Mediaweb director John Clarke jailed for fraud

  • Law
  • December 11, 2015
  • Damien Venuto
Mediaweb director John Clarke jailed for fraud

The Mediaweb debacle has concluded with a jail term for former director John Clark, who was sentenced to three years' imprisonment earlier today at the Auckland District Court.

Fraud charges were originally laid against Clarke by the Serious Fraud Office (SFO) in September for the role he played in false accounting, using forged documents and obtaining by deception.

Clarke pled guilty to these charges in October. 

According to the SFO, Clarke  falsified financial statements to present a positive picture of MediaWeb’s financial position, created fictitious entries in MediaWeb’s accounting system to obtain money from a lending institution, forged emails, and failed to disclose the true financial position of MediaWeb in order to obtain funding from a Trust.

“Mr Clarke’s breaches of trust in relation to two separate entities enabled him to obtain funding and access to loan facilities of approximately $2.2 million," said SFO director Julie Read in a release. "The use of such deception to support a business undermines confidence in the small business sector and generally only defers the failure of the business harming others in the process. Prosecutions such as this by the SFO serve to send a message that this type of conduct is not only detrimental to the perceptions of New Zealand business in general but also serious criminal conduct.”

Previous story published on 6 October 2015: Mediaweb director John Clarke pleads guilty to two fraud charges, awaits sentencing trial 

The unravelling of Mediaweb has culminated in the company's former director John Clarke entering a guilty plea in relation to two charges laid by the Serious Fraud Office (SFO) at the Auckland District Court.   

Clarke faced two false accounting charges, one charge of using a forged document and one charge of obtaining by deception. 

Clarke pleaded guilty to falsifying financial statements to present a positive picture of MediaWeb’s financial position, creating fictitious entries in MediaWeb’s accounting system to obtain money from a lending institution, forging emails, and failing to disclose the true financial position of MediaWeb to obtain funding from a Trust.

This offending enabled Clarke to obtain money and access to loan facilities of approximately $2.2 million. 

SFO director Julie Read said: “Mr Clarke’s plea at this early stage of the proceedings will be a relief to witnesses and victims who would have otherwise been subjected to considerable stress in the course of a trial.”

Clarke will appear for sentencing at the Auckland District Court on 11 December, and faces a maximum imprisonment penalty of ten years in relation to charges associated with false accounting and using forged documents.     

Previous story published on 9 September 2015: Serious Fraud Office lays charges against Mediaweb director John Clarke 

Following on from the April report that the Mediaweb debacle had been handed over to the Serious Fraud Office (SFO), it has now been confirmed that two false accounting charges, one charge of using a forged document and one charge of obtaining by deception have been laid against former Mediaweb director John Clarke.  

The SFO alleges that Clarke was able to obtain money and access loan facilities of approximately $2.2 million through fraudulent activities.   

The SFO is set to present a case to Auckland district detailing alleged offences by Clarke, including falsifying financial statements to present a positive picture of MediaWeb’s financial position, creating fictitious entries in MediaWeb’s accounting system to obtain money from a lending institution, forging emails, and failing to disclose the true financial position of MediaWeb to obtain funding from a Trust.     

“Financial crime can have an impact on the cost of doing business for the whole community as well as causing harm to the lives and prosperity of those who are the victims of the crime," says SFO director Julie Read. "The SFO is working hard to combat these crimes to ensure New Zealand is a safe place to do business.”

Clarke will next appear at the Auckland District Court on 6 October 2015, and if found guilty faces a maximum imprisonment time of ten years in relation to charges associated with false accounting and using forged documents.     

Original story published on 28 April 2015: Mediaweb case handed to Serious Fraud Office

In March last year, Mediaweb went into receivership and later liquidation. And now the case has been handed over to the Serious Fraud Office, which is currently investigating the matter. 

McDonald Vague’s Peri Finnigan and Tony Maginness were appointed as the receivers for MediaWeb, the company that was founded by Toni Myers and John Clarke following the liquidation of 3Media (see the liquidators' report here).

During the first month of investigations, an email leaked to the press revealed that McDonald Vague found several anomalies when analysing the financial records of the struggling company. The message, written by McDonald Vague director Jared Booth, was initially intended only to be read by those involved in the tender process, and came shortly after Mediaweb went into liquidation on 21 March.

Booth detailed in the email that Mediaweb had not supplied all of its invoices for advertising services, products or value supplied to customers. On the basis of this omission and other financial discrepancies, Booth said that the receivers were of the opinion that the information provided by Mediaweb was reliant on misleading information, including the use of false or misleading invoices. And the letter then went on to say that Mediaweb's distribution of false financial information also predates the receivership, with the company also sending out false financial accounts for the year ended 31 March 2012.

At the time of writing the email, Booth said that he was unsure of the full extent of corporate dishonesty, but that he deemed it significant enough to bring to the attention of all prospective buyers. 

Upon further investigation, it seems that it was significant enough to justify the matter being handed over to the Serious Fraud Office.

Booth was asked for further details on the matter being referred to the SFO but said McDonald Vague "will not be making any comment on the receivership of Mediaweb Limited (In Receivership & In Liquidation)."

A spokesperson from the SFO confirmed that the body "was aware of the matter regarding Mediaweb," but similarly wouldn't make any further comments.

The receivers' second report showed that Mediaweb owed Heartland Bank $1.1 million, of which only $36,500 had been paid by November last year.

These figures led one source in the industry to comment: "If the SFO is indeed looking into Mediaweb I am pretty confident one complainant will be Heartland Bank, which got totally screwed."

Heartland Bank was asked for comment regarding the matter, but also did not want to make a statement given the investigation is currently ongoing. 

Another source close to the matter says that the matter also extends beyond Heartland Bank and affects many others and that the false invoices amounted to hundreds of thousands of dollars. 

This news comes as Glenda Wynyard, former director and owner of now-defunct company The Media Counsel, was sentenced to eight months' home detention after being found guilty of 11 Crimes Act charges laid by the SFO last year. 

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