Exclusive: The Investigators NZ Reveal Brothers’ $150,000 Stock Car Funding Thefts
March 1, 2024 | Fraud, Business Crime
Two brothers misappropriated nearly $150,000 from their place of employment, to support their racing hobby, claiming that they were indirectly promoting their employer since the company's name was featured on their racing vehicles.
In the Taupō District Court, Mark and Steven Flower faced sentences after admitting to a single count each of theft by person in a special relationship, a crime that carries a maximum sentence of seven years in jail.
Mark Flower was found to have taken $100,000 from HJ Asmuss & Co Taupō and received a sentence of nine months' home detention.
His brother, Steven Flower, was accountable for misappropriating $48,000 and was sentenced to six months of community detention, which included a curfew from 7am to 7pm, along with 150 hours of community service. They were both ordered to pay restitution in the amounts of $100,000 and $48,000, respectively.
The judge pointed out that the crux of the matter involved a longstanding employee who manipulated the company's computer system to fund his racing hobby. Morgan also mentioned that his client had held a belief, albeit mistaken, that he would eventually become a co-owner of the company.
Morgan acknowledged that his client's new venture did compete with Asmuss, albeit in a limited capacity, and firmly denied any allegations that the thefts dated back to 2013 or that the stolen funds were used to establish a competing business. He highlighted the significant impact a prison sentence would have on his client, who was once well-respected in the community, and the resultant loss of reputation.
The discovery of the theft in 2021 followed the detection of unusual transactions, according to Judge Paul, who remarked that the theft was motivated by the desire to indulge in the stock car hobby at no expense. He noted that, while the case involved substantial theft, the company had been fully compensated, which is often not the outcome in similar cases.
As for Mark Flower, his lawyer, Mark Jepson, pointed out that the primary distinction in his case was the amount stolen. Judge Paul found the nature of the theft similar in both cases, including the erroneous belief of becoming a company shareholder. He emphasised the significance of the $100,000 theft as a substantial crime.
The background information revealed that Asmuss Group, established in 1920, is a key supplier for many significant industrial and construction endeavors in the country. An independent review in 2021 uncovered irregular transactions, leading to an inquiry by the company's CFO. Steven Flower admitted to improperly processing work orders, influenced by the stress of meeting revenue targets.
A forensic accountant's investigation from May 2019 to December 2021 uncovered a $152,000 discrepancy across all work orders, with purchases related to racing, including automotive parts and personal items like a high-end watch and a GPS camera, misrepresented as business expenses.
Dean Brown, Asmuss CEO, expressed his profound disappointment, emphasising the betrayal by trusted employees. He refuted the Flowers' claim of anticipated shareholding, and mentioned the financial loss despite reparation, owing to forensic accounting and private investigator costs.
Brown cautioned other businesses about the potential betrayal by trusted employees, underscoring the absence of winners in such situations.
