Ticket Scalping: Asgedom & Demissie v. R

Home detention and community work for two Ethiopian brothers convicted of conspiracy to scalp Rugby 2011 World Cup tickets were confirmed on appeal.

Nebiyou Tefera Demissie and Demissie Tefera Asgedom were convicted of dishonesty as the New Zealand front for a credit card fraud run out of South Africa getting high value Rugby World Cup tickets intended to be onsold during the 2011 tournament.  Relying on information provided by Ticketek together with Immigration and Customs, police swooped on the brothers’ homes as the World Cup got underway finding 931 tickets with a face value of over $500,000 under Mr Demissie’s house.  A further 114 tickets with a face value of over $50,000 were intercepted by Customs prior to delivery to Mr Asgedom’s home.  Nine tickets were found at his address. 

Credit card companies fraud detection systems identified some 1700 World Cup tickets worth more than $900,000 had been purchased prior to the tournament through use of up to one hundred compromised credit cards.  Where identified, tickets were cancelled.

There was evidence of Demissie and Asgedom buying multiple tickets under several aliases each using over seven compromised credit card numbers.  Other tickets linked to Demissie and Asgedom were purchased using a variety of compromised credit cards traced to a common address in Johannesburg.  Many were in the name of Demissie and Asgedom themselves.  Others were in the names of members of their ethnic Ethiopian football team; other names being used to allay suspicion attached to bulk buying of tickets.   

At trial, the brothers said they were innocent victims of a fraud, merely holding tickets for rugby supporters coming in from overseas.  Their phone records identified contacts in South Africa.  Acting on this information, Immigration denied entry to a Mr Boku and a Mr Seed arriving from South Africa prior to the tournament.

Dishonesty charges were laid against the brothers in September 2011.  The trial took place in 2015.  The Court of Appeal said the brothers were not prejudiced by the delay.  Much of this delay was caused by a series of pre-trial applications seeking to have charges dismissed.  The brothers also challenged evidence regarding fraudulent use of credit cards saying each individual card holder should have been called to give evidence about their card.  The Court of Appeal said the Evidence Act allows use of business records as fact of what the business document states.  In this case, police used a spreadsheet combining data from multiple credit card companies and from Ticketek to illustrate and prove the links between tickets in the possession of the two brothers and fraudulent purchases both by themselves and by others out of South Africa.  The Court of Appeal ruled the spreadsheet was acceptable evidence: it combined data produced automatically within corporate computer systems and there was nothing to suggest the information was unreliable.

The Court of Appeal ordered the brothers finish their sentences of twelve months home detention and 200 hours community work.  Mr Demissie has also lost his taxi licence on conviction for dishonesty. 

Asgedom & Demissie v. R – Court of Appeal (18.07.16)

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Trust: Davis v. White

Claims by two Freemasons that a deceased friend’s family trust was held for the benefit of Freemasons New Zealand were dismissed in the High Court.  They could not point to any concrete evidence of the Masonic Society being a beneficiary and were ordered to hand over trust funds in excess of $200,000 to the widow of their friend Rex White. 

Bruce Cyril McNiece and Alexander James Davis asked the High Court to confirm their claimed right to hold family trust assets of the late Rex White on behalf of the Freemasons.  Justice Davison ruled no such trust existed, Mr McNiece and Mr Davis had no right to retain control of the assets and the two had to pay out of their own pocket both their own legal costs and a contribution towards legal costs of Rex White’s widow.      

The court was told Rex White died in 2001.  The Whites were then living in Australia and his widow, now aged 88, continues to live there.  At the time of his death, Rex White’s estate was valued at $71,000 but there were assets then valued at $206,000 held by the Rex White Family Trust.  Mr McNiece and Mr Davis were trustees.  The trust had been set up in 1992 to hold Mr White’s bequest from his mother’s estate.  Mrs White knew nothing of this Trust until told of existence by Mr McNiece after her husband’s death.  Complicating matters was the fact the original trust deed had been lost.  A copy had been filed with Inland Revenue for tax purposes, but this too was lost.  Initially, the two trustees took the view that Mrs White was the sole Trust beneficiary.  They paid annual Trust income to her and made a $34,000 contribution towards the cost of a hip replacement.  Precise details of the Trust became an issue in 2014 when Mrs White consulted lawyers in New South Wales about her estate planning.  Learning of the Trust’s existence, they wrote to Mr McNiece to get details.  Mr McNiece admitted the Trust deed had been lost and prevaricated, replying that Mrs White was entitled to income only during her life and that the final beneficiaries were “various charities”.  Pressed on this, Mr McNiece claimed it was Rex White’s instructions that the Freemasons were to be the final beneficiary.

When an original trust deed is lost, the courts can determine its terms from ancillary correspondence and drafts of the trust deed.  Justice Davison said drafts of the Rex White trust deed were unhelpful in this case.  The sole draft available was riddled with errors, the result of a hasty “cut and paste” by Mr McNiece’s law firm.  There was no other documentation evidencing terms of a trust.  While a family trust was established by Rex White in 1992, it has now failed by reason of uncertainty as to its terms, Justice Davison said.  He ruled the disputed assets be handed over to Mrs White as the sole beneficiary of her late husband’s estate.

Justice Davison was critical of Mr McNiece’s attempts to disguise his connection with Freemasons.  When giving evidence he denied being a member of the Freemasons, omitting the fact (later disclosed) that he had previously been a member between 1988 to 1995.            

Davis v. White – High Court (18.07.16)

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Maori: National Urban Maori v. Te Ohu Kai Moana

Urban Maori interests spearheaded by west Auckland Waipareira Trust successfully challenged attempts by traditional iwi to dismember Te Putea Trust set up as part of the Waitangi Fisheries Settlement and allocated twenty million dollars to assist Maori who do not or do not want to identify with traditional iwi.

Te Ohu Kai Moana Trustee Ltd holds fishing quota allocated to Maori.  It is controlled by traditional iwi.  The Maori Fisheries Act required Kai Moana to set aside twenty million dollars for the benefit of urban Maori not affiliated with their traditonal iwi.  So began a drawn out tussle over control of this trust fund held through Te Putea Whakatupu Trust.  Urban Maori complain they are being shut out.  In the High Court, Trust management was described as dysfunctional.

The National Urban Maori Authority and Waipareira Trust sued Kai Moana challenging who it appointed to the Trust board.  Te Putea directors are required “to have a knowledge of, and are able to represent, the interests of Maori who reside in urban areas of New Zealand.”  Kai Moana said the Trust board as a whole must have this expertise.  It is not necessary that each director individually satisfy the requirement.  Justice Simon France disagreed.  Each individual director must satisfy the statutory requirement of representing urban Maori.  This ruling gives urban Maori a better chance of gaining control of the Trust fund.

As part of a ten year review of its operations required by the Maori Fisheries Act, Kai Moana proposed changing Te Putea’s board structure potentially weakening further control by urban Maori.  Te Putea did not respond to these proposals, due in part to the ongoing dysfunctional relationship between board members.  Justice Simon France was critical of Kai Moana and its consultative working group.  It did not give proper regard to the purposes of Te Putea and there was no proper specific consultation with urban Maori.  

National Urban Maori Authority v. Te Ohu Kai Moana – High Court (15.07.16)

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Fraud: Kiro v. R.

Four and a half years jail and a $75,000 reparations order imposed on former Financial Markets Authority analyst Benjamin Kiro for fraud were upheld on appeal to the High Court.

Returning from Australia with New South Wales police about to file nineteen fraud charges against him, Kiro then proceeded to deceive the FMA with a false CV, rip off victims by falsely representing he was working for a major financial instution and steal money from women met though on-line dating sites.  The High Court was told victims lost a total of $187,765.  Kiro used fake documents offering investment opportunities in initial public offerings.  The bait was a chance to get in at the ground floor with indications of juicy returns; up to $29,800 for every $10,000 invested.  Fictitous investment schedules were handed over, printed on the forged letterheads of reputable institutions, creating an illusion funds had been safely invested.  Kiro spent the money.  Investors wanting their money back were told there were delays while money-laundering protocols were dealt with.  He failed to attend promised meetings when victims were trying to get hold of him. 

Justice Wylie said the sentence was not manifestly excessive given the offending was cynical and calculated involving a large number of vulnerable victims.     

Kiro v. R. – High Court (11.07.16)

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Contempt: Grant v. Grewal

Two directors of the Masala restaurant chain have been fined for contempt of court after failing to promptly deliver up company documents to Masala’s liquidators.

Masala restaurants in Auckland gained notoriety after prosecutions for underpaying immigrant staff.  The Masala group had been under investigation by Inland Revenue and the Ministry of Business since 2013.  In December 2014, four Masala companies were put into liquidation with Waterstone Insolvency appointed liquidators.  Having trouble getting hold of company documents, Waterstone got High Court orders against the companies’ directors in July 2015 to force compliance. 

The High Court was told Rajwinder Singh Grewal took six months to tell liquidators there were 97 boxes to be picked up from his Royal Oak home.  He said that was all he had.  After being called by the liquidators for a formal Companies Act examination, Mr Grewal handed over another 50 boxes.  Only after further questioning in two formal examinations did Mr Grewal disclose the password necessary to access his email account.  Justice Heath ruled Mr Grewal was in contempt of court in his belated compliance with orders to deliver up company documents.  Mr Grewal was fined $10,000; half to go to the liquidators, the balance to the Crown.  Joti Jain was fined $5000 for contempt, again split between the liquidators and the Crown.  Justice Heath said she failed to properly disclose email accounts holding company information.  The two directors were jointly ordered to pay liquidators costs of $20,000 incurred in bringing contempt of court applications.     

Grant v. Grewal – High Court (11.07.16)

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