flaws. Experienced investigator Tim McKinnel has studied some of Slavich’s file and believes the integrity of his convictions must now be questioned.
‘When it came to dollars, they were just like anyone else’
The police called it Operation Allsorts, because the investigation netted people from all sorts of backgrounds. At the heart of a complex property fraud worth $6.4m were a trio of fraudsters named Miles McKelvy, Arden Fatu and Leslie Orchard.
Convicted alongside them were a car salesman, a student, lawyers, mortgage brokers and accountants – including John Slavich.
‘‘You’re talking about prim and proper people, upmarket people,’’ says Orchard now. ‘‘But when it came down to dollars, they were just like anyone else.’’
Orchard’s trio ran a series of frauds. In some, they tricked struggling homeowners into signing away the title to their homes, then drew down loans using the homes as security without any plans to repay. In others, they simply obtained the titles to freehold properties, pretended to be the owners, and got loans that way.
McKelvy, who was on parole for fraud, ran a loan shop called Fast Money with ex-boxer Fatu on the edge of a car yard in Hamilton.
When he met Orchard, the serial fraudster with multiple fake identities was calling himself Paul Adams. Slavich would also meet Orchard as Adams, but for clarity, we’ll mostly refer to him as Orchard.
The scam that ruined John Slavich’s life came about when the conspirators realised solicitors had stopped ordering the full version of property titles during conveyancing work. Instead, they would obtain a short electronic form, showing only the owner’s name and any mortgages. It meant that, with the right documents, freehold property was ripe for identity fraud.
The Crown believed McKelvy found suitable names, Orchard went to the Land Transfer Office for the title and the council for the rates notice, and together they would forge IDs, using a copy of Orchard’s genuine passport.
They tried the scam first in October 2002 but the loan was declined due to doubts over the authenticity of Orchard’s faked documents. Undeterred, they tried again, and successfully secured $22,000 from ACE Financial Services of Blenheim with the same name, ‘‘Charles Beamsley’’. Orchard told the court: ‘‘The Beamsley loan proved the system worked, so we carried on and utilised the system to obtain larger loans.’’
That’s when Slavich became part of the story.
A conspiracy cooked at Burger King
Orchard and McKelvy had an ‘‘emergency’’ meeting place at a Burger King in suburban Hamilton. ‘‘If the phone rang and it was ‘meet me at Burger King’, you would know there was something wrong. It was a place we could meet that was miles from anywhere,’’ Orchard said in evidence.
This time, Burger King was the venue for the start of some lucrative business.
John Slavich had been Miles McKelvy’s accountant, and, McKelvy says, became a good friend. After a prison term, McKelvy’s probation conditions involved regular financial reports. Slavich agreed to help if he paid promptly, never visited his office at Hamilton accountancy practice Drew Bullen, and never described Slavich as his accountant.
‘‘I didn’t know all the other things he was into,’’ Slavich says. ‘‘He is a likeable rogue, a big bulls….er, and I am sure he knew more about what was going on than he let on.’’
Around this time, Slavich was looking for short-term loans for a friend and client named Terry Smith, who ran a tuna fishing business. Slavich himself had invested, borrowing $375,000 to buy a tuna boat from Ecuador.
Smith needed $25,000 quickly to buy a boat from the Solomon Islands which was being repossessed; but his business had just $671 in the bank. While a good haul was lucrative, the tuna business was inconsistent. Smith had a record of taking short-term loans and approached ‘‘bottom of the barrel’’ lenders. In court, he was even questioned about an alleged meeting he (and possibly Slavich, although he can’t remember such an occasion) had with two senior gang members over a large debt.
With both needing cash, McKelvy put Orchard and Slavich together, organising a Sunday afternoon meeting at Burger King.
The outcome was that Slavich helped prepare a loan proposal for $75,000, secured by a four-month mortgage on a Hamilton rental owned by farmer Justin Booth. The real Booth, of course, knew nothing about it.
With a fake driver’s licence in Booth’s name, Orchard visited an Auckland lawyer, Umarji Mohammed, to do the paperwork. Then the money was distributed: $44,000 to Orchard and co, $28,376 to Terry Smith’s company, the rest in professional fees.
A week later, Orchard saw Slavich with another proposal: this time $400,000 for a wealthy farmer named Richie Hannon, who supposedly needed quick, quiet cash to resolve a legal issue involving his son.
Orchard had searched Hannon’s property titles, and found 10, with big acreage, all freehold. ‘‘It was,’’ he told the court, ‘‘Christmas time come early.’’ Again, the real Hannon (who died shortly before Slavich went on trial) was completely unaware.
Slavich drew up the deal and sent 20 pages of background to the broker Orchard had found, Carolyn Gibbs of Auckland company Legend International. Orchard again visited a lawyer to complete the formalities (here, a full historical title would have shown the land was bought by the real Hannon in 1943 – nine years before Orchard’s fake driver’s licence said he was born).
In both cases, the lawyers and brokers dealt with Slavich, but crucially, were never in the same room as both Slavich and Orchard, or on the same conference calls.
This time, Slavich’s cut was $49,000, again as a loan for Terry Smith. Orchard called it Slavich’s ‘‘payment for organising and giving credibility to the deal’’. However, it was accepted in court that Slavich never kept anything from either loan (although, legally, he could still be found guilty of deception).
Orchard intended to spread the remaining $286,000 (after fees) around: $40,000 for McKelvy and $49,000 for himself, $29,000 of that buying a BMW 750i and a Mitsubishi Pajero. Police knew the precise breakdown because when they raided Orchard’s office, they found a piece of paper entitled ‘‘When the money comes’’.
While this money never arrived – the net had closed in – the emboldened fraudsters tried unsuccessfully to raise another ‘‘Hannon’’ loan, for $800,000, through a different broker.
Instead, early on November 14, 2002, police arrested Orchard, who told his arresting officer: ‘‘I’m a bit busy right now, can we make an appointment for tomorrow?’’ He put his hand out to shake, and the handcuffs went on. ‘‘Oh, it’s that serious.’’
How it all unravelled
Slavich can’t recall who told him the police were investigating, and how he realised the deals were dodgy.
But he remembers ringing the lawyer, Umarji Mohammed, and asking him to describe Booth, and his horror at realising the fake Booth was Orchard.
About two weeks later, police raided Drew Bullen accountants. Senior partner Peter Bullen wasn’t impressed when five officers produced a warrant to search Slavich’s office. Slavich admits he should have told his partners, but he was embarrassed, and also assumed he’d be called as a Crown witness.
He gave a full, voluntary statement without a lawyer present. He thought the cops were then working out whether he was the Mr Big of the operation.
He figured when they realised he wasn’t, they lost interest; he was never reinterviewed. But a full two years later, they returned to arrest him.
Slavich was shocked to face 10 dishonesty charges, even more surprised to lose his name suppression before trial – ‘‘that basically f...ed my business’’ – but convinced he would easily clear his name.
The case against him was he had conspired, principally with Orchard, to secure the money while knowing that Hannon and Booth weren’t real and the loan applications were fake.
Who was present on that Sunday afternoon in Burger King was vital.
The police never asked Slavich how he met ‘‘Booth’’ or even to describe what he looked like – in his statement, it’s merely a single sentence. But in court, the lead investigator, Detective Sergeant Simon Eckersley, said only Slavich and Orchard were there, forging the start of their conspiracy, and police never located anyone else who attended. Orchard concurred.
But McKelvy confirms he was present, performing introductions before taking his son to eat at another table. And McKelvy, Slavich and Orchard all now agree a fourth man was also there. He was introduced, says Slavich, as Justin Booth, who needed a loan. Booth was also willing to bundle a loan for Terry Smith into the deal in exchange for the prospect of securing a job on Smith’s fishing boat (a complication which didn’t help Slavich in court).
This man was Tony Tuhoro, a friend of Orchard’s, who described him in court as ‘‘a bit of a hanger-on who wanted to make a quick buck’’.
In Orchard’s diary for that date is an entry reminding him to pay $2000 to ‘‘TT’’. Orchard had a habit of using ‘‘his boys’’ to front for him during deals when his web of identities would otherwise be difficult to maintain.
Police never interviewed nor charged Tuhoro.
But in 2009, a private investigator engaged by Slavich tracked Tuhoro down and obtained a reluctant admission he was there that day.
If John Slavich knew he was about to commit identity fraud, why did he need to have an extra actor along pretending to be Justin Booth?
Who to believe?
When it came to trial, Slavich opted for it to be heard ‘‘judge-alone’’ – that is, with no jury – and not to give evidence in his defence. He admits both decisions were mistakes.
Justice Paul Heath said his verdict would essentially hinge on whether he preferred the evidence of John Slavich or Les Orchard.
If he believed Orchard, who said Slavich was a willing conspirator, then Slavich couldn’t have been duped. The Crown had to prove Slavich knew Orchard was impersonating Booth and Hannon. As Slavich points out, frauds such as these are identical to legitimate deals.
‘‘The only point where it is different is that the person sits in the chair and signs as the owner – and that’s where the fraud happens in that moment.’’
The police tried to prove Slavich knew Orchard. They had bumped into one another briefly in a lawyer’s hallway some four years earlier. Slavich admits that. ‘‘But that’s not knowing someone.’’
A receptionist testified Orchard had fronted at Drew Bullen one day and said ‘‘Les for John’’.
But under cross-examination, it was revealed she wasn’t interviewed at the time, couldn’t recall the names of any of Slavich’s other clients, and hadn’t remembered Orchard’s name until it was mentioned to her four years later and she was shown a photo of Orchard with his name underneath.
Similarly, attempts to prove Orchard had revealed himself to Slavich in his office didn’t stand up. Orchard’s claims he’d signed a string of legal documents in Booth’s name, witnessed by Slavich, was disproved: all of them in fact bore lawyer Mohammed’s signature.
Orchard also told a story about taking a document from Slavich for Booth to sign, and returning unbelievably quickly with it, and them both laughing. That document, however, was never produced – and, says Slavich, didn’t exist.
How did Slavich not unmask Orchard? Partly because Slavich never met Hannon, and had met Booth just once, and had never found that unusual. And partly because most of the business was conducted by phone or fax, meaning Orchard’s multiple identities didn’t overlap. The deals, say Slavich, were straightforward mortgages. He smiles wryly: ‘‘I would do it again! I would do it all again.’’
Orchard wasn’t originally due to testify. Just two weeks before trial, he was added to the Crown’s witness list. It left no time to take a pre-trial deposition from Orchard.
Slavich says that was unfair because it never allowed his defence to test Orchard’s other inconsistencies: for example, if they’d known what he’d say about the Burger King meeting, they would’ve put McKelvy and Tuhoro up as witnesses.
Orchard was the first Operation Allsorts defendant to plead guilty. His 69-page statement incriminated most of his fellow defendants, and he was already serving six years in Spring Hill when he agreed to testify against Slavich after a jail-cell visit from police. Orchard says the cops persuaded him to talk by saying Slavich had bad-mouthed him. ‘‘Right, sign me up,’’ Orchard responded.
Shortly after, he wrote to his lawyer, Joe Hamblett, suggesting Slavich could pay him to keep quiet: ‘‘I have been asked to be a witness for the Prosecution of which I have no problem unless of course something in the dollar amount finds its way into my account.’’ Orchard dismissed that in court as a private joke, and doesn’t want to speak of it now.
When Orchard agreed to be interviewed by Stuff, Slavich was delighted, especially