Former South Canterbury Finance director Ed Sullivan, the only person convicted in the Crown's fraud case against the Timaru-based lender, has been sentenced to 12 months' home detention and 400 hours of community work.
Justice Paul Heath sentenced Sullivan in the High Court in Timaru today after finding lender's director and lawyer guilty of four charges of making a false statement by a promoter and one charge of obtaining by deception in a five-month trial that ended in October, the Serious Fraud Office said in a statement. Sullivan was acquitted on four other charges, including the Crown's $1.5 billion claim relating to the lender's inclusion in the government's retail deposit guarantee scheme, and his co-accused Lauchie McLeod, SCF's former chief executive, and former director Bob White, were acquitted on all charges.
"We are presently considering the sentence and have no further comment at this stage," SFO director Julie Read said.
The SFO estimated the total value of the allegedly fraudulent transactions at $1.7 billion, which included an estimated $1.58 billion from entering the guarantee scheme, of which $800 million has since been recovered.
The white-collar crime investigator came under scrutiny for the way it ran its prosecution, particularly in not calling testimony from former Treasury Secretary John Whitehead, who was in charge at the time the deposit guarantee scheme was established and when distressed finance companies were applying to be included in it.
In his October judgment, Justice Heath said while he suspected it was "very likely that a decision would have been deferred" if more information had been provided, he couldn't exclude the reasonable possibility the Secretary would have signed the guarantee deed in November 2008, irrespective of what they were told because of concern over the impact on public confidence if it failed.