The final person to be sentenced over a pokie machine fraud in the Nelson region has escaped a jail term and will instead serve 12 months' home detention.
(from left) Paul Max, Kevin Coffey and Michael O'Brien have been found guilty of a multi-million-dollar pokie machine fraud. Photo: Skara Bohny
Paul Max, 60, was sentenced in the High Court in Wellington, having earlier been found guilty of three charges of obtaining by deception.
He helped mislead gambling regulators by concealing the involvement of Mike O'Brien, the lead player in the fraud, with venues that operated pokie machines.
An earlier investigation by gambling regulators from the Department of Internal Affairs had deemed O'Brien unsuitable to be involved in the industry.
His involvement in the pokie machine fraud had resulted in him taking millions of dollars in backhanders from racing clubs who paid him to ensure they received grants from the trust running the machines.
Earlier this month O'Brien was jailed for four-and-a-half years for his involvement with the fraud.
Justice Dobson said today the gambling licensing and monitoring system cannot function if regulators are deceived about who is involved and Max was fooling himself if he thought his offending was minor.
"Whether you agreed with the Department of Internal Affairs that Michael O'Brien was suitable to be involved is beside the point.
"The course of your conduct struck at the heart of the regulatory regime by hiding Michael O'Brien's interests in a significant number of class 4 venues."
Crown Prosecutor Grant Burston said the case was one of deliberate deception of the gambling regulator and suggested a sentence starting point of three-and-a-half years to three years, nine months.
"[Max's actions] allowed Michael O'Brien to have an ongoing material influence in how the bars were operated when he and Mr Max knew the DIA considered him unsuitable for the role."
However Max's lawyer, Marc Corlett QC, said his client knew nothing of the money Michael O'Brien made from the racing clubs.
"The key factor in Mr O'Brien's offending was that he had control of the trust, which Mr Max had nothing to do with."
"[Max's involvement] is far more comparable to Mr Coffey [the third person convicted of involvement in the fraud] in that he was something of a bit player in a scheme that he really knew very little about."
Mr Corlett pointed to Max's status as a first offender who had long enjoyed a good reputation in the Nelson community and suggested the sentence should be home detention.
"There is no useful purpose in sending somebody of his character and background to prison, ... bearing in mind he's been found to be at low risk of reoffending."
Justice Dobson accepted Max had played a lesser role in the offending and agreed there was a need for parity with Coffey, who was sentenced to serve one year of home detention.
"The [pre-sentence] report writer emphasises the lack of any financial gain from the offending and your preparedness to engage in courses that will further reduce the prospect of reoffending."
"[They] observe that you are shattered by your experience, and in particular the remand in custody since entry of the convictions."
Justice Dobson ordered Max to undergo any counselling suggested by his probation officer.