Jail for Waldorf Celestion Apartment developers
Friday 28 September 2018
Two businessmen are going to jail for fraudulently obtaining a $41 million bank loan to build an inner city Auckland apartment block.
By The Landlord
Property developers Leonard John Ross and Michael James Wehipeihana were found guilty on three charges of ‘obtaining by deception’ and two representative charges of ‘using forged documents’ by a jury in July, after an eight week trial.
Their sentences were handed down at the Auckland High Court today with Ross receiving four years and four months’ imprisonment and Wehipeihana four years and three months’ imprisonment.
The pair deceived ANZ to get a $41-million development loan for their company, Emily Projects Limited, which was used to construct the Waldorf Celestion Apartment Hotel.
They lied to the bank about the number of genuine presales they had made.
They also used forged documents, including sale and purchase agreements, to support the loan application.
Later, they used additional forged documents when the apartments were on-sold to genuine purchasers.
Ross incorporated Emily Projects in July 2008 to develop and sell the apartments at the Waldorf Celestion.
He was the company director of Emily Projects and held a 55% majority stake in the company, while property developer Wehipeihana held 35% of the shares.
The offending took place between 2008 and 2010.
However, Emily Projects went into liquidation in 2012 and creditors’ allegations about Ross prompted the SFO to begin an investigation, which it confirmed in March 2016.
SFO director Julie Read says the sentences imposed today reflect the seriousness of the offending.
“Mr Ross and Mr Wehipeihana misled the bank to ensure that Emily Projects Limited obtained the loan facility.
“The SFO is committed to investigating and prosecuting this kind of offending to maintain the integrity of the mortgage market for the benefit of honest borrowers.”
There were two other men involved in the fraudulent scheme but they have already been sentenced to 10-months’ home detention respectively.
One of them was self-employed consultant Vaughn Stephen Foster who pleaded guilty to one representative charge of ‘obtaining by deception’ before the trial started and who was sentenced in June.
The other was lawyer Timothy Upton Slack who pleaded guilty to one representative charge of ‘obtaining by deception’ on 1 September last year and who was sentenced later that month.
Slack was struck off the roll of barristers and solicitors in March.
Comments from our readers
No comments yet
Sign In / Register to add your comment
National property values continue to fall with the rate of annual growth dropping from 3.8% in June 2018 to 1.7% in June 2019, the latest REINZ House Price Index reveals.
Flexible working spaces are more than just a fleeting trend and the launch of a new co-working serviced office franchise programme will open up the market to investors.
LVR restrictions on mortgage lending could be a "permanent setting", according to Reserve Bank deputy governor Geoff Bascand.