The High Court upheld three years jail for a ‘teeming and lading’ fraud after Taranaki travel agent Nadene Cheree Chapman missappropriated $707,700 of client money.
Ninety one customers of Waitara Travel Ltd had travel plans affected after Chapman juggled client money while she struggled to meet business debts. The court was told Chapman used travel deposits paid by customers as a free float: she delayed crediting customers’ payments to their individual accounts while using their funds to pay for earlier customer bookings and her own business debts; a bookkeeping fraud known as ‘teeming and lading’. While this failure to account involved payments totalling $707,000, Chapman said the final shortfall to customers was only $34,666. Some customers received refunds; compensated by insurance claims or credit card chargebacks. House of Travel was affected the most; to the tune of some $623,000.
At trial, Chapman offered to repay customers at $300 per week, provided she received home detention and was not sent to jail. The trial judge said sentences cannot be tailored to suit accused. He sentenced her to three years’ imprisonment and reparations of $10,000. This sentence was confirmed on appeal. Justice Cull said a substantial sum of money was involved at around $700,000. She abused a position of trust by misusing client money. The fraud ran for a period of twenty months affecting a substantial number of customers.
The court was told Chapman gained no great personal benefit from the fraud, other than having her business continue in operation for longer than it should. She did not live an extravagant lifestyle. She was described as a naïve businesswoman, out of her depth. While running her travel business she took over another unprofitable travel business and struggled to meet all her business debts. She sold her home, trying to keep her business afloat. Chapman was bankrupted in 2017.
Chapman v. R – High Court (18.06.18)
18.124