Jail term for disgraced lawyer and 'consummate thief and liar'

Disgraced and bankrupt former Dunedin lawyer John David Milne has been sentenced to eight years and one month's jail for stealing $2.8 million of entrusted funds.

Over 21 years, Milne (79) targeted 35 mainly southern, vulnerable and elderly investors to fund his comfortable lifestyle, in one of the longest-running frauds in New Zealand history.

About $2 million was never recovered.

Milne was described at sentencing in the Christchurch District Court yesterday as ''predatory'' and a ''consummate thief and liar'', by the Serious Fraud Office's legal counsel, Rachael Reed.

Judge Jane Farish was asked by Milne's counsel to take into account his age, but she declined, as Milne was being given credit for his previous good character, and his albeit late guilty plea on the morning his trial was to begin.

''Thank you, your Honour,'' Milne said when being led into custody.

While paying some old clients from new investors' cash - which is how a Ponzi scheme operates - Milne never made any actual investments on behalf of his 35 clients.

They unwittingly gave sums ranging from $10,000, to one client who handed over more than $1 million - cash that for some had been set aside for their funerals or promised to grandchildren to fund university studies.

With Milne bankrupt since October 2012, there will be no reparations to victims.

Milne pleaded guilty to 34 charges in October.

The charges, which included theft by a person in special relationship, between 1991 and 2012, were laid by the SFO.

SFO director Julie Read said after the sentencing that despite the successful prosecution, the SFO remained concerned for Milne's victims ''for whom it is too late for many to recover from the impact of his dishonesty''.

Milne's frauds started when he was practising in Dunedin, and included friends and family.

When his 1960-established sole practice was sold in 2008, he began working in a Christchurch branch office of the buyer, until his employment ceased in June 2012, when his fraud began to unravel.

The SFO noted when laying the charges a ''sad fact'' of the case was that a significant number of Milne's clients were ''elderly and vulnerable people, often widows living alone''.

Following 21 years of deception, Milne became a self-declared bankrupt, was disbarred and found guilty on four counts of misconduct by the New Zealand Lawyers and Conveyancers Disciplinary Tribunal, in April last year.

Other than handwritten receipts between Milne and some clients, Law Society inspectors found there was no paper trail which showed he had invested the funds received, either in receipts of any interest payments or by lending to a third party.

Milne's deception was only uncovered following complaints from clients, during 2012, which prompted the subsequent Law Society investigation.

The four misconduct charges relate to 15, 20, 11 and nine clients in four time frames from 2002 to mid-2012.

A prosecutor for the Law Society noted during Milne's hearing that his personal bank accounts disclosed ''only personal use of the funds, not any loans, repayments, nor interest payments involving third-party borrowers''.

The Law Society tribunal said in its decision: ''This has been a gross breach of trust by Mr Milne, with dire financial consequences for those who gave him their money, many of them at a stage in their life where financial security is especially important''.

simon.hartley@odt.co.nz

- Additional reporting NZME

 

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