12 August 2016

False Accounting: Han v. R.

The Court of Appeal upheld a conviction for false accounting against tour operator Wook Hyung Han in respect of tour billings in excess of $600,000.
After serving sentences of six months home detention and 150 hours community work for defrauding General Travel New Zealand Ltd, Han appealed his conviction.  He said it was not suppported by sufficent evidence.  In a joint venture with General Travel, Han was responsible for selling to Korean outbound tour operators package tours to New Zealand.  Known colloquially as “shopping tours”, packages are sometimes sold at a reduced margin to Korean operators with the intent a profit margin be extracted by way of commissions from New Zealand retail stores.  The agreed deal between General Travel and Han was that Korean tour operators were to be charged full price, the Court was told.  General Travel said too many companies had lost money relying on shopping commissions for their profit.  Despite this agreement, Han sold New Zealand tours to Korean operators at a discount while booking the deal to General Travel at the fully costed price.  Han intended to make up the difference and more with shopping commissions and tour fees, but over time did not recoup what General Travel was owed.
Han said he was not guilty of false accounting.  The travel invoices passed into General Travel’s accounting system correctly recorded the full price as required by their joint venture agreement.  The Court of Appeal said the travel invoices were false; they recorded a different dollar amount to that being charged Korean tour operators, obscuring the level of risk General Travel was carrying on each tour.       
Han v. R – Court of Appeal (12.08.16)

16.128