Convicted
for his part in a $19.7 million commercial fraud, Capital + Merchant director
Neal Medhurst Nicholls has agreed to hand over $1.8 million as the proceeds of
crime.
When convicted in 2012 and sentenced to seven
and a half years jail, Nicholls told the High Court he was unable to pay
reparations. His family home was owned
by a family trust established by his father-in-law. He was part-owner of an investment property,
but there was no equity in the property as it was heavily mortgaged. Investigations by the Police Asset Recovery Unit identified
Nicholls had a contingent interest in a number of properties. Discretionary beneficiaries in a trust have a
contingent interest in trust assets; they have no absolute right to a benefit,
any benefit is contingent on trustees making a decision in their favour.
Convicted criminals can negotiate with the
Asset Recovery Unit, but the Criminal Proceeds (Recovery) Act requires High
Court approval to any agreed settlement.
Nicholls offered to pay $1.8 million.
This is to be funded by the sale of Auckland property which Nicholls does
not own but in which he has a contingent interest.
The Asset Recovery Unit told the High Court it
had a strong case to pursue Nicholls’ entitlement to trust assets. But this would take considerable time and
money. There was some risk to a
successful outcome given Nicholls is bankrupt and there are other beneficiaries
entitled to the same assets. Justice
Whata approved the $1.8 million settlement, saying it was a common sense
compromise that serves the purposes of the Criminal Proceeds (Recovery) Act and
the overall interests of justice.
Commissioner
of Police v. Nicholls – High Court (9.06.15)
15.063