Jonathan Beau Hall Photo: RNZ / Natalie Akoorie
Jonathan Beau Hall was not qualified to sign off engineering designs for 946 properties around the country but he did it anyway, forging the signatures of two chartered professional engineers.
Now, the engineering technologist has been sent to jail for the fraud which a judge has called the "largest scale forgery by a professional person" he was aware of.
Hall, 47, pleaded guilty to 112 counts of forgery, including 47 representative charges, in the Taupō District Court in November and on Friday he came face-to-face with three of his victims during sentencing in the Rotorua District Court.
The fraud was uncovered in May last year after allegations were made to Engineering New Zealand that Hall had used his supervising engineer's Licensed Building Practitioner's registration number without the man's consent, to fraudulently sign producer statements and other documents before submitting them to council.
The fraud began in November 2017 when Hall was the director of Kodiak Consulting in Taupō. It only stopped when Hall was caught.
At first he forged the signature and used the company name and LBP registration number of a supervising engineer until the man retired after which Hall found another supervisor, whose signature looked nothing like the one Hall would provide in further forged documents.
It was picked up by Rotorua Lakes Council when staff contacted that supervising engineer to ask about the project and he had no memory of it.
The man complained to Engineering New Zealand, police were notified and an investigation found 39 affected councils and hundreds of victims whose homes no longer met the Building Code.
Instead, a note had to be added to their Land Information Memorandum (LIM), which cannot be removed unless the owner has the design or error corrected at their own expense.
An investigation found 39 affected councils and hundreds of victims whose homes no longer met the Building Code (file image). Photo: Supplied/ Dan Bailey
One issue identified included a significant structural engineering defect in a multi-unit building that required an entire engineering redesign.
In total there were 1927 fraudulent documents over almost six years including geotechnical reports, certificates of design and producer statements.
In Taupō alone - where Hall was based - 650 building consents were affected, Taupō District Council building manager Dean Southey told the court.
Of those, 187 were under construction when the council was forced to issue stop-work notices.
"As some of the construction work was quite advanced the impact on this group was particularly severe."
Independent engineering reviews were required, with some construction work taken apart, Southey said.
It led to significant delays, financial pressures and stress on those affected.
Southey said the LIM notes, which detailed the fraud, also caused distress to homeowners.
"For many the affected buildings, this is their family home. It has the potential to significantly impact the value of their asset."
He said the council's investigation and dealing with the fraud had cost ratepayers more than $500,000.
There were also reputational consequences and construction industry flow-on effects with some families wanting to sell their partially completed homes and move to Australia to get away from the stress of the situation.
Southey said the council was working through resolving the issues and had done so for 150 of the projects where construction was halted.
Homeowner Dr Martin Atkins said the extra cost to correct Hall's sub-standard work on his house build had cost his family $40,000, as well as causing them considerable anxiety over the delay in completion.
Atkins, a senior lecturer at the University of Waikato's school of engineering where he teaches engineering ethics, said "Mr Hall's actions rank among the most egregious examples of professional misconduct I have encountered in recent years.
"His behaviour persisted over a long period and was not only widespread but also executed with the full understanding of the potential catastrophic consequences due to his lack of competence and proper qualifications."
He said the offending was extreme and asked the judge to deliver a custodial sentence to deter other engineers from similar conduct.
Retired homeowner Mike Timmer had two renovations affected with one that would cost him $32,775, and he hoped the judge would order the maximum penalty.
He also wanted Hall to pay back the money the fraud had cost him.
Hall estimated the cost of the fraud to victims was $558,000 but in total he billed $2.4 million for the questionable work and Crown prosecutor Amanda Gordon said there was an element of greed involved.
One of the engineers whose identity was fraudulently used by Hall had left New Zealand because of the fraud and had suffered a personal financial cost of $300,000.
Hall had built up a reputation as an engineer who could get work done quickly and inexpensively, which the forgeries enabled him to do.
At one point he was offering geotechnical reports for between $1600 and $2500 instead of the industry standard between $2500 and $4000.
Gordon said the offending was repetitive and premeditated and that Hall only co-operated once he was caught.
She said Hall had offered a "paltry" $85,000 in reparation and she argued he had reckless disregard for the law, public safety and industry standards which had an impact on a much boarder group of people because it eroded confidence in the building process.
Defence counsel Matthew Ward-Johnson said his client, supported in court by family members and his pastor, had expressed remorse, deep shame and a written an apology to his victims.
Ward-Johnson said Hall's remorse was genuine, he had co-operated at the first opportunity to help identify impacted properties and pleaded guilty at the first chance.
He said Hall had a low self-esteem and was in a "self-perpetuating and self-defeating" cycle when he undertook the offending which was "not sophisticated".
During the offending Hall donated more than $300,000 to charity, including $270,000 to his church where he was on the board.
However, Judge Greg Hollister-Jones said donating that money would have given Hall a degree of satisfaction which made the acts neutral, rather than mitigating factors in sentencing.
"To one fraudster, a lavish lifestyle, overseas trips, jewellery - the five-star lifestyle- gives pleasure, makes them feel better," the judge said.
"To another fraudster you feel the benefit from being a significant benefactor."
Judge Hollister-Jones went through a number of victim impact statements noting the financial loss and emotional harm suffered by victims.
Thames Coromandel District Council said it relied on the producer statements in good faith and the council had spent hours and hired extra staff to deal with the fraud.
"It strikes at the very core of our organisation's reputation and integrity."
Judge Hollister-Jones agreed Hall's dishonesty offending was repetitive and premeditated and said its huge scale was a seriously aggravating feature.
"There's a serious breach of trust involved here."
He believed the true number of victims to be 1000 and the real cost of the fraud in the millions.
The judge said Hall offered professional services beyond his scope to unsuspecting victims, many of whom now faced insurance implications because they did not have valid code compliance.
"The stress of all this is illustrated by the victim impact statements I have referred to.
The judge adopted a starting point of nine years in jail and gave discounts for co-operation, prior good character, and reparation.
"My view in a case of this seriousness the total discount should not exceed 50 percent."
He sentenced Hall to four and a half years in jail and ordered reparation of $85,758.
Engineering New Zealand chief executive Richard Templer said the range of concerns was extensive, from potentially minor or administrative to more serious such as the robustness of a building's foundations.
"Identifying the unique ramifications on each property will continue to occupy many councils and engineers for some time yet, even before considering remediation."
Templer said Hall's actions had undermined the trust and confidence in the engineering profession and building consent system.
He described the scale of the fraud as "alarming in its magnitude".
"We hope Mr Hall can reflect and learn from his actions, from what became and continues to be a serious, nationwide issue."