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R v ALLEN [2005] NZCA 62 (7 April 2005)

Last Updated: 20 April 2005

IN THE COURT OF APPEAL OF NEW ZEALAND

CA274/04
CA316/04

THE QUEEN

v

DONALD EUGENE ALLEN AND
STUART BUCKLAND

Hearing: 9 March 2005

Court: Anderson P, Heath and Doogue JJ

Counsel: R M Mansfield for Mr Allen
D S Niven for Mr Buckland
P J Davison QC and A M Killeen for Crown

Judgment: 7 April 2005

JUDGMENT OF THE COURT

A Mr Allen’s appeals against conviction and sentence are dismissed.

B Mr Buckland’s appeals against conviction and sentence are dismissed.

____________________________________________________________________

REASONS

(Given by Heath J)

Table of Contents

Para No

Introduction [1]
The nature of the fraud on the public [10]
The nature of the fraud on the bank [21]
Grounds of conviction appeals [25]
Grounds of sentence appeal [27]
Mr Allen’s conviction appeal

(a) The evidential issues [29]

(i) Admission of evidence of Mr Dofelmier [30]
(ii) The Dr van Lin video tape [49]
(iii) Admission of email communications [52]

(b) Should the jury have been discharged? [59]
(c) Judge’s comment on Mr Allen’s failure to give evidence [69]
(d) Mr Buckland’s conviction appeal – counsel error [81]

Sentence appeals

(a) Mr Allen’s appeal [89]
(b) Mr Buckland’s appeal [96]

Conclusions [100]

Introduction

[1] Mr Allen and Mr Buckland each appeal against their convictions and the sentences imposed in consequence of guilty verdicts delivered by a jury on fraud charges.
[2] Mr Allen and Mr Buckland, together with Mr and Mrs Christie, were tried before Judge Joyce QC and a jury in the District Court at Auckland. The trial arose out of an investigation by the Serious Fraud Office. The four accused and Mr Palmer were named in the indictment as co-conspirators. However, Mr Palmer was not before the Court at trial; he was otherwise detained in the United States of America. The trial was lengthy, starting on 16 February 2004 and concluding with the delivery of verdicts on 16 April 2004.
[3] Each accused was found guilty of conspiring, between 15 August 1999 and 16 August 2001, to defraud members of the public. Each was convicted.
[4] Mr Allen faced two additional, but alternative, charges. They were (a) using a document with intent to obtain a pecuniary advantage and (b) obtaining a loan by falsely representing his financial position and the purpose for which the loan moneys were to be used. Those frauds were allegedly committed after the conclusion of the conspiracy and in respect of a different victim, ASB Bank Ltd. Mr Allen was convicted on the charge of using a document with intent to obtain a pecuniary advantage. It was unnecessary for the jury to give a verdict on the alternative charge of misrepresentation.
[5] Although Mr and Mrs Christie appealed against conviction and sentence, they subsequently abandoned their appeal.
[6] At trial each accused accepted that the conduct in issue on the conspiracy charge amounted to a fraud on the public but asserted that it was Mr Palmer who perpetrated the fraud. The accused alleged that they too had been duped by Mr Palmer.
[7] On appeal, neither Mr Allen nor Mr Buckland contended that the verdicts reached by the jury were unsupported by the evidence. Counsel for each appellant accepted that there was evidence on which the jury was entitled to rely to find guilt on the part of both Mr Allen and Mr Buckland. Rather, their complaints centred on alleged errors of a procedural type which, it was contended, vitiated the verdicts.
[8] All four prisoners were sentenced on 11 June 2004. Judge Joyce regarded Mr Allen as the most culpable. He was sentenced to imprisonment for a term of 4 years and 3 months on the conspiracy charge and an additional term of 21 months imprisonment on the charge of using a document. The cumulative sentences imposed meant that Mr Allen’s effective sentence was one of 6 years imprisonment.
[9] Mr Buckland and Mr and Mrs Christie were each sentenced to 3 years and 3 months imprisonment on the conspiracy charge, the Judge regarding them as equally culpable.

The nature of the fraud on the public

[10] The frauds perpetrated on members of the public were, at one level, simple but, at another, sophisticated. They were simple in the sense that there was a clear intention to misrepresent the purpose for which funds were being solicited by the promoters of the scheme. They were sophisticated in the methodology employed to promote trust and confidence in the investment scheme among members of the public from whom moneys were to be solicited.
[11] The scheme involved various people associated with Mr Palmer using their personal contacts to assemble meetings of members of the public interested in an opportunity to invest on promises of high interest returns on a tax free basis.
[12] The respectability, within the community, of the people who promoted these meetings was an integral part of the way the scheme worked. Mr Allen made motivational speeches, with particular emphasis being placed on religious themes. The speeches were designed to reinforce the security of the investment to those who may have thought it too good to be true while, at the same time, exciting the interest of the gullible in pursuit of a "get rich quick" scheme.
[13] The religious themes were underpinned by the names chosen for the enterprise. Initially, the scheme was given the name Global Opportunities Development (GOD). Later that name was changed to Global Learning Opportunities Worldwide (GLOW).
[14] Another aspect of the scheme was the emphasis on off-shore seminars. Those seminars were held for the purpose of promoting different types of investment. During the currency of the alleged conspiracy, a seminar was held in Osaka in June 2000. After the enterprise’s name was changed to GLOW, another seminar was held in Fiji in November 2000. Further seminars were held in Penang in February and May 2001 and Bangkok in August 2001. During the course of these seminars there was much rhetoric designed to justify investment on a tax free basis.
[15] The promoters represented to members of the public attending their meetings that they would receive a high yield interest return of between 10% and 15% per month for a minimum investment of $50,000. In return, investors would receive access to entities formed in a tax haven jurisdiction so that any income derived from the investment would be tax free in New Zealand. Documentation prepared indicated that the tax haven jurisdiction of choice was the Republic of Panama.
[16] The moneys solicited were not invested for the purpose for which they were advanced. Instead, they were used for the benefit of those involved with the scheme. Some investors were repaid in order to promote confidence that the scheme worked. But those investors were quickly encouraged to re-invest. Using that methodology, the perpetrators of the fraud were able to maximise funds available for their own purposes, yet create the aura of repayment on due date.
[17] During the period of the alleged conspiracy, investment funds totalling $NZ9.4million were received from members of the New Zealand public. An analysis of the moneys advanced shows that $NZ4.6million was repaid to investors, but almost $NZ5million was applied for the benefit of those promoting the scheme.
[18] At trial, the Crown put its case on the basis we have outlined. It was submitted that Mr Allen was complicit with Mr Palmer in deciding to activate the scheme in New Zealand, effectively as a carbon copy of a scheme known to both Mr Palmer and Mr Allen that had operated in the United States under the name of Investors’ International.
[19] The Investors’ International scheme had been master-minded a by Dr van Lin. Evidence was introduced at trial from a special agent of the Federal Bureau of Investigation (FBI), Mr Dofelmier, about that scheme and what had happened to it. The Crown also introduced, through another witness, a video tape interview of an introduction by Dr van Lin to investors at an Investors’ International seminar.
[20] The Crown asserted that Mr Allen, Mr Buckland and Mr and Mrs Christie each had knowledge of the scheme operated by Dr van Lin, all having attended off-shore seminars held to promote that scheme. On that basis, the Crown contended that the subsequent participation of Mr Allen, Mr Buckland and Mr and Mrs Christie in a similar scheme in New Zealand was evidence of an intent to defraud, as opposed to an innocent coincidence.

The nature of the fraud on the bank

[21] After the conclusion of the alleged conspiracy, Mr Allen sought to obtain a sum of $1,200,000 from the ASB Bank. It was represented to the Bank that the moneys were required for additions to a property Mr Allen and Mr Palmer had acquired at Puriri Road, Whenuapai.
[22] In support of his application for finance, Mr Allen provided to the Bank a statement of his financial position. That document was signed on 20 November 2001. He included among his assets four houses in the United States said to be worth $500,000 and ten vehicles said to be worth $600,000. He disclosed annual income from speaking at seminars as $US1million and from private speaking engagements, $US500,000 per annum. Acting on that information the Bank approved the application and advanced an initial tranche of $750,000. That sum was drawn down on 25 February 2002.
[23] The evidence disclosed that Mr Allen used that money for a variety of purposes, including repayment of several investors in the scheme with whom he had close connections. In addition, he acquired a Harley Davidson motor cycle and paid for travel for his family to return to the United States.
[24] The Bank became aware, prior to advancing the second tranche of $500,000, of information relating to Mr Allen’s activities. It did not advance the second tranche. Ultimately, the Bank was repaid the amount advanced. Thus, no actual loss was suffered by the Bank.

Grounds of conviction appeals

[25] Mr Mansfield, for Mr Allen, raised five points in support of his conviction appeal. Those five points can be summarised as follows:

a) The admission of evidence from Mr Dofelmier about the scheme operated by Investors’ International in the United States.
b) The admission of the video tape of Dr van Lin’s address to a seminar arranged by Investors’ International.
c) The admission of three email communications between Mr Palmer and a Ms Mork. Those communications arose after the date on which the alleged conspiracy commenced.
d) The Judge’s failure to abort the trial and discharge the jury after documentation had been put before the jury, in the course of cross examination of defence witnesses. It was alleged that those documents were prejudicial to the accused and ought not to have been shown to the jury because they had not been admitted in evidence.
e) Comments by the trial Judge on Mr Allen’s decision not to give evidence and the impact of those comments on evidence adduced from Mr Allen’s wife who had been called to give evidence on her husband’s behalf.

[26] Mr Niven, for Mr Buckland, adopted the first four points advanced by Mr Mansfield. In addition, Mr Niven contended that Mr Buckland’s conviction ought to be set aside on the ground that his trial counsel failed to follow express instruction in relation to the calling of character evidence.

Grounds of sentence appeals

[27] On Mr Allen’s appeal, Mr Mansfield contended that the Judge erred in imposing cumulative sentences. There is no complaint about the sentence imposed on the conspiracy charge. Rather, the complaint is that the Judge failed to have regard to the totality principle in imposing a further sentence of imprisonment of 21 months cumulative on the 4 years 3 months imposed on the conspiracy charge. If the Judge were not entitled to impose cumulative sentences, the effect of the cumulative sentence imposed was to take the overall sentence in excess of the maximum penalty (5 years imprisonment) on the lead charge of conspiracy to defraud.
[28] Mr Buckland appealed against sentence on the grounds of manifest excess, though that submission was buttressed by a complaint based on disparity of sentences as between Mr and Mrs Christie and himself. Mr Niven submitted that the starting point taken by the Judge was too high and insufficient credit was given for mitigating factors.

Mr Allen’s conviction appeal

(a) The evidential issues

[29] We deal together with the first three issues raised by Mr Mansfield as each raises an evidential point.

(i) Admission of evidence of Mr Dofelmier

[30] The Crown intended to call Mr Dofelmier, the FBI agent, to give evidence of his expertise in investigating fraud and of the facts that led to the prosecution of individuals involved with Investors’ International, in particular Dr van Lin.
[31] An objection to Mr Dofelmier’s evidence was made by counsel at trial, before Mr Dofelmier was called, on grounds of irrelevance and hearsay. Mr Mansfield candidly accepted that, while the evidential foundation for the expert evidence had not (at the time of his objection) been laid, there had been adequate pre-trial disclosure of the evidence proposed to be adduced from Mr Dofelmier and that the evidence led conformed to that disclosure. Accordingly, we can focus on the substance of the complaint rather than the timing of the Judge’s ruling.
[32] Judge Joyce, in a ruling of 18 February 2004, said that "importantly for the present purpose" the Crown intended to demonstrate that Mr Allen, Mr Palmer, Mr Buckland and Mr and Mrs Christie "were (or became) aware of (even had a direct involvement in) the [Investors’ International] scheme and, surely, what kind of fate it suffered after the FBI intervened." By way of example, Judge Joyce referred to a business card he had been shown describing Mr and Mrs Christie as "approved II retailers."
[33] The relevance of Mr Dofelmier’s evidence was to demonstrate that a similar investment scheme had been operated in the United States. Other evidence would then link each accused to knowledge of the scheme and its consequences.
[34] The purpose of the evidence was to demonstrate fraudulent intent on the part of each accused and to rebut, in advance, any suggestion of an innocent coincidence between the schemes operated in New Zealand and the United States of America.
[35] The Judge admitted Mr Dofelmier’s evidence on the assumption that an adequate evidential foundation would be established by evidence to be led later by the Crown. The Judge concluded that the nature of Mr Dofelmier’s proposed evidence rendered it admissible as expert evidence.
[36] Subsequently (after Mr Dofelmier arrived in New Zealand) the Judge conducted a voir dire. In a further ruling given on 12 March 2004 the Judge, after hearing evidence from Mr Dofelmier, confirmed his decision to admit the evidence as expert evidence. In doing so, the Judge relied on R v Abadom [1983] 1 All ER 364 (CA) at 369, Marinovich v The Queen (1990) 46 A Crim R 282 (FC, SCWA) at 301 and R v Noll [1999] VSCA 164, at 3.
[37] The question is whether the Judge was entitled to admit Mr Dofelmier’s evidence as expert evidence.
[38] Mr Dofelmier gave evidence that he conducted the FBI investigation into the affairs of Dr van Lin and Investors International. He described the features and structure of Investors International and the way in which the promoters of that scheme solicited investment. He then explained how his investigation had resulted in the prosecution of Dr van Lin for fraud. That evidence provided a foundation from which the Crown could submit to the jury that the New Zealand scheme was promoted to take over functions previously undertaken by Investors International.
[39] The Crown then called additional evidence to link each accused to Investors International and to provide a basis on which the jury could safely find that each accused was aware of the nature of the Investors International business and the subsequent prosecution of promoters of that scheme in America. The evidence linking the accused to the Investors International scheme took a variety of forms. Examples of evidence led demonstrated that Mr Allen participated as a speaker at seminars run by Investors’ International. Mr and Mrs Christie had a business card describing them as "approved II retailers". Mr Buckland attended seminars, in particular seminars in the Caribbean and Kuala Lumpur in 1999. There was evidence that Mr Buckland encouraged others to involve themselves with the scheme.
[40] In our view, the Judge was right to conclude Mr Dofelmier’s evidence was admissible. Our reasons for reaching that conclusion are twofold:

a) Mr Dofelmier, as a result of his investigation of the Investors’ International scheme, was able to give evidence of the nature and purpose of that scheme so that the jury could compare what occurred in New Zealand with what had occurred in the United States. Sometimes it is difficult to draw a line between evidence of primary facts discovered during the course of an investigation and opinions as to consequences of a particular combination of facts. As Malcolm CJ and Kennedy J observed in Marinovich, at 301, that combination of evidence is, nevertheless, admissible. Their Honours said:

Expert evidence about such matters necessarily involves some hearsay evidence. It would be quite artificial and place an unnecessary restraint on prosecution and police work to limit such evidence to those who had been involved in undercover work .... .

b) The evidence was probative in the sense that it provided a comparison with the New Zealand conduct enabling the jury, by reference to other evidence, to decide whether the involvement of Mr Allen and Mr Buckland was with criminal intent rather than a result of innocence or naivety.

[41] In our view, without embarking upon a detailed examination of the evidence, there was a more than adequate foundation for the jury to infer both knowledge on the part of Mr Allen and Mr Buckland in the scheme operated by Dr van Lin in the United States of America and of Dr van Lin’s arrest on fraud charges at a time prior to the date on which the conspiracy allegedly commenced in New Zealand, 15 August 1999.
[42] In those circumstances, it was open to the jury to conclude (from the combination of evidence given by Mr Dofelmier and other witnesses) that Mr Allen’s and Mr Buckland’s participation in the New Zealand venture was not innocent or naïve. The evidence was sufficient for the jury to infer a dishonest intent, on the part of both Mr Allen and Mr Buckland, to benefit directly from moneys procured through investors.
[43] These conclusions are reinforced by reference to the bank accounts opened in Taupo (on 15 August 1999) when Mr Allen and Mr Palmer arrived in New Zealand and were driven to Taupo by Mr Buckland. A reconciliation of Mr Palmer’s account disclosed transfers totalling $NZ957,000 into Mr Allen’s account at the same bank. Large cash withdrawals were also made frequently, some being made in the United States at ATM machines in close proximity to Mr Allen’s American residence at a time when the only other person with access to the account, Mr Palmer, was in New Zealand.
[44] Other large sums paid out of Mr Palmer’s account at Taupo included credit card expenses (NZ$200,000), a deposit on a property acquired by Mr Allen and Mr Palmer at Whenuapai (NZ$200,000), personal expenditure by Mr Palmer ($NZ550,000), the acquisition of a limousine and motor home by Mr Palmer ($NZ125,000) and the purchase of Harley Davidson motor cycles for the personal use of Mr Palmer and Mr Allen ($NZ168,000). Mr Allen was a joint signatory to Mr Palmer’s ANZ Bank account at Taupo.
[45] The evidence established that Mr Buckland also received pecuniary benefits from invested funds. As Judge Joyce said on sentencing, Mr Buckland

invested money of his own and was more than very well rewarded for that. The substantial sums he received helped him to set about showing one and all that this was an opportunity both good, seemingly so, and true, allegedly so. (para [123]).

[46] We have considered whether the evidence, though relevant, was so prejudicial to the accused that it ought to have been ruled inadmissible on the grounds that its prejudicial value outweighed its probative value. There is nothing in the point. The evidence, for the reasons we have endeavoured to express, was probative of guilty intent. There is no reason to rule the evidence inadmissible on discretionary grounds.
[47] Our conclusion on the prejudicial/probative value point is reinforced by the directions given to the jury in respect of the evidence from Mr Dofelmier and the allied issue of admissibility of Dr van Lin’s video taped address to an Investors’ International seminar. At [84] of the summing up, Judge Joyce said:

[84] And so that I can move on once and for all from all mention of crime conviction issues, I take the opportunity now to make crystal clear that the fact that Dr van Lin, as he is called, and Mr Palmer have, on what we have heard, been sent to jail for criminal offences has but one possible relevance to this trial and it is this: should you conclude by reference to evidence you find satisfactory that at any relevant time relating directly to the alleged span of the conspiracy the accused whose situation you have under consideration was or became aware of those events in terms that he or she could not sensibly have done other than appreciate that that information made the matter of Mr Palmer’s promotions (as opposed, for example, to his lack of enthusiasm perhaps for paying tax) criminally suspect, then that would be part of the material available to you in your consideration of whether or not that accused had thereafter acted dishonestly.

[48] In our view, that direction was more than adequate to counter any illegitimate use to which the jury might, otherwise, have put the evidence of Mr Dofelmier and Dr van Lin’s address.

(ii) The Dr van Lin video tape

[49] The Judge admitted the video tape into evidence in a ruling given on 9 March 2004. That evidence was introduced through Mr Walker, a person who attended seminars run by Investors’ International following an introduction to that entity in 1998 or 1999. Mr Walker gave evidence of Mr Palmer speaking at a seminar he attended. He obtained a copy of Dr van Lin’s video tape introduction to the programme.
[50] Mr Mansfield, for Mr Allen, objected immediately to admission of this evidence on grounds of irrelevance and hearsay. The Judge recorded that the Crown did not intend to adduce the video tape as evidence of the truth of what Dr van Lin had said. Rather, the purpose of the evidence was to provide a foundation for evidence to be given by Mr Dofelmier.
[51] We are satisfied that the evidence was admissible for the reasons advanced by the Crown. Further, having regard to the Judge’s directions about the way the jury should treat this evidence the prejudicial value did not outweigh its probative value. Those directions are set out in [47] above.

(iii) Admission of email communications

[52] The email communications in issue involved Mr Palmer and occurred after the alleged commencement date of the conspiracy.
[53] The Crown case was that the email communications were relevant to Mr Palmer’s intent in relation to his proposed activities in New Zealand. Mr Davison submitted that Mr Allen’s subsequent participation with Ms Mork and Mr Palmer under the name "MAP" and their prior association and meeting through Investors’ International seminars meant that the email communications also had relevance to Mr Allen’s state of mind when participating with Mr Palmer.
[54] On the other hand, Mr Mansfield submitted that the communications were not evidence against Mr Allen and therefore ought not to have been admitted.
[55] The Judge ruled that the communications were admissible. His reasons for ruling were given on 18 February 2004. Judge Joyce said:

[47] Taken together (and in a wider evidential context) those put in issue are capable of assisting to identify Palmer’s state of mind, particularly of enthusiasm for the idea (post the Alaska cruise occasion) of promoting and pursuing the II kind of scheme in New Zealand and, indeed, Australia.
[48] That it is Mork – rather than Palmer – who apparently refers to making some "real cash" down under and to such a trip as "very worthwhile", was much emphasised by Mr Mansfield. But that was only for Mork to pick up on Palmer’s own "Inga, I’ve had a lot of people ask if we can do something in New Zealand ..." which precedes his commendation of her for (obviously) her Alaskan cruise presentation.

[56] Mr Palmer was an alleged conspirator. The emails were exchanged during the period of the alleged conspiracies. The evidence is therefore admissible against each conspirator on the basis of the co-conspirator rule: see R v Buckton [1985] 2 NZLR 257 (CA) and Cross on Evidence at 18.34.
[57] A firm direction is required from a trial Judge when evidence against one conspirator is adduced against all others. We are satisfied that the direction given by the Judge more than met that obligation. Judge Joyce said:

[48] Here I need to say that there is a further but associated-with-what-I-have-been-saying point that is particular to a charge like that of conspiracy to defraud. Once you are satisfied that there is a conspiracy the statements and acts of each by-then-identified co-conspirator are admissible not just against that person but against every other by-then-identified conspirator as well, and this is so even though they are made or done in his or her absence and without his or her knowledge.
[49] This rule enables the Crown to set out to present, if it can, what a legal textbook writer has called a panoramic picture of the overall conspiracy (which may consist of many elements) by adducing evidence of many of the statements made and acts done in the course of its performance. Thus may the Crown have all of that evidence admitted against each accused whether or not each has actually participated in that aspect of the performance of the conspiracy – this so long as he or she has been shown, beyond reasonable doubt of course, to have in fact knowingly joined in so as to become a member of the conspiratorial agreement.
[50] As it has been put, any act or declaration by one co-conspirator committed in furtherance of the conspiracy and during its existence is admissible against each and every co-conspirator provided that a foundation for its reception is laid by independent proof of the conspiracy itself. This approach can be seen as justified by the view that the combination to commit the crime or unlawful act implies an authority to each party of the combination to act and speak in furtherance of the common purpose on behalf of the others.
[51] When I talk of furtherance I talk about things done, written or spoken in the carrying-out of the conspiracy. So a mere admission by a party of involvement in conspiracy, though evidence against him or her of that, would not be evidence against alleged fellow-conspirators. Further, and importantly, acts and statements made before the conspiracy began or after it ended are only admissible against the person making them and should not be considered by you against any other accused.
[52] But even here there is a need for caution. As you will have recognised, there is in fact in this case evidence of things said and done by one or other of the alleged co-conspirators, and affecting one or more of the others, that is evidence of events occurring during the supposed span of the conspiracy. The caution is that it would be dangerous and unfair to convict any accused merely, that is to say simply and only, on the strength of statements in apparent furtherance of the conspiracy made by any other conspirator co-accused in their absence.
[53] Ultimately you must clearly and carefully have in mind as you individually consider the situation of each accused whether or not it has been shown beyond reasonable doubt that he or she – at some point and then for some period within the timeframe of the indictment – joined with one or more of the other alleged conspirators – which category, may I remind you, includes Mr Palmer, who would obviously have been charged if in the jurisdiction – in the agreement to defraud said to have been planned and then acted so as to make its consummation more likely.
[54] Here, and looking quite separately at each accused, you need to be satisfied that he or she knew of the essence of the scheme and its objective and had agreed to participate in the achievement of that. I will repeat that. Here, and looking quite separately at each accused, you need to be satisfied that he or she knew of the essence of the scheme and its objective and had agreed to participate in the achievement of that. If that is the case then he or she is a member of the conspiracy and criminally responsible accordingly.

[58] The evidence of the email communications was properly admitted. Any prejudice to Mr Allen and Mr Buckland that might otherwise have arisen from its admission was more than adequately dispelled by the terms in which the Judge summed up to the jury.

(b) Should the jury have been discharged?

[59] During the course of cross examination of a witness called on behalf of Mr Allen (Mr Pene, a Pastor of the Good Fight of Faith Church at Whenuapai), senior counsel for the Crown put to the witness a number of documents that were not in evidence. The material was put to the witness as relevant to his credit.
[60] The documents included a newspaper article that reported concerns of the Securities Commission in relation to investment schemes of the type promoted and a Press Release issued by the Securities Commission dated 24 July 2000. The present scheme fell within the "Goldrush" rubric. Those documents referred, in less than complimentary terms, to the nature of the scheme.
[61] The Press Release stated:

WARNING
Millionaires of the World (Part of the Hope Foundation Members Association S.A.) & Wairua Tahi Trust (Goldrush) Schemes
The Securities Commission is warning people about placing money with the Millionaires of the World (Part of the Hope Foundation Members Association S.A.) and the Wairua Tahi Trust (Goldrush) schemes or schemes related to them.
These schemes are being promoted in the Tauranga, Waikato and Auckland regions. It is understood that the promoters and agents are targeting church groups.
These schemes require contributors to send money to offshore bank accounts in Lichtenstein, the Isle of Man or Panama.
Agents for the Hope Foundation Members Association S.A. promote returns of between 10% and 40% per month through their schemes. The returns are claimed to be tax-free.
Additional profits earned on contributors’ funds are allegedly directed on behalf of the Hope Foundation towards providing disaster relief for poor countries.
The Millionaires of the World allegedly has Count Julian Graf von Heisermann, Grand Chancellor of the Knights of Malta,. As its patron.
Agents for the Wairua Tahi Trust promise tax free profits with zero or near zero risk and 15% per month returns.
The promoters of the scheme claim to have links with Investors International. The Commission has given previous warnings about Investors International. Its founder, Dr Rudolf van Lin, has been prosecuted by the United States Securities and Exchange Commission for the fraudulent offer and sale of unregistered securities in a related scheme called Sabre Asset Management.
The promoters of these schemes do not explain how, with whom and in what country contributors’ money will be applied. There are no financial statements. There is no prospectus and no investment statement to give the information normally required for conventional investments.
Contributors in schemes of this type generally do not receive promised profits or the return of their initial capital. The Commission warns people to be extremely cautious when dealing with the Hope Foundation or its associated entities, the Wairua Tahi Trust, schemes relating to either of them, or anyone claiming to represent them.
Potential investors should remember the old saying that if an offer looks too good to be true it probably is.

[62] During the course of the trial an electronic system was employed to view documentary exhibits. It is known as the "Verdict" system. The system is controlled by counsel for the Crown who, by typing a document number, has the ability to call up the image of a particular document from within the computer system. That image is then shown on various monitors located in the courtroom. Those monitors display the image to the Judge, counsel, the witness and the jury.
[63] If cross examination had proceeded without electronic documentation, any document put to a witness that had not been produced in evidence would not be seen by the jury. Mr Mansfield argued that because of the potential prejudice to the accused, through the jury viewing these documents, the Judge ought to have aborted the trial and discharged the jury. At trial, and before us, he relied on s 374(1) of the Act, particularly the ground permitting a Judge to discharge the jury if it is "highly expedient for the ends of justice" to do so.
[64] The application to discharge the jury was made on 29 March 2004. The Judge ruled on the application on 30 March 2004 providing more detailed reasons for his ruling on 2 April 2004. At [4]-[11] of the ruling the Judge said:

[4] ... in my view Mr Davison was perfectly entitled to test his credibility by putting to him for his reaction the apparent queries and concerns of a regulatory body, vented in the public domain as early as July 2000. After all, Mr Pene’s limited examination-in-chief account of the schemes he and his trust were involved in gave no hint of any such concerns.
[5] I interpolate that had we been dealing with documents conventionally the two or three in question would have been shown to the witness without being seen by the jury. The point could have been made without wider production of event limited kind. Any questions of relevance versus prejudice arising, if the witness sufficiently identified any of them as to allow the possibility of formal production, could have been dealt with unobtrusively.
[6] It is, indeed, a pity that the verdict system is not yet enhanced so as to allow documents to be displayed on all but the jury screens. No doubt that will come.
[7] In the meantime I direct that any material such as might give rise to like query and which has not got the prior vetting of all counsel is to be put to the witness as traditionally.
[8] I immediately say that I do not mean by that at all some general reversal of the practice of taking advantage of the sheer utility of the electronic presentation system. My comment is merely and only directed at externally generated material not supported by direct evidence in the trial, of the genre that gave rise to the complaint.
[9] Returning to the main point and having recognised Mr Davison’s endeavour as essentially legitimate I have also recognised the fear of Mr Mansfield particularly of prejudicial consequences with the jury of an irremediable kind. With great respect I conclude such to be entirely unfounded. Such fears do an unintended disservice to the jury’s ability to separate grain from straw, especially after a suitable instruction as I shall seek to give.
[10] Such fears also give a dimension to the incident in question that it cannot warrant, especially in the context of a trial like this with its ever-increasing mount, if not mountain, of evidential material – a trial that is now (if my count is right) in its sixth actually unbroken week and has a distance to go even yet.
[11] I shall when the jury comes in in a moment give them a suitable instruction.

[65] Immediately after giving the ruling the Judge provided detailed instructions on this issue to the jury. The Judge said:

Good morning everyone, can I first of all say [to] you that we are giving necessary attention to a couple of difficulties that have been raised and we’ll get back to you on those and I’m sure everything will end up being resolved to everybody’s satisfaction. Putting that to one side there is a particular matter that I want to speak to you about before we come back to Mrs Christie’s evidence. You will recall that yesterday morning when Mr Pene was cross examined by Mr Davison, Mr Davison showed him some documents which were flashed up on our screens at the time, relating to queries and a newspaper report of them apparently raised by the Securities Commission over investment schemes, including such as was apparently being promoted by Mr Pene’s trust. I must, and now do, make something very clear to you about all that. Mr Davison was entitled to ask Mr Pene about his awareness of any concern about such as his trust schemes expressed by any regulatory authority, but reference to them and Mr Pene’s acknowledgement of an awareness of them in no way establishes that there was actual foundation for those concerns. This is perhaps a good time to remind you that your task in this case is of course simply, and only, to reach your determination on the basis of admissible evidence properly put before you in the course of the trial – proper, because it is just that, admissible and necessarily of course as well, relevant. Had we not been using the electronic system the documents would merely have been handed to Mr Pene for reaction and comment and the rest of us would not have seen them. Your task therefore is to proceed as if things had happened that way and not as they actually did. You can recognise that Mr Pene when under cross examination acknowledged an awareness of concerns about such enterprises but there can be no question at all of attaching substance to them simply on account of what you may have seen in the documents when they were on the screen.

[66] With respect, Mr Mansfield’s argument on this point is untenable. The record of the evidence given at trial indicates clearly that the relevant documents were on screen for a limited time. It is unlikely that the jury, while concentrating on the oral evidence of Mr Pene, would have had sufficient time to comprehend fully the effect of the article. In any event, the documents were in the public domain and the issues raised in them were well known to the jury by the time Mr Pene gave evidence. Finally, even if some prejudicial effect were assumed, the Judge’s direction to the jury was more than sufficient to deal with it.
[67] We find in favour of the Crown on this issue, broadly for the reasons given by the Judge.
[68] It would be preferable, when using a system such as the "Verdict" computer system, to have the technical ability to turn off the jury monitor when a document not produced in evidence is put to a witness. It cannot be beyond modern technological know-how to adapt the system to ensure, as Judge Joyce suggested, that the jury’s screen be turned off when such documents are put. That will avoid this point arising in the future, perhaps in a more difficult situation for the Crown to meet.

(c) Judge’s comment on Mr Allen’s failure to give evidence

[69] Section 366(1) of the Crimes Act 1961 provides:

366 Comment on failure to give evidence
(1) Where a person charged with an offence refrains from giving evidence as a witness, no person other than the person charged or his counsel or the Judge shall comment on that fact.

[70] The Judge elected, in this case, to comment on the fact that Mr Allen had not given evidence himself. During the course of his summing up Judge Joyce said:

[94] There is a short rider that I wish to add which, I emphasise, relates only to the case against Mr Allen. You heard a number of investors cross examined about matters relating to what Mr Allen had said at seminars and elsewhere about his earlier life and background, about him frequently relating a kind of rags-to-riches story as part of a you-can-do-it-if-you-truly-put-your-mind-to-it kind of motivational enterprise.
[95] You have also since heard evidence called by him, particularly that given by his wife, and you may have got the impression that, in material part at least, that was called to affirm or support his personal credentials and accomplishments. Further, and in respect of counts 2 and 3, you will recall that Mr Mansfield cross examined Mr Sadler in terms putting to that witness for comment or response questions of the kind, "And did Mr Allen say this? And did not Mr Allen say that?" and so on.
[96] All this may have left you with the impression that Mr Allen would inevitably have spoken of such matters had he given evidence. I remind you that, with the onus of proof resting squarely and solidly on the Crown throughout to make out its case beyond any reasonable doubt, an accused is under no obligation whatsoever to give evidence. But in this case, you the jury might have expected him to go into the witness box and tell you directly what his wife, especially, has told you – or sought to tell you – of those matters whether directly or by implication.
[97] In these circumstances, as I re-emphasise, you must in no way assume that he is guilty because he has not given evidence, but what you may do when assessing whether his wife was in any position usefully to help you determine the truth of matters, is take account of the fact that he did not himself give evidence concerning them.
[98] In other words, you are entitled to assess the strength of that evidence bearing in mind that, in a situation where you might have expected there to be such, there was no direct evidence from Mr Allen about what he would apparently identify as his credentials as a motivational speaker or about his dealings with Mr Sadler.
[99] But, that said, I repeat and remind you once more of the fundamental principle that an accused has no obligation to give evidence, so that by not giving evidence an accused does not in any way relieve the Crown of its responsibility to make its case on the evidence as it is beyond reasonable doubt. So that the one thing you must not do, ever, is to assume that, because he has not himself given evidence, he is guilty of any one or more of the counts that he faces.

[71] Mr Mansfield submitted that the Judge did not restrict his comment to the fact that Mr Allen had refrained from giving evidence; rather his comment had the effect of undermining the veracity or reliability of evidence given on his behalf by his wife. That submission was based on the Judge’s comment at [96] of his summing up.
[72] Shorn to its core, Mr Mansfield’s point was that by telling the jury that they might have expected Mr Allen to go into the witness box and recount directly what Mrs Allen sought to tell the jury, the Judge effectively criticised the evidence of Mrs Allen and undermined it.
[73] We agree with Mr Mansfield that there is no logical connection between an accused refraining from giving evidence and the weight to be given to evidence adduced through another witness about matters on which the accused could have given direct evidence. As long as the other evidence is admissible it is for the jury to determine the weight to be given to it based on their assessment of the witness and its reliability.
[74] Mr Davison submitted that the Judge was, as a matter of law, entitled to comment more directly on the absence of evidence from Mr Allen. He also noted the need to consider Mrs Allen’s evidence as a whole to understand the message being conveyed to the jury by the Judge. Mr Davison submitted that had the Judge commented to the full extent he was entitled (and might have been expected to comment in the circumstances of the case) the position would have been worse for Mr Allen. In those circumstances he submitted that the comment did not give rise to any miscarriage of justice.
[75] The circumstances in which a Judge may comment on the election of an accused not to give evidence were discussed in R v McRae (1993) 10 CRNZ 61 (CA), 64-65. Delivering the judgment of this Court, Tipping J said at 64:

It would be inappropriate to endeavour to catalogue the circumstances in which a Judge should or should not exercise the power to comment. Obviously an accused person who refrains from giving evidence must realise that he or she does so at the risk of comment: see R v Butcher and Burgess [1992] 2 NZLR 257, 268; (1991) 7 CRNZ 407, 419 (CA) per Cooke P, and R v McCarthy [1992] 2 NZLR 550. Without prejudice to the generality of the discretion there are some circumstances in which an accused person might expect a comment. We note some of those without intending to be exhaustive. If an accused person has been given leave to cross-examine a complainant as to credit, in circumstances where he could be expected to give evidence himself, then a strong comment may well be justified if he fails to do so: see R v Green unreported, 18 February 1992, CA119/92.
If an accused person relies on an exculpatory statement and the matters referred to therein but gives no evidence to back up the statement, then a balanced comment might well be justified. Again if an accused person through counsel has made a suggestion that someone else is responsible for the crime but gives no evidence in support of that proposition a comment could reasonably be expected: see for example R v Accused (CA78/88) [1988] 2 NZLR 385; (1988) 4 CRNZ 208 (CA). In some cases an attempt is made by the accused to get his version of events before the jury by putting factual allegations to Crown witnesses. If those allegations are not accepted and the accused refrains from giving evidence then an appropriate comment might well be anticipated. (our emphasis)

[76] In McRae the Court held that the Judge did not err in making a s 366(1) comment. The Court held that the Judge was entitled to comment for the purpose of drawing to the jury’s attention the fact that evidence called by the Crown, while heavily challenged, had not been contradicted by the accused: at 65.
[77] Judge Joyce spoke about whether the jury might have expected Mr Allen to respond to the Crown case directly, having regard to the evidence adduced. His comments about the evidence of Mrs Allen should be seen in that limited light. It seems clear that the Judge decided to comment on the basis set out in the passage we highlighted from the quoted extract of McRae: see [75] above.
[78] The Judge went on to emphasise that the jury must not assume Mr Allen to be guilty because he had not given evidence. He invited the jury to assess the strength of the evidence against Mr Allen. Finally, in that particular section of the summing up, Judge Joyce reinforced the "fundamental principle" that an accused has no obligation to give evidence and that, by electing not to give evidence, an accused does not relieve the Crown of its obligation to prove the case beyond reasonable doubt.
[79] We are satisfied that, when read as a whole in the context of a lengthy summing up, the jury would not have been misled about the way they should evaluate evidence given by Mrs Allen. We are acutely aware that, in a case such as this (which had been the subject of evidence over almost two months) it would be inappropriate to subject the summing up to minute analysis. A jury listening to a lengthy summing up will be influenced by the general tenor of the Judge’s remarks rather than by particular sentences taken out of context. In this case, the fact that Mr Allen was not required to give evidence was emphasised by the Judge. The way in which he dealt with Mrs Allen’s evidence was not the subject of undue emphasis by comparison.
[80] While it would have been preferable for the Judge to have expressed his comment along the lines suggested in McRae, we are satisfied that there has been no error by the Judge amounting to a miscarriage of justice. For that reason, this ground of appeal also fails.

(d) Mr Buckland’s conviction appeal – counsel error

[81] Mr Buckland contended that his conviction ought to be set aside by reason of counsel error. The law is clear: any error by trial counsel must be of a type properly characterised as "radical". Only if an error of that character were established will the Court consider the possibility of setting aside a conviction.
[82] The applicable principles are well known. It is sufficient, for present purposes, to refer to R v Pointon [1985] 1 NZLR 109 (CA) and R v S [1998] 3 NZLR 392 (CA) and R v Momo (CA115/02, 23 July 2002). In Momo, at [14] the point was put as follows:

Where there is an alleged error through failure to call a witness, at the request of an accused, it must be clear that the instructions are simply not an expression of an appellant’s views on a particular matter but were intended to be directions to be observed and implemented by counsel so that they had to be followed irrespective of whether or not they might be bound to the client’s disadvantage.

[83] Experience suggests that many complaints of counsel error are based on retrospective analysis of the wisdom of taking a particular course of action rather than whether the action was agreed at the relevant time.
[84] There are conflicting affidavits from Mr Buckland and the two counsel who represented him at trial. We cannot resolve the conflicts on the affidavits. There was no application for leave to cross examine on the affidavits filed. Nor were we provided with affidavits from proposed witnesses.
[85] Many of the complaints made by Mr Buckland are irrelevant to the ultimate verdict to convict. Mr Niven accepted that the real issue was an alleged failure to call character witnesses on behalf of Mr Buckland. Mr Buckland says that he gave instructions for that to be done. Counsel representing Mr Buckland accept that those matters were raised by him. They say that the issue was discussed and senior counsel asserts that he used his judgment in determining not to call that evidence because he considered Mr Buckland had made an adequate impression in the witness box and that "parading" a number of character witnesses at the end of a long trial might be counter-productive. Senior counsel at trial deposed that Mr Buckland concurred in that view. Certainly there is no evidence from Mr Buckland suggesting that he objected either before or after his counsel closed his case.
[86] The explanation given by counsel for not calling character witnesses is plausible and, in the context of the present trial, reasonable.
[87] However, there is a more fundamental point. Mr Buckland’s prior good character and reputation was already before the Court. The Crown case relied on that character as part of the scheme for inducing investors to feel confident in it. It is difficult to see how defence evidence to the same effect as the Crown’s proposition could have advanced the appellant’s case on that issue.
[88] In any event there was no evidence before this Court as to what specifically the possible witnesses might say. It takes more than bare assertions or speculation by an appellant as to what a possible witness might have said at trial before an appellate Court ought be disposed to thinking that a miscarriage of justice might have been occasioned by the omission to call any potential witness. It is usual for potential witnesses in such circumstances to have deposed, by affidavit, what the evidence is that they would have given before a trial Court. Mr Niven requested time to take instructions on whether an adjournment should be sought in order to obtain affidavits. We declined the application. It was much too belated and still remained speculative. This ground of appeal fails also.

Sentence appeals

(a) Mr Allen’s appeal

[89] Mr Allen’s appeal is based on manifest excess, coupled with the suggestion that the Judge ought not to have imposed a cumulative sentence on the charge of using a document with intent to obtain a pecuniary advantage.
[90] The two frauds were of a different character. Mr Allen’s conviction on the conspiracy charge shows that the jury accepted beyond reasonable doubt that Mr Allen intended to defraud members of the public and received significant personal benefit as a result. The charge of using a document with intent to obtain a pecuniary advantage was a fraud on the ASB Bank carried out at a time when Mr Allen knew he was in financial difficulties while the amount was large ($NZ1.2million), ultimately the bank did not suffer a loss. Further, the bank fraud occurred outside the period of the conspiracy.
[91] The differences between the two frauds, in terms of kind and timing, satisfy us that a cumulative sentence was appropriate. Certainly we have not been satisfied that this was an inappropriate response to the offending. Section 84 of the Sentencing Act provides guidance on the circumstances in which a cumulative sentence is appropriate:

84 Guidance on use of cumulative and concurrent sentences of imprisonment
(1) Cumulative sentences of imprisonment are generally appropriate if the offences for which an offender is being sentenced are different in kind, whether or not they are a connected series of offences.
(2) Concurrent sentences of imprisonment are generally appropriate if the offences for which an offender is being sentenced are of a similar kind and are a connected series of offences.
(3) In determining for the purpose of this section whether 2 or more offences committed by 1 offender are a connected series of offences, the court may consider--
(a) the time at which they occurred; or
(b) the overall nature of the offending; or

(c) any other relationship between the offences that the court considers relevant.

Section 84(1) entitled the Judge to impose cumulative sentences.

[92] We regard the sentence of 4 years 3 months imprisonment on the conspiracy charge as, if anything, lenient. The nature of the fraud and the many millions of dollars stolen from investors and appropriated for alternative purposes puts the offending at the high end of the scale for offending of its type. Under the Sentencing Act (s 8(1)(b) and (d)) that entitled the Court to impose the maximum penalty or a penalty close to the maximum available.
[93] Also, the fraud on the bank was serious. It was premeditated. While the bank suffered no loss that does not affect the seriousness of the offending. Ultimately, the lack of any loss was fortuitous. A sentence of 21 months imprisonment on a charge carrying a maximum of 7 years imprisonment cannot be characterised as manifestly excessive.
[94] We emphasise the need for sentences that denounce conduct and are designed to deter in cases such as the present. As this Court has previously observed, sentences ought not to be pitched at a level which provide an economic incentive for people to breach the criminal law: cf R v Conway (CA234/04, 8 November 2004) at [76].
[95] Finally, the total sentence of 6 years imprisonment was not manifestly excessive having regard to the nature of the frauds we have described and their premeditated perpetration.

(b) Mr Buckland’s appeal

[96] Mr Buckland’s role was assessed by the Judge to be the same as Mr and Mrs Christie. They have abandoned their appeal against the same sentence.
[97] Mr Niven pointed to various aspects in the evidence suggesting that Mr Buckland ought to have been treated more leniently than Mr and Mrs Christie.
[98] It was open to the Judge to proceed on the basis suggested by Mr Niven, but he did not. He made it very clear in his sentencing remarks that Mr Buckland received substantial sums. He was described by the Judge as "an unabashed salesman for the enterprise". Notwithstanding his age (60 years) and the fact that he had no prior convictions, the Judge took the view that he ought to be equated to Mr and Mrs Christie, two people in their mid 40s with no previous convictions.
[99] The Judge who presided over this lengthy trial was in a much better position to assess relative culpability than we are. There is no basis for us to interfere with his assessment. The sentences imposed on Mr Buckland and the Christies were within the range available to the Judge. Accordingly, Mr Buckland’s appeal must fail, both in respect of manifest excess and disparity

Conclusions

[100] For the reasons we have given, both Mr Allen’s and Mr Buckland’s appeals against conviction and sentence are dismissed.

Solicitors:
Crown Law Office, Wellington

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*(i)*	*Admission of evidence of Mr Dofelmier* [30]
*(ii)*	*The Dr van Lin video tape* [49]
*(iii)*	*Admission of email communications* [52]

*(a)*	*Mr Allen’s appeal* [89]
*(b)*	*Mr Buckland’s appeal* [96]

[1]	Mr Allen and Mr Buckland each appeal against their convictions and the sentences imposed in consequence of guilty verdicts delivered by a jury on fraud charges.
[2]	Mr Allen and Mr Buckland, together with Mr and Mrs Christie, were tried before Judge Joyce QC and a jury in the District Court at Auckland. The trial arose out of an investigation by the Serious Fraud Office. The four accused and Mr Palmer were named in the indictment as co-conspirators. However, Mr Palmer was not before the Court at trial; he was otherwise detained in the United States of America. The trial was lengthy, starting on 16 February 2004 and concluding with the delivery of verdicts on 16 April 2004.
[3]	Each accused was found guilty of conspiring, between 15 August 1999 and 16 August 2001, to defraud members of the public. Each was convicted.
[4]	Mr Allen faced two additional, but alternative, charges. They were (a) using a document with intent to obtain a pecuniary advantage and (b) obtaining a loan by falsely representing his financial position and the purpose for which the loan moneys were to be used. Those frauds were allegedly committed after the conclusion of the conspiracy and in respect of a different victim, ASB Bank Ltd. Mr Allen was convicted on the charge of using a document with intent to obtain a pecuniary advantage. It was unnecessary for the jury to give a verdict on the alternative charge of misrepresentation.
[5]	Although Mr and Mrs Christie appealed against conviction and sentence, they subsequently abandoned their appeal.
[6]	At trial each accused accepted that the conduct in issue on the conspiracy charge amounted to a fraud on the public but asserted that it was Mr Palmer who perpetrated the fraud. The accused alleged that they too had been duped by Mr Palmer.
[7]	On appeal, neither Mr Allen nor Mr Buckland contended that the verdicts reached by the jury were unsupported by the evidence. Counsel for each appellant accepted that there was evidence on which the jury was entitled to rely to find guilt on the part of both Mr Allen and Mr Buckland. Rather, their complaints centred on alleged errors of a procedural type which, it was contended, vitiated the verdicts.
[8]	All four prisoners were sentenced on 11 June 2004. Judge Joyce regarded Mr Allen as the most culpable. He was sentenced to imprisonment for a term of 4 years and 3 months on the conspiracy charge and an additional term of 21 months imprisonment on the charge of using a document. The cumulative sentences imposed meant that Mr Allen’s effective sentence was one of 6 years imprisonment.
[9]	Mr Buckland and Mr and Mrs Christie were each sentenced to 3 years and 3 months imprisonment on the conspiracy charge, the Judge regarding them as equally culpable.

[10]	The frauds perpetrated on members of the public were, at one level, simple but, at another, sophisticated. They were simple in the sense that there was a clear intention to misrepresent the purpose for which funds were being solicited by the promoters of the scheme. They were sophisticated in the methodology employed to promote trust and confidence in the investment scheme among members of the public from whom moneys were to be solicited.
[11]	The scheme involved various people associated with Mr Palmer using their personal contacts to assemble meetings of members of the public interested in an opportunity to invest on promises of high interest returns on a tax free basis.
[12]	The respectability, within the community, of the people who promoted these meetings was an integral part of the way the scheme worked. Mr Allen made motivational speeches, with particular emphasis being placed on religious themes. The speeches were designed to reinforce the security of the investment to those who may have thought it too good to be true while, at the same time, exciting the interest of the gullible in pursuit of a "get rich quick" scheme.
[13]	The religious themes were underpinned by the names chosen for the enterprise. Initially, the scheme was given the name Global Opportunities Development (GOD). Later that name was changed to Global Learning Opportunities Worldwide (GLOW).
[14]	Another aspect of the scheme was the emphasis on off-shore seminars. Those seminars were held for the purpose of promoting different types of investment. During the currency of the alleged conspiracy, a seminar was held in Osaka in June 2000. After the enterprise’s name was changed to GLOW, another seminar was held in Fiji in November 2000. Further seminars were held in Penang in February and May 2001 and Bangkok in August 2001. During the course of these seminars there was much rhetoric designed to justify investment on a tax free basis.
[15]	The promoters represented to members of the public attending their meetings that they would receive a high yield interest return of between 10% and 15% per month for a minimum investment of $50,000. In return, investors would receive access to entities formed in a tax haven jurisdiction so that any income derived from the investment would be tax free in New Zealand. Documentation prepared indicated that the tax haven jurisdiction of choice was the Republic of Panama.
[16]	The moneys solicited were not invested for the purpose for which they were advanced. Instead, they were used for the benefit of those involved with the scheme. Some investors were repaid in order to promote confidence that the scheme worked. But those investors were quickly encouraged to re-invest. Using that methodology, the perpetrators of the fraud were able to maximise funds available for their own purposes, yet create the aura of repayment on due date.
[17]	During the period of the alleged conspiracy, investment funds totalling $NZ9.4million were received from members of the New Zealand public. An analysis of the moneys advanced shows that $NZ4.6million was repaid to investors, but almost $NZ5million was applied for the benefit of those promoting the scheme.
[18]	At trial, the Crown put its case on the basis we have outlined. It was submitted that Mr Allen was complicit with Mr Palmer in deciding to activate the scheme in New Zealand, effectively as a carbon copy of a scheme known to both Mr Palmer and Mr Allen that had operated in the United States under the name of Investors’ International.
[19]	The Investors’ International scheme had been master-minded a by Dr van Lin. Evidence was introduced at trial from a special agent of the Federal Bureau of Investigation (FBI), Mr Dofelmier, about that scheme and what had happened to it. The Crown also introduced, through another witness, a video tape interview of an introduction by Dr van Lin to investors at an Investors’ International seminar.
[20]	The Crown asserted that Mr Allen, Mr Buckland and Mr and Mrs Christie each had knowledge of the scheme operated by Dr van Lin, all having attended off-shore seminars held to promote that scheme. On that basis, the Crown contended that the subsequent participation of Mr Allen, Mr Buckland and Mr and Mrs Christie in a similar scheme in New Zealand was evidence of an intent to defraud, as opposed to an innocent coincidence.

[21]	After the conclusion of the alleged conspiracy, Mr Allen sought to obtain a sum of $1,200,000 from the ASB Bank. It was represented to the Bank that the moneys were required for additions to a property Mr Allen and Mr Palmer had acquired at Puriri Road, Whenuapai.
[22]	In support of his application for finance, Mr Allen provided to the Bank a statement of his financial position. That document was signed on 20 November 2001. He included among his assets four houses in the United States said to be worth $500,000 and ten vehicles said to be worth $600,000. He disclosed annual income from speaking at seminars as $US1million and from private speaking engagements, $US500,000 per annum. Acting on that information the Bank approved the application and advanced an initial tranche of $750,000. That sum was drawn down on 25 February 2002.
[23]	The evidence disclosed that Mr Allen used that money for a variety of purposes, including repayment of several investors in the scheme with whom he had close connections. In addition, he acquired a Harley Davidson motor cycle and paid for travel for his family to return to the United States.
[24]	The Bank became aware, prior to advancing the second tranche of $500,000, of information relating to Mr Allen’s activities. It did not advance the second tranche. Ultimately, the Bank was repaid the amount advanced. Thus, no actual loss was suffered by the Bank.

[30]	The Crown intended to call Mr Dofelmier, the FBI agent, to give evidence of his expertise in investigating fraud and of the facts that led to the prosecution of individuals involved with Investors’ International, in particular Dr van Lin.
[31]	An objection to Mr Dofelmier’s evidence was made by counsel at trial, before Mr Dofelmier was called, on grounds of irrelevance and hearsay. Mr Mansfield candidly accepted that, while the evidential foundation for the expert evidence had not (at the time of his objection) been laid, there had been adequate pre-trial disclosure of the evidence proposed to be adduced from Mr Dofelmier and that the evidence led conformed to that disclosure. Accordingly, we can focus on the substance of the complaint rather than the timing of the Judge’s ruling.
[32]	Judge Joyce, in a ruling of 18 February 2004, said that "importantly for the present purpose" the Crown intended to demonstrate that Mr Allen, Mr Palmer, Mr Buckland and Mr and Mrs Christie "were (or became) aware of (even had a direct involvement in) the [Investors’ International] scheme and, surely, what kind of fate it suffered after the FBI intervened." By way of example, Judge Joyce referred to a business card he had been shown describing Mr and Mrs Christie as "approved II retailers."
[33]	The relevance of Mr Dofelmier’s evidence was to demonstrate that a similar investment scheme had been operated in the United States. Other evidence would then link each accused to knowledge of the scheme and its consequences.
[34]	The purpose of the evidence was to demonstrate fraudulent intent on the part of each accused and to rebut, in advance, any suggestion of an innocent coincidence between the schemes operated in New Zealand and the United States of America.
[35]	The Judge admitted Mr Dofelmier’s evidence on the assumption that an adequate evidential foundation would be established by evidence to be led later by the Crown. The Judge concluded that the nature of Mr Dofelmier’s proposed evidence rendered it admissible as expert evidence.
[36]	Subsequently (after Mr Dofelmier arrived in New Zealand) the Judge conducted a voir dire. In a further ruling given on 12 March 2004 the Judge, after hearing evidence from Mr Dofelmier, confirmed his decision to admit the evidence as expert evidence. In doing so, the Judge relied on R v Abadom [1983] 1 All ER 364 (CA) at 369, Marinovich v The Queen (1990) 46 A Crim R 282 (FC, SCWA) at 301 and R v Noll [1999] VSCA 164, at 3.
[37]	The question is whether the Judge was entitled to admit Mr Dofelmier’s evidence as expert evidence.
[38]	Mr Dofelmier gave evidence that he conducted the FBI investigation into the affairs of Dr van Lin and Investors International. He described the features and structure of Investors International and the way in which the promoters of that scheme solicited investment. He then explained how his investigation had resulted in the prosecution of Dr van Lin for fraud. That evidence provided a foundation from which the Crown could submit to the jury that the New Zealand scheme was promoted to take over functions previously undertaken by Investors International.
[39]	The Crown then called additional evidence to link each accused to Investors International and to provide a basis on which the jury could safely find that each accused was aware of the nature of the Investors International business and the subsequent prosecution of promoters of that scheme in America. The evidence linking the accused to the Investors International scheme took a variety of forms. Examples of evidence led demonstrated that Mr Allen participated as a speaker at seminars run by Investors’ International. Mr and Mrs Christie had a business card describing them as "approved II retailers". Mr Buckland attended seminars, in particular seminars in the Caribbean and Kuala Lumpur in 1999. There was evidence that Mr Buckland encouraged others to involve themselves with the scheme.
[40]	In our view, the Judge was right to conclude Mr Dofelmier’s evidence was admissible. Our reasons for reaching that conclusion are twofold:

[41]	In our view, without embarking upon a detailed examination of the evidence, there was a more than adequate foundation for the jury to infer both knowledge on the part of Mr Allen and Mr Buckland in the scheme operated by Dr van Lin in the United States of America and of Dr van Lin’s arrest on fraud charges at a time prior to the date on which the conspiracy allegedly commenced in New Zealand, 15 August 1999.
[42]	In those circumstances, it was open to the jury to conclude (from the combination of evidence given by Mr Dofelmier and other witnesses) that Mr Allen’s and Mr Buckland’s participation in the New Zealand venture was not innocent or naïve. The evidence was sufficient for the jury to infer a dishonest intent, on the part of both Mr Allen and Mr Buckland, to benefit directly from moneys procured through investors.
[43]	These conclusions are reinforced by reference to the bank accounts opened in Taupo (on 15 August 1999) when Mr Allen and Mr Palmer arrived in New Zealand and were driven to Taupo by Mr Buckland. A reconciliation of Mr Palmer’s account disclosed transfers totalling $NZ957,000 into Mr Allen’s account at the same bank. Large cash withdrawals were also made frequently, some being made in the United States at ATM machines in close proximity to Mr Allen’s American residence at a time when the only other person with access to the account, Mr Palmer, was in New Zealand.
[44]	Other large sums paid out of Mr Palmer’s account at Taupo included credit card expenses (NZ$200,000), a deposit on a property acquired by Mr Allen and Mr Palmer at Whenuapai (NZ$200,000), personal expenditure by Mr Palmer ($NZ550,000), the acquisition of a limousine and motor home by Mr Palmer ($NZ125,000) and the purchase of Harley Davidson motor cycles for the personal use of Mr Palmer and Mr Allen ($NZ168,000). Mr Allen was a joint signatory to Mr Palmer’s ANZ Bank account at Taupo.
[45]	The evidence established that Mr Buckland also received pecuniary benefits from invested funds. As Judge Joyce said on sentencing, Mr Buckland

[49]	The Judge admitted the video tape into evidence in a ruling given on 9 March 2004. That evidence was introduced through Mr Walker, a person who attended seminars run by Investors’ International following an introduction to that entity in 1998 or 1999. Mr Walker gave evidence of Mr Palmer speaking at a seminar he attended. He obtained a copy of Dr van Lin’s video tape introduction to the programme.
[50]	Mr Mansfield, for Mr Allen, objected immediately to admission of this evidence on grounds of irrelevance and hearsay. The Judge recorded that the Crown did not intend to adduce the video tape as evidence of the truth of what Dr van Lin had said. Rather, the purpose of the evidence was to provide a foundation for evidence to be given by Mr Dofelmier.
[51]	We are satisfied that the evidence was admissible for the reasons advanced by the Crown. Further, having regard to the Judge’s directions about the way the jury should treat this evidence the prejudicial value did not outweigh its probative value. Those directions are set out in [47] above.

[52]	The email communications in issue involved Mr Palmer and occurred after the alleged commencement date of the conspiracy.
[53]	The Crown case was that the email communications were relevant to Mr Palmer’s intent in relation to his proposed activities in New Zealand. Mr Davison submitted that Mr Allen’s subsequent participation with Ms Mork and Mr Palmer under the name "MAP" and their prior association and meeting through Investors’ International seminars meant that the email communications also had relevance to Mr Allen’s state of mind when participating with Mr Palmer.
[54]	On the other hand, Mr Mansfield submitted that the communications were not evidence against Mr Allen and therefore ought not to have been admitted.
[55]	The Judge ruled that the communications were admissible. His reasons for ruling were given on 18 February 2004. Judge Joyce said:

[56]	Mr Palmer was an alleged conspirator. The emails were exchanged during the period of the alleged conspiracies. The evidence is therefore admissible against each conspirator on the basis of the co-conspirator rule: see R v Buckton [1985] 2 NZLR 257 (CA) and Cross on Evidence at 18.34.
[57]	A firm direction is required from a trial Judge when evidence against one conspirator is adduced against all others. We are satisfied that the direction given by the Judge more than met that obligation. Judge Joyce said:

[59]	During the course of cross examination of a witness called on behalf of Mr Allen (Mr Pene, a Pastor of the Good Fight of Faith Church at Whenuapai), senior counsel for the Crown put to the witness a number of documents that were not in evidence. The material was put to the witness as relevant to his credit.
[60]	The documents included a newspaper article that reported concerns of the Securities Commission in relation to investment schemes of the type promoted and a Press Release issued by the Securities Commission dated 24 July 2000. The present scheme fell within the "Goldrush" rubric. Those documents referred, in less than complimentary terms, to the nature of the scheme.
[61]	The Press Release stated:

[62]	During the course of the trial an electronic system was employed to view documentary exhibits. It is known as the "Verdict" system. The system is controlled by counsel for the Crown who, by typing a document number, has the ability to call up the image of a particular document from within the computer system. That image is then shown on various monitors located in the courtroom. Those monitors display the image to the Judge, counsel, the witness and the jury.
[63]	If cross examination had proceeded without electronic documentation, any document put to a witness that had not been produced in evidence would not be seen by the jury. Mr Mansfield argued that because of the potential prejudice to the accused, through the jury viewing these documents, the Judge ought to have aborted the trial and discharged the jury. At trial, and before us, he relied on s 374(1) of the Act, particularly the ground permitting a Judge to discharge the jury if it is "highly expedient for the ends of justice" to do so.
[64]	The application to discharge the jury was made on 29 March 2004. The Judge ruled on the application on 30 March 2004 providing more detailed reasons for his ruling on 2 April 2004. At [4]-[11] of the ruling the Judge said:

[66]	With respect, Mr Mansfield’s argument on this point is untenable. The record of the evidence given at trial indicates clearly that the relevant documents were on screen for a limited time. It is unlikely that the jury, while concentrating on the oral evidence of Mr Pene, would have had sufficient time to comprehend fully the effect of the article. In any event, the documents were in the public domain and the issues raised in them were well known to the jury by the time Mr Pene gave evidence. Finally, even if some prejudicial effect were assumed, the Judge’s direction to the jury was more than sufficient to deal with it.
[67]	We find in favour of the Crown on this issue, broadly for the reasons given by the Judge.
[68]	It would be preferable, when using a system such as the "Verdict" computer system, to have the technical ability to turn off the jury monitor when a document not produced in evidence is put to a witness. It cannot be beyond modern technological know-how to adapt the system to ensure, as Judge Joyce suggested, that the jury’s screen be turned off when such documents are put. That will avoid this point arising in the future, perhaps in a more difficult situation for the Crown to meet.

[71]	Mr Mansfield submitted that the Judge did not restrict his comment to the fact that Mr Allen had refrained from giving evidence; rather his comment had the effect of undermining the veracity or reliability of evidence given on his behalf by his wife. That submission was based on the Judge’s comment at [96] of his summing up.
[72]	Shorn to its core, Mr Mansfield’s point was that by telling the jury that they might have expected Mr Allen to go into the witness box and recount directly what Mrs Allen sought to tell the jury, the Judge effectively criticised the evidence of Mrs Allen and undermined it.
[73]	We agree with Mr Mansfield that there is no logical connection between an accused refraining from giving evidence and the weight to be given to evidence adduced through another witness about matters on which the accused could have given direct evidence. As long as the other evidence is admissible it is for the jury to determine the weight to be given to it based on their assessment of the witness and its reliability.
[74]	Mr Davison submitted that the Judge was, as a matter of law, entitled to comment more directly on the absence of evidence from Mr Allen. He also noted the need to consider Mrs Allen’s evidence as a whole to understand the message being conveyed to the jury by the Judge. Mr Davison submitted that had the Judge commented to the full extent he was entitled (and might have been expected to comment in the circumstances of the case) the position would have been worse for Mr Allen. In those circumstances he submitted that the comment did not give rise to any miscarriage of justice.
[75]	The circumstances in which a Judge may comment on the election of an accused not to give evidence were discussed in R v McRae (1993) 10 CRNZ 61 (CA), 64-65. Delivering the judgment of this Court, Tipping J said at 64:

[76]	In McRae the Court held that the Judge did not err in making a s 366(1) comment. The Court held that the Judge was entitled to comment for the purpose of drawing to the jury’s attention the fact that evidence called by the Crown, while heavily challenged, had not been contradicted by the accused: at 65.
[77]	Judge Joyce spoke about whether the jury might have expected Mr Allen to respond to the Crown case directly, having regard to the evidence adduced. His comments about the evidence of Mrs Allen should be seen in that limited light. It seems clear that the Judge decided to comment on the basis set out in the passage we highlighted from the quoted extract of McRae: see [75] above.
[78]	The Judge went on to emphasise that the jury must not assume Mr Allen to be guilty because he had not given evidence. He invited the jury to assess the strength of the evidence against Mr Allen. Finally, in that particular section of the summing up, Judge Joyce reinforced the "fundamental principle" that an accused has no obligation to give evidence and that, by electing not to give evidence, an accused does not relieve the Crown of its obligation to prove the case beyond reasonable doubt.
[79]	We are satisfied that, when read as a whole in the context of a lengthy summing up, the jury would not have been misled about the way they should evaluate evidence given by Mrs Allen. We are acutely aware that, in a case such as this (which had been the subject of evidence over almost two months) it would be inappropriate to subject the summing up to minute analysis. A jury listening to a lengthy summing up will be influenced by the general tenor of the Judge’s remarks rather than by particular sentences taken out of context. In this case, the fact that Mr Allen was not required to give evidence was emphasised by the Judge. The way in which he dealt with Mrs Allen’s evidence was not the subject of undue emphasis by comparison.
[80]	While it would have been preferable for the Judge to have expressed his comment along the lines suggested in McRae, we are satisfied that there has been no error by the Judge amounting to a miscarriage of justice. For that reason, this ground of appeal also fails.

[81]	Mr Buckland contended that his conviction ought to be set aside by reason of counsel error. The law is clear: any error by trial counsel must be of a type properly characterised as "radical". Only if an error of that character were established will the Court consider the possibility of setting aside a conviction.
[82]	The applicable principles are well known. It is sufficient, for present purposes, to refer to R v Pointon [1985] 1 NZLR 109 (CA) and R v S [1998] 3 NZLR 392 (CA) and R v Momo (CA115/02, 23 July 2002). In Momo, at [14] the point was put as follows:

[83]	Experience suggests that many complaints of counsel error are based on retrospective analysis of the wisdom of taking a particular course of action rather than whether the action was agreed at the relevant time.
[84]	There are conflicting affidavits from Mr Buckland and the two counsel who represented him at trial. We cannot resolve the conflicts on the affidavits. There was no application for leave to cross examine on the affidavits filed. Nor were we provided with affidavits from proposed witnesses.
[85]	Many of the complaints made by Mr Buckland are irrelevant to the ultimate verdict to convict. Mr Niven accepted that the real issue was an alleged failure to call character witnesses on behalf of Mr Buckland. Mr Buckland says that he gave instructions for that to be done. Counsel representing Mr Buckland accept that those matters were raised by him. They say that the issue was discussed and senior counsel asserts that he used his judgment in determining not to call that evidence because he considered Mr Buckland had made an adequate impression in the witness box and that "parading" a number of character witnesses at the end of a long trial might be counter-productive. Senior counsel at trial deposed that Mr Buckland concurred in that view. Certainly there is no evidence from Mr Buckland suggesting that he objected either before or after his counsel closed his case.
[86]	The explanation given by counsel for not calling character witnesses is plausible and, in the context of the present trial, reasonable.
[87]	However, there is a more fundamental point. Mr Buckland’s prior good character and reputation was already before the Court. The Crown case relied on that character as part of the scheme for inducing investors to feel confident in it. It is difficult to see how defence evidence to the same effect as the Crown’s proposition could have advanced the appellant’s case on that issue.
[88]	In any event there was no evidence before this Court as to what specifically the possible witnesses might say. It takes more than bare assertions or speculation by an appellant as to what a possible witness might have said at trial before an appellate Court ought be disposed to thinking that a miscarriage of justice might have been occasioned by the omission to call any potential witness. It is usual for potential witnesses in such circumstances to have deposed, by affidavit, what the evidence is that they would have given before a trial Court. Mr Niven requested time to take instructions on whether an adjournment should be sought in order to obtain affidavits. We declined the application. It was much too belated and still remained speculative. This ground of appeal fails also.

[89]	Mr Allen’s appeal is based on manifest excess, coupled with the suggestion that the Judge ought not to have imposed a cumulative sentence on the charge of using a document with intent to obtain a pecuniary advantage.
[90]	The two frauds were of a different character. Mr Allen’s conviction on the conspiracy charge shows that the jury accepted beyond reasonable doubt that Mr Allen intended to defraud members of the public and received significant personal benefit as a result. The charge of using a document with intent to obtain a pecuniary advantage was a fraud on the ASB Bank carried out at a time when Mr Allen knew he was in financial difficulties while the amount was large ($NZ1.2million), ultimately the bank did not suffer a loss. Further, the bank fraud occurred outside the period of the conspiracy.
[91]	The differences between the two frauds, in terms of kind and timing, satisfy us that a cumulative sentence was appropriate. Certainly we have not been satisfied that this was an inappropriate response to the offending. Section 84 of the Sentencing Act provides guidance on the circumstances in which a cumulative sentence is appropriate:

[92]	We regard the sentence of 4 years 3 months imprisonment on the conspiracy charge as, if anything, lenient. The nature of the fraud and the many millions of dollars stolen from investors and appropriated for alternative purposes puts the offending at the high end of the scale for offending of its type. Under the Sentencing Act (s 8(1)(b) and (d)) that entitled the Court to impose the maximum penalty or a penalty close to the maximum available.
[93]	Also, the fraud on the bank was serious. It was premeditated. While the bank suffered no loss that does not affect the seriousness of the offending. Ultimately, the lack of any loss was fortuitous. A sentence of 21 months imprisonment on a charge carrying a maximum of 7 years imprisonment cannot be characterised as manifestly excessive.
[94]	We emphasise the need for sentences that denounce conduct and are designed to deter in cases such as the present. As this Court has previously observed, sentences ought not to be pitched at a level which provide an economic incentive for people to breach the criminal law: cf R v Conway (CA234/04, 8 November 2004) at [76].
[95]	Finally, the total sentence of 6 years imprisonment was not manifestly excessive having regard to the nature of the frauds we have described and their premeditated perpetration.

[96]	Mr Buckland’s role was assessed by the Judge to be the same as Mr and Mrs Christie. They have abandoned their appeal against the same sentence.
[97]	Mr Niven pointed to various aspects in the evidence suggesting that Mr Buckland ought to have been treated more leniently than Mr and Mrs Christie.
[98]	It was open to the Judge to proceed on the basis suggested by Mr Niven, but he did not. He made it very clear in his sentencing remarks that Mr Buckland received substantial sums. He was described by the Judge as "an unabashed salesman for the enterprise". Notwithstanding his age (60 years) and the fact that he had no prior convictions, the Judge took the view that he ought to be equated to Mr and Mrs Christie, two people in their mid 40s with no previous convictions.
[99]	The Judge who presided over this lengthy trial was in a much better position to assess relative culpability than we are. There is no basis for us to interfere with his assessment. The sentences imposed on Mr Buckland and the Christies were within the range available to the Judge. Accordingly, Mr Buckland’s appeal must fail, both in respect of manifest excess and disparity