A former Mighty River Power engineer has been jailed for deceiving his employer in a scheme that was motivated by greed.
Paul Kenneth Rose and his former wife, Jane Clare Rose, shared a dock at the High Court in Auckland, where Justice Edwards sentenced them to three years and two months jail, and nine months home detention respectively.
The pair were found guilty of charges of obtaining by deception following a jury trial in March.
Paul Rose was a long-standing employee of Mighty River and worked as an electrical engineer, buying parts for the then publicly owned power station in Penrose.
He was described by some of his colleagues as the "go-to guy" when it came to fixing problems at the power station.
But secretly, Rose set up companies which he used to buy the parts, despite his contract requiring him to reveal conflicts of interest.
He then inflated some of the prices before on-selling them to Mighty River.
In total, his companies billed Mighty River $2.2 million for parts and services over 174 invoices.
He kept his name off all the company documents, and used his former partners' names. At one point even asked his mother to become a director.
His wife, Jane Rose, managed one of the companies and even used a false name to hide her connection to her husband.
The Rose scheme was uncovered by a fellow colleague when he started investigating the company's maintenance history.
Today Rose's lawyer Rachel Reed said her client had not been found guilty of taking money from Mighty River but said it was a deception fraud which prevented Mighty River from being able to know who exactly they were dealing with.
She said Rose had lost everything - his job, his relationship and his assets had been frozen. However, she said he had been able to rebuild his life and was in a new relationship.
Lawyer Matt Goodwin represented Jane Rose and said Mighty River got good service from the Roses.
He said his client was only a party to the offending and was able to undercut competitors. In one case she saved Mighty River $7000 on a part. He said her offending was more akin to benefit fraud where a beneficiary fails to disclose a relationship to WINZ.
In sentencing, Justice Edwards said she found Paul Rose to be the principal offender.
She said victim impact statements from Mighty River managers, one of whom counted Paul Rose as a personal friend, spoke of frustration, anger and a betrayal of the special bond they had. Another manager said it brought all the work achieved by Mighty River into disrepute and created a climate of mistrust in the workplace.
Justice Edwards said Rose's failure to disclose his connection to his companies resulted in a deception.
Crown prosecutor Nick Williams said the losses to Mighty River were between $200,000 and $800,000 but Justice Edwards said she could not conclude, beyond reasonable doubt, just what the losses to Mighty River had been.
She said she could not be sure that Mighty River would not have bought the goods and services from another company and she could not be sure the mark-up on some of the products was well above market rates.
The judge said there was also evidence that Mighty River owed Rose's companies $143,000 for parts and that had to be taken into account. She said Mighty River could pursue a claim for losses in the civil courts and declined to make a reparation order.
But Justice Edwards said there had been a benefit to Rose, totalling over $600,000. She said this money was spent on the Rose's lifestyle - at bars and restaurants and was also used to pay a deposit on a house.
She said Rose's scheme had been motivated by greed.
Justice Edwards took time off his sentence for his involvement in his local football club and his family circumstances that included being a father to four children. She also made a small reduction for remorse.
In sentencing Jane Rose, Justice Edwards said the mother of three had lost her job in sales after media attention on the case.
The judge said in contrast to Paul Rose, she found Jane Rose's remorse genuine and took time off her sentence.
The Crown has sought court orders to freeze Paul Rose's assets.
In a statement to the media, the Serious Fraud Office director Julie Read said they were pleased with the outcome.
"Mighty River Power is a significant contributor to the New Zealand economy and the SFO places a great deal of importance on our contribution to maintaining the reputation of New Zealand as a safe place to do business."