SFO concludes Bridgecorp investigation with fresh charges against Petricevic, Roest (Update 1)

The Serious Fraud Office (SFO) has laid seven new - final - charges against both the managing director, Rod Petricevic, and finance director, Robert Roest, of collapsed finance company Bridgecorp. The new charges total NZ$5,244,172.21 and carry potential maximum penalties of seven years in jail. (Update adds background, detail on the new and previously existing charges). The charges relate to the alleged fraudulent acquisition of a luxury boat named Medici that was bought with NZ$1.8 million of Bridgecorp's money. Meanwhile, separate charges relate to the allegedly dishonest payment of NZ$1.2 million of Bridgecorp money, authorised by Petricevic, to a business named ABb. Bridgecorp collapsed into receivership on July 2, 2007 owing 14, 367 investors NZ$459 million. Receivers Colin McCloy and Maurice Noone of PricewaterhouseCoopers estimate Bridgecorp’s beleaguered investors’ are likely to get back less than 10 cents in the dollar. Petricevic and Roest, along with Bridgecorp chairman Bruce Davidson and directors Gary Urwin and Peter Steigrad, are already facing serious charges. The five were earlier this month committed to the High Court for a trial after each pleaded not guilty to 10 criminal charges relating to a prospectus Bridgecorp issued  in December 2006. Under Securities Act charges brought by the Securities Commission and Registrar of Companies, the five face potential maximum penalties of five years’ jail or a fine of NZ$300,000 if found guilty. The commission alleges the five lied to investors and misled them in the prospectus and other offer documents. Read the SFO's statement below:

The Serious Fraud Office (SFO) today announced additional charges were being brought against Bridgecorp Managing Director, Rodney Petricevic, and Finance Director, Robert Roest.  SFO Director, Adam Feeley said the charges related to two set of circumstances. “The first set relates to an allegedly fraudulent acquisition of a luxury boat, the “Medici,” purchased using Bridgecorp funds totalling $1.8M. The second concerns allegedly dishonest payments totalling $1.2M of Bridgecorp funds authorised by Mr Petricevic to a business entity called ABb”. “There have been extensive and exhaustive investigations into the failure of Bridgecorp, and these final charges effectively bring all those inquiries to a conclusion”, Mr Feeley said.  The SFO had also investigated a number of large commercial transactions involving Bridgecorp and other companies where there were common shareholders or other related interests.  “We have concluded that, to the extent that we believe any frauds may have been committed, criminal charges in respect of these transactions can be addressed by action already commenced by other agencies, and the Crown may considering revising  the charges which have already been laid in respect of those matters.” Mr Feeley said that concluding the Bridgecorp investigation was critical to both the wider investigations into failed finance companies, and the SFO’s longer term strategy for fighting corporate fraud.  “There has been a public perception that all of the finance company failures have involved fraud, and this is simply not correct,” Mr Feeley said.  “However, in order for the public to have confidence in our financial markets, it is important that we act where there is evidence of criminal offending, and that we close cases where no evidence, or insufficient evidence, exists.” Mr Feeley said the recent organisational changes at the SFO were designed to ensure that it was better structured to respond more quickly to allegations of major fraud.  “The SFO was established to deal with major cases of serious and complex fraud. Our operational set-up means we will now deal with fewer but more significant cases in a shorter timeframe”, he said. Fact Sheet Purchase of “Medici” The Medici was a luxury launch acquired using Bridgecorp funds totalling $1.8M.  The SFO alleges that Mr Rodney Petricevic and Finance Director Mr, Robert Roest together ensured that Bridgecorp paid for the acquisition and operating costs of the Medici along with providing security for a loan to Poseidon Limited. Ownership of Medici vested in Poseidon Limited, a company wholly owned and directed by Mr Petricevic. ABb Group ABb, was a trading name for a business operated by Janita Wright, a personal acquaintance of Mr. Petricevic. ABb invoiced Bridgecorp for work relating to marketing consultancy, database management, operation of an after hours call centre and other business expenses. It is alleged that this work was either not done, and/or that the sums invoiced were out of all proportion to the quality and quantity of the work undertaken, and the qualifications, skills and experience of Ms Wright. It is alleged that the business was, in essence, a sham to enable Mr Petricevic to make fraudulent payments from Bridgecorp to Ms Wright. The charges laid: Seven charges have been laid by the Serious Fraud Office totalling $5,244,172.21 ABb A. $66, 650.50- Payments to ABb (Pre October 2003) - Sections 220 & 227 Crimes Act; (Petricevic) B. $1,121,655.60-Payments to ABb (Post October 2003)-Sections 219 & 223 Crimes Act (Petricevic) Poseidon C. $1,805,866.11 - Purchase of the vessel Medici - Sections 220 & 227 Crimes Act; (Petricevic & Roest) D. $1,650,000 – Execution of Loan Document,; Non call on Debenture Stock-Section 229A Crimes Act (x2) (Petricevic & Roest) E. $350,000 - 1^st sponsorship agreement.-Section 229A Crimes Act;  (Petricevic & Roest) F. $250,000 - 2^nd sponsorship agreement-Section 228 C.A; (Petricevic & Roest) All charges laid, carry on conviction, a maximum term of imprisonment of 7 years. Investigations conducted into finance companies by the SFO Waipawa Finance: Investigation concluded and conviction secured against Warren Picket.on 29 May 2009. Sentence of 5 years upheld on appeal. National Finance: Investigation concluded and charges laid against John Gray and Trevor Allan Ludlow on 23 October 2009. Bridgecorp: Concluded and charges laid against Rodney Petricevic and Robert Roest Club Finance: Investigation concluded and no further action taken. Clegg Finance: Investigation concluded. On advice of the Crown Solicitors, no charges laid due to charges and convictions having already been secured by the Companies Office. Five Star Group: Currently under investigation, and nearing a conclusion. Nathans Finance: Currently under investigation, and awaiting a response to a request for international assistance from overseas enforcement agencies. Capital + Merchant: Investigation commenced in March 2010 and remains ongoing.