Former National Finance 2000 director Trevor Allan Ludlow has been sentenced to six years in jail, which is the longest jail sentence a convicted finance company director has received so far. Ludlow's sentencing follows his conviction for theft and false accounting.
National Finance 2000 was the first of 65 finance companies, mortgage trusts and investment funds to be frozen or collapse between May 2006 and this year, interest.co.nz's Deep Freeze list shows. Used car lender National Finance 2000 owed NZ$25.5 million to 2,026 investors when it was put into receivership in May 2006. About 48% of the money was recovered and repaid.
Ludlow was convicted in the Auckland District Court in July of seven Crimes Act charges relating to theft by a person in a special relationship and false accounting, following a Serious Fraud Office investigation. He was sentenced in the Auckland District Court today.
Ludlow, who represented himself in his trial, was found to have breached the terms of National Finance 2000's Trust Deed, defrauding investors of an estimated NZ$3.5 million. The SFO says this included about NZ$2.7 million of unauthorised or unsecured advances made to his Payless Car group of companies, plus undisclosed related party transactions totalling more than NZ$800,000 to an audio company, a property in Fiji; and land purchased for another company he owned.
It's the second jail sentence handed down stemming from National Finance 2000's collapse. Last November the firm's accountant John Gray was sentenced to 18 months jail after pleading guilty to theft and false accounting, although this was later reduced after an appeal to nine months home detention.
“Concluding the investigations and prosecutions of failed finance companies has been our number one priority over the past 18 months, and this sentence reflects both the seriousness and importance of this work,” SFO chief executive Adam Feeley said.
Feeley said one of the SFO’s key objectives was to focus on cases that would make a difference to restoring investor confidence.
“Kiwi investors understand that criminal proceedings cannot restore the losses they have suffered, but equally we believe that they will take some confidence in knowing that those who have so fundamentally breached investor trust can and will be held to account," Feeley added.