The�Hamilton accountant who admitted stealing more than $4 million from a family trust may have stolen millions more, but has destroyed documents that could unravel the full extent of one of Waikato's biggest frauds.
Gary William Soffe, 52, siphoned millions from the trust to fund a showy lifestyle, capped with a sprawling mansion he built on the outskirts of Hamilton.
Soffe spared no expense on fitting out the Tamahere property - trappings included a pool, hydro-slide, astro-turf tennis court and $80,000 sound system - but in the end his excesses proved his downfall.
The IRD began investigating why his assets far outweighed his income, and Soffe's house of cards came crashing down.
Soffe pleaded guilty this week�to nine charges of theft by a person in a special relationship, and one of false accounting dating back to 2006 when he appeared in the Hamilton District Court last week.
But the Sunday Star-Times reported today it�understands the $4m covered by the charges is just the tip of the iceberg. Soffe was the sole administrator of the trust going back to the 1990s - with one elderly trustee, who had little to do with running it - and began building up his own property portfolio in the early 2000s.
Don Shirley, a director of law firm McCaw Lewis, which acts for the trust, said the firm's forensic investigation had been made difficult by the "unavailability" of trust accounts preceding April 1, 2006. He said Soffe admitted destroying documents.
The Star-Times understands he may have been doing so until recently. Prospective buyers who visited his mansion with a real estate agent noticed files from a box marked "trust 2" were being burnt in an outdoor fireplace.
Meanwhile, questions are being asked about McCaw Lewis's handling of the case, after it waited more than three months to notify police of the fraud.
Police were only told about it�the week before last.
McCaw Lewis is believed to have confronted Soffe about the thefts in early February, and he confessed. The firm then held a meeting with Soffe and his lawyer to discuss a reparation plan.
Over the next couple of months, property with a combined rateable value of well over $6m was handed back to the trust and is now on the market, including the Tamahere home, a beach house in Whangamata, an apartment in Mt Maunganui and a commercial building in Auckland.
The Institute of Chartered Accountants was notified of the fraud in April and suspended Soffe, prohibiting him from holding himself out as a chartered accountant, but still police were not told.
The Star-Times�said the sole heir to the fortune, an elderly Wellington woman, wanted to avoid the publicity of criminal charges. Her family's name has been suppressed. The trust owns tens of millions of dollars worth of farms and commercial property in Waikato and Auckland, and also has a charitable arm.
Asked why McCaw Lewis took so long to notify police, Shirley said: "We act for the victim, that's where our commitment is.
"We carried out a very detailed forensic report, and that took time."
Shirley confirmed the trust would keep all the proceeds of the sale of Soffe's properties, but could not put a figure on the total it was hoping to recoup. It is understood the firm was not aware that Soffe had other luxury assets, such as a boat kept at Whangamata.
Sources said last week he also kept a boat in Fiji. He continues to live in the Tamahere mansion while awaiting sentencing in July.
Trust expert John Brown said the Soffe case was a warning to trustees that they should not delegate their responsibilities to another trustee. "Often family trusts are run very casually, but there is a need for trustees to keep a watchful eye. It's important that each trustee is actively involved.
"You shouldn't just be leaving it to the other parties."
Peter Preece, a senior forensic accountant with the police's financial crime unit, said two common themes with accountants who committed fraud was that they did so over a long period, sometimes more than a decade, and they had a high rate of reoffending.
"They don't get picked up, that's the thing. Basically, the clients don't know they've been defrauded, or often don't even believe they've been defrauded.
"If you say to them, `He's pinched your tax refund', they say `No, he couldn't have, I've known him for 20 years'."
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Source: http://tvnz.co.nz/national-news/accountant-stole-millions-may-have-hidden-more-4196469?ref=rss
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