Sentencing
former NZ Wine Company chief executive Peter Scutts to home detention for
taking $64,000 in secret commissions on Australian wine sales, Justice Peters
said the seniority of an employee is one of the criteria to be taken into
account when determining the penalty.
Peter John Scutts was convicted on one charge
of breaching the Secret Commissions Act and sixteen Crimes Act fraud charges
following backhanders received on sales by Liquor Marketing Group Australia of
NZ Wine product. Over a 19 month period
he was paid $64,000 on sales by Liquor Marketing: roughly one dollar on each
case of NZ Wine sold. Liquor Marketing
is a co-op supplying hotels, bars and liquor stores in Australia.
The High Court was told Scutts made a
declaration of interest to the NZ Wine board about his family’s supposed
involvement in the Liquor Marketing contract.
He stated a company called Rochfort Rees Wine Company Ltd, owned by his
wife and son, had been asked to provide consulting services to Liquor Marketing
in respect of the NZ Wine product and that his son would be the
consultant. This was misleading. Scutts and his son jointly held 98 per cent
of the company’s shares. His son never
did provide any consulting services. The
backhanders to Scutts were invoiced on Rochfort Rees letterhead and paid into
an Australian bank account in Scutts’ name.
Evidence was given that NZ Wine became aware of
the backhanders after the company merged with Foley Family Wines in August
2012. The payments had not been recorded
in Rochfort Rees’ financial records or its tax returns.
Justice Peters sentenced Scutts to eight
month’s home detention. NZ Wine
recruited you and paid you well because of your expertise and abilities, she
said. NZ Wine was entitled to your
undivided loyalty.
R. v.
Scutts – High Court (21.05.15 & 10.07.15)
15.080