Sentencing — ponzi scheme — obtaining by deception — false accounting — forgery — reproducing a document with intent to deceive — theft by a person in a special relationship — financial services provider certification (FSP) — Companies Office — Financial Markets Authority — minimum period of imprisonment — Sentencing Act 2002, ss 9, 10 & 16 — Criminal Procedure Act 2011, s 147 — R v Varjan CA97/03, 26 June 2003 — Heta v R [2012] NZCA 267— Hessell v R [2010] NZSC 135, [2011] 1 NZLR 607 — R v Slack [2017] NZHC 2330 — R v Buckley DC Auckland CRI-2011-004-017116, 30 August 2012. Two defendants appeared for sentencing. The first defendant had pleaded guilty to three charges of obtaining by deception, two of reproducing a document with intent to deceive and one each of theft by a person in a special relationship, forgery and false accounting. The second defendant pleaded guilty to one charge of obtaining by deception. The first defendant had operated a ponzi scheme that impacted 900 victims with a shortfall of $4.4 million. He ran a sophisticated scheme which included forging documents using legal letterheads and establishing a website showing investors fake returns on the money. The second defendant had represented to the Financial Markets Authority that the first defendant was not involved in his company, allowing him to receive financial services provider certification. The second defendant was not aware that the first defendant was scamming the investors. He himself had invested and encouraged friends and family members to invest as well. For the first defendant, the lead offence was false accounting. Aggravating features of the offending were the extent of the loss and harm caused. One of the victims had to sell their family home, others encouraged friends and family to invest and made commitments in reliance on the funds. The 900 victims would get back 34 cents in the dollar return (a shortfall of $4.4 million). There was also the abuse of trust, premeditation, sophistication, the sheer number of victims and length of the offending (12 months). The starting point was nine years' imprisonment. This was uplifted by six months for his previous offending. The Court made a five per cent reduction for remorse and personal factors and15 per cent for guilty pleas, for an end sentence of seven and half years' imprisonment. The Judge also imposed a 50 per cent minimum period of imprisonment. On all other charges the first defendant was sentenced to 12 months, to be served concurrently (at the same time). As for the second defendant, a starting sentence of three years and six months' imprisonment was adopted. His offending had enabled the first defendant's offending. He fraudulently misrepresented that the first defendant was not involved in the company, obtaining FSP accreditation fraudulently. This gave the company an air of legitimacy. From this starting point there were reductions of five per cent for good character, five per cent for reparations, 10 per cent for restorative justice attendance,10 per cent for cooperation with authorities (helping to get the first defendant to plead guilty), and 15 per cent for guilty pleas. This made the second defendant eligible for a sentence of home detention as he was under the 24 months' imprisonment threshold. As he was on the cusp, the Judge had to be satisfied that a non-custodial sentence would be adequate to denounce and deter the offending, as well as to hold the defendant accountable. Based on the very positive comments in the pre-sentence report, the Judge imposed a sentence of 11 months’ home detention, as well as 350 hours of community work. A home detention sentence also meant the defendant would be able to pay reparations to the victims. He was ordered to pay reparation of $50,000 at a rate of $10,000 per year. Judgment Date: 3 July 2018.