Company Director sentenced for pro forma invoicing
Media release - Company Director sentenced for pro forma invoicing
Issued: 12 September
Release No: 18
Former company director Sonia Klair, was today sentenced to 10 months home detention at the Auckland District Court after pleading guilty to 64 charges brought by the Commerce Commission under the Crimes Act, in relation to her running a business which engaged in false billing practices, also known as pro-forma invoicing.
Ms Klair admitted operating a scheme which involved sending “special offer” documents to recipients offering to “renew” online business directory listings with Klair’s company NZ Look Ltd (NZ Look), even though the recipients had no previous listing with that business. NZ Look subsequently forwarded invoices, and in some cases debt recovery notices, seeking payment for services recipients had not agreed to acquire, or had agreed to acquire on the basis of a misrepresentation made to them.
Judge Field said that this was sophisticated offending which occurred over a substantial period of time. He said that Klair saw an opportunity to make money and that her offending involved particular planning and preparation. The Judge considered Klair’s motivation for the offending was pure greed.
Between July 2008 and August 2010 the offending resulted in a total turnover of more than $719,000.
This is the first time the Commission has brought charges under the Crimes Act. Previous prosecutions and resulting financial penalties imposed under the Fair Trading Act (FTA) had provided insufficient deterrence from such conduct.
This type of offending is viewed seriously by enforcement agencies due to the significant financial gains that can be made by offenders and the consequent losses to New Zealand businesses. In 2012 the Serious Fraud Office, NZ Police and Commerce Commission took a multi-agency approach with “Operation Edit” to target recidivist offenders who engage in this type of conduct.
The Commerce Commission’s Consumer Manager Stuart Wallace warned businesses to be wary of any unusual invoices they received and to ensure that they had good payment systems in place.
“To avoid being scammed it is important that all businesses, no matter what size, have an established system for approving invoices and make sure that all relevant staff know how it works.”
give staff the confidence to ignore the pressure placed on
them by people sending these false invoices. Some can be
very pushy and persistent in their demands for payments
which they have no legal right to receive,” said Mr
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