R v Scott - [2017] NZHC 2510

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CRI-2016-004-12534 [2017] NZHC 2510

THE QUEEN

v

SHANE RICHARD SCOTT

Hearing: 13 October 2017

Appearances:

N Williams and H Walker for the Crown
A Holland and K Simonsen for the Defendant

Judgment:

13 October 2017

SENTENCING NOTES OF GORDON J

Solicitors: Crown Solicitor, Auckland
Counsel: A Holland, Auckland

R v SCOTT [2017] NZHC 2510 [13 October 2017]

Introduction

[1] Mr Scott you appear for sentence today having pleaded guilty to: (a) four charges of obtaining by deception;1
(b) 20 charges of theft by a person in a special relationship;2

(c) one charge of using a document with intent to defraud;3 and

(d) two charges of obtaining by false pretences.4

[2] The offending arose out of your operation of a Ponzi scheme between 2001 and 2014. It resulted in losses of approximately $2.1 million.

[3] I will begin by setting out those parts of the factual background which in my view are relevant to the sentence I will impose. I will then determine an appropriate starting point which reflects the culpability of your offending, before adjusting that starting point to reflect any aggravating or mitigating factors relating to you personally.

The offending

[4] Between October 2001 and 2014, you obtained money from friends and associates on the understanding that you were investing their funds in various investment schemes, namely:

(a) investment in diamonds through the Panzip Group; (b) investments run through associates in Thailand;
(c) investment in a chicken farm in New Caledonia;

1      Crimes Act 1961, s 240.
2      Crimes Act, s 220.
3      Crimes Act, s 229A (repealed as of 1 October 2003).
4      Crimes Act, s 246 (repealed as of 1 October 2003).

(d) investments in property development;

(e) investments with the Scoma Agency/exporting fertiliser; (f) exporting and importing tyres or heavy machinery;
(g)importing $2 shop products or providing finance to importers for the purpose of paying import duties and/or GST on products imported via the Ports of Auckland; and

(h) investment in an associate’s business involved in providing credit to

customers.

[5] The victims were people that you met through your local neighbourhood, your involvement in Auckland rugby clubs, and socialising in local bars. You promised them very high rates of return. In some cases you presented written agreements, proposals and other documents purporting to set out the terms of the investment. In other cases, when investors asked for further details about the investments, you simply said they did not need to concern themselves with the details, or that the details were confidential.

[6] As I have said, you were operating a Ponzi scheme. This meant you did not invest the money you obtained in any of the schemes I have mentioned. They did not exist. Rather you paid it to your personal account or used it to repay other investors.

[7] There are 13 victims of your offending. Some were repaid and suffered no loss, while others lost…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading R v Scott

Details

AGLC: R v Scott [2017] NZHC 2510
Case: [2017] NZHC 2510
Decision Date: 13 October 2017

CaseChat Overview and Summary

In the High Court of New Zealand, Auckland Registry, the case of R v Scott involved the defendant, Shane Richard Scott, who appeared for sentencing after pleading guilty to multiple charges including obtaining by deception, theft by a person in a special relationship, and using a document with intent to defraud. The offending stemmed from Scott’s operation of a Ponzi scheme between 2001 and 2014, which resulted in losses of approximately $2.1 million. The court was required to determine an appropriate starting point for the sentence, considering the culpability of the offending and the aggravating or mitigating factors relating to Scott personally.

The legal issues before the court involved assessing the nature and seriousness of the offending, the degree of Scott’s culpability, and the impact on the victims. The court considered the extent of the loss, the abuse of trust, and the length of the offending period. The Crown argued for a starting point of seven to nine years imprisonment, citing the significant harm caused and the premeditated nature of the scheme. In contrast, the defence argued for a starting point of six years, highlighting Scott's remorse and health issues. The court found that the appropriate starting point was seven years imprisonment, taking into account the prolonged abuse of trust and the considerable financial loss, albeit noting that the offending was less sophisticated than in comparable cases.

The court then applied various discounts to this starting point. It accepted a five per cent discount for Scott's genuine remorse and efforts to assist the Serious Fraud Office, and a further five per cent discount due to his poor health, which would make imprisonment disproportionately severe. Additionally, the court applied the full 25 per cent discount for Scott's early guilty pleas. After applying these discounts, the court determined the final sentence to be four years and eight months imprisonment, to be served concurrently. Scott was also discharged on three specific charges due to the Crown offering no evidence.

In conclusion, the court sentenced Scott to four years and eight months imprisonment, acknowledging the gravity of his offending while also considering the personal mitigating factors presented. The sentence aims to serve the purposes of denunciation, deterrence, and accountability, while also reflecting the unique circumstances of Scott’s case.

Orders