Ex-Datasouth director admits $103m fraud

A former Datasouth Group director who spent greater than $1 million on "various female companions'' has admitted a $103 million fraud.

Gavin Clifford Bennett, 53, today pleaded guilty in Christchurch District Court to 6 representative charges concerning 900 separate incidents of dishonestly using a document, and two charges of false accounting.

The fees were brought by the intense Fraud Office (SFO) and on the topic of a $103m fraud involving a Ponzi-style scheme.

Bennett manage Datasouth Group to supply information technology-related services, including network design, consultancy and hardware leasing, within the mid-1990s. The crowd went into liquidation last year.

It was the hardware leasing, which involved finance through South Canterbury Finance (SCF), which brought about the SFO charges; Bennett would falsify agreements between Datasouth Finance and its customers, after which present them, as though genuine, to SCF to secure funding.

He also submitted false financial statements to SCF so that you can retain the continuing finance facility.

Bennett used his ill-gotten gains for a high-flying lifestyle, including:

* $A463,000 ($NZ595,290) to hire two luxury residential apartments within the Rocks, Sydney;

* $A900,000 in regular payments to female companions;

* $A429,000 on food and beverages, a "significant amount'' of which was spent at Hemmesphere bar and restaurant Sydney;

* $A161,000 on international air travel for Bennett and, on occasions, companions, including to Argentina, New York, Hong Kong, Las Vegas, New Caledonia, Rio de Janerio, San Francisco, Paris and London;

* $A16,000 on jewellery and flowers, including purchases at Tiffany & Co;

* $A53,000 on corporate taxi expenses; and

* $A163,000 on clothes and apparel, including purchases at Louis Vuitton, Cartier, Chanel, Giorgio Armani, Barney's and Bloomingdales New York, Victoria's Secret, Paul Smith, Gucci, Jimmy Choo and Harrods London.

SFO chief executive Adam Feeley said the resulting financial losses to SCF were at least $23m. That cost would ultimately be met by the taxpayer as SCF was part of the Government Guarantee Scheme.

Datasouth went into liquidation in March last year, leaving 31 staff without jobs.

"The collapse of Datasouth was a major event within the Christchurch business community and caused widespread losses,'' Mr Feeley said.

"Mr Bennett's guilty plea brings to a satisfactory end one in every of SFO's largest investigations in recent years.''

Bennett was remanded in custody for sentencing on May 3.

- APNZ

By Sharon Lundy | Email Sharon