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Former production manager convicted of fraud for selling Peter Jackson’s vintage aircraft

News from Serious Fraud Office
The former production manager of an aircraft manufacturer, The Vintage Aviator Limited (TVAL), has been convicted of fraud on charges brought by the Serious Fraud Office.

A jury found Eugene John DeMarco (57) guilty today of six counts of fraud at the conclusion of his High Court trial in Wellington. Mr DeMarco was convicted of ‘Theft by person in a special relationship’ and ‘Obtaining by deception’ in relation to the sale of three reproduction vintage aircraft to the New Zealand Warbirds Association Inc. He was convicted of ‘Theft by person in a special relationship’ in relation to a BE2e aircraft, owned by TVAL. He was also found guilty of ‘Theft by person in a special relationship’ and ‘Obtaining by Deception’ in relation to the unauthorised use of another vintage aircraft, a P-40, as security to obtain a loan.

Mr DeMarco committed the frauds while he was employed by TVAL, a company owned by Sir Peter Jackson and Dame Fran Walsh. He broke the law on several counts to rid himself of a debt of more than $1 million he owed to a trust controlled by Mr Jackson and Ms Walsh. The purpose of the loan, which was expected to be a short-term one, was to assist the defendant gain full ownership of a company he co-owned.

The Director of the SFO, Julie Read, said, “Mr DeMarco defrauded his employer, a charitable organisation, a friend and a bank. His offending was premediated and driven by self-interest. The prosecution of such matters is an important aspect of protecting New Zealand’s reputation as a safe place to invest and do business.”

Mr DeMarco is scheduled to reappear for sentencing at the High Court in Wellington on 31 October.

Background information
Eugene John DeMarco (57) is a United States citizen and New Zealand resident.
The Vintage Aviator Limited is a Wellington-based company that manufactures reproductions of First World War era aircraft. Sir Peter Jackson and Fran Walsh own the company.

Crimes Act offences

Section 220 Theft by person in special relationship
(1) This section applies to any person who has received or is in possession of, or has control over, any property on terms or in circumstances that the person knows require the person—
(a) to account to any other person for the property, or for any proceeds arising from the property; or
(b) to deal with the property, or any proceeds arising from the property, in accordance with the requirements of any other person.
(2) Every one to whom subsection (1) applies commits theft who intentionally fails to account to the other person as so required or intentionally deals with the property, or any proceeds of the property, otherwise than in accordance with those requirements.
(3) This section applies whether or not the person was required to deliver over the identical property received or in the person’s possession or control.
(4) For the purposes of subsection (1), it is a question of law whether the circumstances required any person to account or to act in accordance with any requirements.

Section 240 Obtaining by deception or causing loss by deception
(1) Every one is guilty of obtaining by deception or causing loss by deception who, by any deception and without claim of right,—
(a) obtains ownership or possession of, or control over, any property, or any privilege, service, pecuniary advantage, benefit, or valuable consideration, directly or indirectly; or
(b) in incurring any debt or liability, obtains credit; or
(c) induces or causes any other person to deliver over, execute, make, accept, endorse, destroy, or alter any document or thing capable of being used to derive a pecuniary advantage; or
(d) causes loss to any other person.

(1A) Every person is liable to imprisonment for a term not exceeding 3 years who, without reasonable excuse, sells, transfers, or otherwise makes available any document or thing capable of being used to derive a pecuniary advantage knowing that, by deception and without claim of right, the document or thing was, or was caused to be, delivered, executed, made, accepted, endorsed, or altered.

(2) In this section, deception means—
(a) a false representation, whether oral, documentary, or by conduct, where the person making the representation intends to deceive any other person and—
(i) knows that it is false in a material particular; or
(ii) is reckless as to whether it is false in a material particular; or
(b) an omission to disclose a material particular, with intent to deceive any person, in circumstances where there is a duty to disclose it; or
(c) a fraudulent device, trick, or stratagem used with intent to deceive any person.

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