High-flying fraudster Gavin Clifford Bennett spent $A900,000 (NZ$1.16 million) on "regular payments to various female companions", according to the Serious Fraud Office (SFO).
The SFO detailed the former Datasouth Finance Ltd director's spending after he pleaded guilty to six charges of dishonestly using documents, and two charges of false accounting today.
The six charges involve $23 million in fraud against South Canterbury Finance (SCF). The charges relate to 894 false transactions.
Bennett was placed straight into custody after admitting the charges in the Christchurch District Court.
The SFO presented a summary to the court, showing expenses listed in his bank statements and credit card statements.
The expenses included the rental for two luxury residential apartments in The Rocks, Sydney of $A463,000, and regular payments to various female companions of $A900,000.
Other costs included international air travel for himself and various companions totalling $A161,000, including to Argentina, New York, Hong Kong, Las Vegas, Paris, and London.
He also purchased Louis Vuitton, Cartier and Chanel clothing, totalling $A163,000.
Judge Oke Blaikie remanded the 54-year-old Christchurch man in custody for a Crown sentencing on May 3 because of the "magnitude" of his offending.
The fraud was a Ponzi scheme where Bennett had SCF provide funds for false customers who were supposedly taking up IT services and hardware.
The scheme was kept going for six years by Bennett making scheduled repayments as further false leases provided more finance.
Serious Fraud Office (SFO) prosecutor Catherine Butchard said the SFO was opposing bail pending sentence, but defence counsel Carol Morgan asked for bail for Bennett because he had surrendered his passport and posed no flight risk.
He had returned to New Zealand to face the matters, and had co-operated with the inquiry. He was a first offender, apart from one traffic conviction. But Judge Blaikie refused bail because of the size of the fraud.
He asked for a pre-sentence report to consider Bennett's suitability for home detention to that "all options" could be considered.
Bennett established a business that became known as Datasouth in 1993. It comprised several companies which included Datasouth Finance Ltd.
The company leased IT hardware and the purchase of the equipment to be leased was financed initially by SCF.
Customers would enter an equipment rental agreement and mostly the IT hardware would be leased by the customer for 36 months at an agreed interest rate.
Datasouth Finance would submit copies of the equipment rental and individual assignment agreements to SCF which would then approve the loan - or not - and advance the money.
Crown prosecutor Catherine Butchard said: "During the period from April 1, 2011, to March 31, 2011, the defendant (Bennett) created false equipment rental agreements and individual assignment agreements using details of genuine customers to obtain funds dishonestly from South Canterbury Finance."
Similar offending processes were used by Bennett at least 894 times over those six years.
"To cover up the offending the defendant would make scheduled repayments on false leases using funds obtained from subsequent false leases in a manner similar to a Ponzi scheme."
The amount involved in the offending was about $65 million with a total loss to SCF of $23 million.
"In this regard a civil judgment debt has been entered against the defendant in the sum of $23 million," Butchard said.
In 2008, SCF was approved to become covered by the Government Guarantee Scheme. When SCF went into liquidation the Government committed $1.6 billion to reimburse losses incurred by investors of SCF.
"The loss to SCF as a consequence of the defendant's offending is at least $23 million, which is a loss that will ultimately be borne by the New Zealand taxpayer," said Butchard.
Between April 2005 and March 2011, about $7.8 million was paid either to personal New Zealand and Australian bank accounts controlled by Bennett or applied to business credit cards that he used for personal expenses.
The SFO has accepted that a small proportion of the $7.8 million could be attributed to business related expenses.
Datasouth went into liquidation in March 2011 and 42 staff lost their jobs.
Bennett made an unexpected appearance at court today to enter his guilty pleas. He had been scheduled for a post-committal conference on the charges later this month, as though the case was heading for trial.