Farm fraudster goes to prison

The Feilding District Court sentenced on March 19, 2012 a farmer to a prison term of two years and three months on a number of fraud-related charges.

Peter Joseph Nitschke (32) was found guilty in January 2012 of seven fraud charges totalling $2.3 million. The charges followed a Serious Fraud Office (SFO) investigation into Capehorn Farming Company Limited (Capehorn).

Capehorn operated a beef cattle fattening farming business in the central and lower regions of the North Island, in which cattle purchases were generally financed through specialist livestock finance companies.

In early 2010, Mr Nitschke obtained over $880,000 worth of finance from lenders for cattle that did not exist. Mr Nitschke also fraudulently sought $1.5 million in refinancing from the BNZ in order to repay loans for the non-existent cattle and for cattle that had already been sold.

Profits were earned on the difference between the cost of purchasing cattle and the proceeds received from selling the cattle in the future.

Due to falling beef prices in late 2009 and 2010, it is understood that Capehorn found it increasingly difficult to maintain on-going bill payment commitments. The company’s financial difficulties did not improve and by December 2010, it was placed into receivership by the BNZ and PricewaterhouseCoopers were appointed as receivers.

The matter was referred to the SFO in March 2011.

SFO Director Adam Feeley said the sentence would send a strong message regarding the seriousness with which financial crime is viewed.

“It should be apparent from this sentence that those committing any form of serious financial crime can expect to be held account with a sentence of commensurate severity,” he said.

Source: Serious Fraud Office Press Release

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