‘Unusual transactions reveal brothers’ thefts
Two brothers who stole almost $150,000 from their employers to fund their stockcar racing believed they were “still promoting” the company – as its name was emblazoned on their stockcars.
That claim was rejected by sentencing Judge Edwin Paul, however, as a move to “pacify your own conscience”.
Mark and Steven Flower were both sentenced at Taupō District Court after pleading guilty to one charge each of theft by a person in a special relationship.
The charge comes with a maximum penalty of seven years’ imprisonment.
Mark Flower stole $100,000 from HJ Asmuss & Co Taupō, and was sentenced to nine months’ home detention. His brother Steven Flower stole $48,000 and was sentenced to six months’ community detention with a 7am-7pm curfew and 150 hours of community work. Respective reparation payments of $100,000 and $48,000 were also made.
Steven Flowers’ lawyer, Philip Morgan, KC, told the court the stolen money “funded this passion for super sport car racing”.
“My client’s self-justification, not a legal justification, is ‘I’m still promoting the Asmuss name’. The essential issue here is the case of an employee, a long-standing employee, who knew the business ... started using the computer system in a way which essentially funded his hobby, the super sport car racing.”
Another justification his client had was that he “always believed he was ultimately going to be an owner of this business”.
Morgan also said his client “utterly refuted” claims the thefts stretched back to 2013, and allegations some of the stolen cash was used to set up a business that rivalled Asmuss, though he did concede “his new business does compete, but in a very small section of its core business”.
His client had suffered a significant fall from grace as he was formerly “highly regarded in the community”, and that a prison sentence would be “devastating for this man and his business”.
Judge Paul said the theft was discovered in 2021 in the wake of “unusual transactions [being] identified”. “The reality is you obtained these goods so you could continue to enjoy your stockcar recreation at no cost to you, therein lies the dishonesty. You were simply out for yourself.”
He said the offending spanned 18 months, but found some silver lining.
“Often significant sums of money are stolen ... and the victim is never recompensed. In your case, the victim here has at least been recompensed.”
Mark Flowers’ lawyer, Mark Jepson, told the court when it came to his client, “the only real difference is the quantum”.
Judge Paul said the offending was “very similar” in both its method, and the mistaken belief held by Mark Flower that he too would become a shareholder in the company. “You stole $100,000 worth of property you were not entitled to ... by anyone’s assessment that’s a significant theft.”
The police summary of facts revealed Asmuss Group was founded in 1920 and acts as a principal supplier for many of the country’s large-scale industrial and construction projects.
In 2021, the company brought in an independent contractor to review its product codes and work orders, identifying “a series of unusual transactions”. This prompted the chief financial officer to question Steven, who “confirmed he was not processing work orders in the correct way”.
A forensic accountant was then employed to comb through purchasing, receipting and management of all work orders from May 1, 2019 to December 31, 2021, discovering “total financial variance of $152,000 across all work orders”.
Numerous transactions were uncovered related to “non-core suppliers”, including companies involved in racecar engine manufacturing.
“Both the defendant and his brother were heavily involved in stockcar racing, and automotive items have been purchased via HJ Asmuss & Co work orders for use on their stockcars and personal items for their own use,” the summary said.
Other items acquired included a $929 watch and a $2612 GPS camera, listed as ‘gaskets’ and Contact Energy work order ‘parts’ respectively.
In the wake of the sentencing, Asmuss chief executive Dean Brown said he found the whole experience “extremely disappointing”. “These guys were held in high regard by the board and shareholders.”
The family-owned business operated with a high degree of trust in its staff.
He also hit back at the Flowers’ claim they believed they would become shareholders, saying they were told in 2010 this would not happen.