R v McKelvy

[2007] NZCA 340

IN THE COURT OF APPEAL OF NEW ZEALAND

CA252/06

[2007] NZCA 340

THE QUEEN

MILES MCKELVY

Hearing:         28 June 2007

Court:            Wilson, Rodney Hansen and Ronald Young JJ
Counsel:         S L Baigent for Appellant

K Raftery for Crown

Judgment:      9 August 2007 at 10am

JUDGMENT OF THE COURT

Appeal dismissed

REASONS OF THE COURT

(Given by Wilson J)

Introduction

[1] On 2 June 2006 Mr McKelvy pleaded guilty to 27 dishonesty charges, including one representative charge, that had arisen out of a police investigation into serious and organised fraud.    On 7 July, Heath J sentenced him to eight years

R V MILES MCKELVY CA CA252/06 [9 August 2007]

imprisonment with a minimum non-parole period of five years. Mr McKelvy now appeals to this Court on the basis that his sentence is manifestly excessive.

Background

[2] The police investigation (known as "Operation Allsorts"), which began in 2002, uncovered a highly organised group of at least 30 individuals engaging in fraudulent schemes for common gain. The structure of the group was hierarchical, and the appellant was identified as the person at the pinnacle of that hierarchy. The summary of facts to which he pleaded guilty (which runs to nearly 100 pages) noted in its introduction that:

McKELVY had established himself as a self-employed mortgage broker and in that role he was able to attract and identify potential victims. McKELVY's chosen occupation was used by him to legitimise his involvement in a large number of fraudulent transactions.

McKELVY headed the operations of the group throughout the Waikato whilst [Robert William] STIRLING (who held himself out to be a financier or investor) took responsibility for the organisation of the group in the Bay of Plenty. In respect of the various transactions with which they were each involved McKELVY and STIRLING would select the target property or individual, select the strategy to be used to achieve the group's ends and then bring the required parties together to accomplish that objective.

[3] There were four principal strategies by which victims were defrauded, which were aptly characterised by Heath J as identity fraud, price hydraulic fraud, equity fraud, and equity fraud through security realisation.

[4] Identity fraud involved unauthorised impersonation of an individual (the victim) with freehold title to real property, who had been identified through the Land Information New Zealand (LINZ) Land-on-line database. A frontman (usually another co-offender, Mr Orchard) would assume the identity of the victim and enter into a financial transaction involving that person's property. Victims would be unaware that their identity had been used to obtain finance, or their property offered as security, or that a debt had been incurred in their name. When no repayments were made against the loan advance, debt recovery action would be commenced against the victim.

[5] In a price hydraulic fraud, the offenders would identify property that was either for sale or due to be sold by public mortgagee sale. The parties would obtain the property under contract, generally by way of an open market transaction. However,…