Restauranteur fights to clear name

Michael Colosimo says it wasn't his fault the new owners of the Kestrel went broke. Photo: Chris McKeen/Stuff.

Michael Santo Colosimo has been described as a conman and a crook.

Another interpretation is that he’s exactly what you’d expect of an Italian-blooded foodie from Australia - loud and extremely passionate.

His voice rises to a shout and he stabs the air with his finger when he describes how he was "f.... over" by the legal system.

In 2011, Colosimo was sentenced to two-and-a-half years’ imprisonment for forging a financial statement for his Kestrel at the Landing floating restaurant in Tauranga.

The Crown alleged the restaurant, on the 100-year-old former Auckland ferry, was "haemorrhaging" money and he exaggerated its profitability so he could sell it.

Within a year the business had gone under and the new owners ended up losing their house.

​Colosimo, 55, remains adamant he had nothing to do with creating the statement and claims the evidence pointed to his former operations manager.

The jury preferred the Crown’s version and the former king of Tauranga’s bar scene found himself working for $19 a week in Waikeria Prison’s administration block.

He was released after 13 months, still maintaining his innocence before the Parole Board.

As if to prove the Kestrel was cursed, it sank at its new mooring on the Auckland waterfront in 2016.

Colosimo estimates he and his family have spent upwards of $100,000 on legal bills since his release, to overturn his conviction.

Why bother?

Because, he believes, he was fitted up - by his former business partners, the police, the judiciary. 

In short: "I was shafted."

He’s been knocked back by the Court of Appeal and Supreme Court and is now considering his last option - a plea for mercy to the Governor-General.

Private investigator Mark Walker, a former police detective, met Colosimo at Scalini’s pizzeria in St Heliers, Auckland, which Colosimo runs for his daughter, Marie. 

"He gave me the file, I’ve got to admit I was pretty damn surprised by what I read," Walker says.

"I came away thinking ’gee, this guy actually has been stitched up’."

Walker believes police pressured a witness to change her testimony.

A police constable who was the witness’ support person was so upset by the actions of the officer in charge, she laid a formal complaint against him. 

THE EMPIRE

Colosimo came to New Zealand from Sydney when he was about 18 and ran eateries in Auckland before buying Amphora restaurant in Tauranga in the early 2000s.

He established bars such as Imbibe at the Mount, Rain in Papamoa and the Kingsley Jones pub with Jonah Lomu’s former manager Phil Kingsley Jones.

That venture ended in a legal stoush between the pair and an Employment Court ruling that Colosimo had mistreated staff.

He leased the Kestrel and following a $1.2m fitout it opened as a fine dining restaurant at a mooring off The Strand in February, 2005.

The Crown claimed that the business, run through a company called Cervino Holdings, was insolvent virtually from the start, losing up to $30,000 a month.

But Colosimo says the prosecution only highlighted poor results from the fluctuating weekly sales analysis.

He admits there were problems, however.

"It was making money but it was too hard to run. It seated 450 people - one night you did 10 people, the next you did 200."

By this stage Colosimo had nine places in Tauranga and he’d moved to Australia to open restaurants. He admits he’d taken his eye off the ball. "It became a nightmare."

He decided to sell the Kestrel, and in early 2006 started negotiating with a shareholder in the business, a former Tauranga cop whose name was later suppressed in court.

There was an offer of $950,000 but the deal fell through.

Several months later his friends Michael and Sue Dyke became interested.

THE SALE

Colosimo wanted $600,000; the Dykes were offering $400,000 plus stock (their private valuation came in at $583,000).

Colosimo accepted their offer and the Kestrel changed hands in April, 2007, the sale and purchase agreement including a $1.5m turnover warranty.

Cervino Holdings was wound up and the proceeds were used to pay creditors at 20 cents in the dollar.

Colosimo’s empire crumbled, his other companies going into liquidation. He was bankrupted, with debts totalling about $900,000.

But his troubles were only just beginning.

After about a year of trading under the Dykes, the Kestrel folded and police started asking questions about the financial information he’d supplied.

In dispute was a two-page trading statement, on a Bay Taxation Services letterhead, which showed a net surplus before tax of $199,597 for the 10 months to November 30, 2005.

Colosimo’s former accountant Kevin McFadden of BTS - who’d been an investor in one of his pubs and lost money when it went broke - told the Dykes the statement was fictitious.

Colosimo claimed to know nothing about the figures - he left the financial side of the business to his staff and accountants.

If the Kestrel had failed, he said, it was because of mismanagement by the Dykes. 

But he was charged with one count of making a false financial document and one of dishonestly using that document to obtain a pecuniary advantage.

It was alleged he’d cut and pasted the Bay Taxation letterhead on to a set of draft trading accounts provided by his new accountants, LB Dawson and Associates, using a computer and photocopier in his corporate office.

He’d doctored the numbers, the Crown claimed, changing the profit figure from $99,000 to $199,000.

THE TRIAL

Colosimo’s trial began in the Tauranga District Court in August, 2011 and ran for 11 days.

The defence showed that the forged document was saved on administration assistant Brenda Ward’s office computer using a generic login in February, 2006 - more than a year before it was given to the Dykes.

Why would Colosimo fake a financial statement and hold on to it for a buyer he didn’t even know would come along, his lawyer, Bill Nabney, asked the jury.

The Crown suggested he’d intended to give it to the former cop, although he’d let the man have full access to the accounts.

Forensic analysis showed the document was created on Excel in eight minutes; the court heard Colosimo’s computer skills were limited to playing solitaire.

Crown prosecutor Julie O’Brien put it to Ward that she created the pages on Colosimo’s instructions and later deleted files for her boss.

She vehemently denied the allegations. 

Colosimo later discovered that, just before closing submissions, the Crown applied unsuccessfully to Judge Peter Rollo to have the forgery charge amended to say that he "caused a document to be made".

The defence case was that the document was created by Barry Harvey, a long-time BNZ manager who Colosimo hired to be his office manager.

Colosimo claimed he asked Harvey to pull together some financials for the Dykes and Harvey provided the trading statement in a sealed envelope, which Colosimo handed to the couple.

Harvey was networked to Ward’s computer, the defence said, and 10 days before the document was created had been sent a fax, addressed to he and Colosimo, with the financial information upon which the forgery was based.

Nabney produced correspondence which showed that Harvey had been negotiating with the BNZ to extend Cervino Holdings’ overdraft.

Harvey had told the bank in writing that a financial statement being prepared by the company’s accountants would show a profit before tax of more than $100,000. But when the draft arrived the figure was only $99,000 - so he changed the number to $199,000, the defence claimed.

He had a financial interest in the company’s future as he and his wife had invested $44,000.

Harvey strongly denied the allegations. He said he had no knowledge of the forged document and had not given it to Colosimo.

At one point Judge Rollo warned him that he had the right not to incriminate himself when he was asked about another document, a financial statement for one of Colosimo’s Australian companies which was on a Bay Taxation Services letterhead and had Harvey’s handwriting on it.

Evidence was heard that the document was also a forgery.

Harvey confirmed he’d made adjustments to the figures but couldn’t recall why and didn’t know the origin of the document. He exercised his right not to answer further questions.

Harvey now lives in Darwin and is angry that Colosimo continues to accuse him.

"It’s been through court, all the evidence was presented and he was found guilty," he said.

OFF TO PRISON

In his summing up, Judge Rollo pointed out that Colosimo claimed to have handed over a sealed envelope containing information he knew nothing about - but the Dykes testified that they discussed the document with him at length.

The judge said the Crown’s position was that Colosimo made the document, or "perhaps less forcefully" that he directed Ward to do so.

Although he reminded the jury it needed to be satisfied that Colosimo created the papers to find him guilty of forgery, Colosimo believes mentioning the alternative scenario swayed the jury.

The judge also repeated a comment made in testimony by the ex-cop - that Harvey was so "scared" of Colosimo and his domineering manner it reminded him of the fear instilled by gangs.

Colosimo suspects the former officer pushed his ex-colleagues in the police to lay charges.

The man confirms he lost a lot of money through Cervino Holdings but denies he orchestrated charges. "I was just a witnesss."

After Colosimo was found guilty, Judge Rollo denied his request for home detention, saying a deterrent was needed.

The Dykes had lost everything, the judge said - the new home they’d borrowed against to buy the Kestrel, another $150,000 they’d put into the business to keep it afloat, $200,000 contributed by their son - mostly because of Colosimo’s deceit.

He added that the verdicts vindicated Harvey, confirming his "honesty and integrity".

As he was driven away from court in a prison van, Colosimo thought: "What the f... has gone wrong here?"

He and his supporters feel he was the victim of a "home town decision" - that people who lost money when his business empire collapsed wanted to bring him down.

It makes no sense that he’d commit fraud to offload a still-profitable restaurant at a bargain price, he says, and no-one benefited financially from the crime.

The Dykes agreed in court they had achieved the promised turnover figure, but said their costs were far higher than outlined in the information Colosimo supplied.

Colosimo says that’s mainly because their wage bill was double what his had been.

THE WITNESS

He’s incensed at Ward’s treatment. She was to be a witness for the Crown but was dropped at the last minute for being "unreliable" because her statements had allegedly changed.

Ward says she went to court every day and was on standby to give evidence for the prosecution.

One morning the officer in charge, Detective Peter Sweeney, asked her to come to the Tauranga station.

"He basically said ’we know Michael’s a crook, we’re gonna prove it one way or the other - this is your last chance to tell the truth’.

"I said ’I have been telling the truth all along, I don’t know what else you want me to say’."

She was called to give evidence for the defence instead and was accused under cross examination of creating the forged document, and also with communicating with Colosimo during the trial, which she says wasn’t true.

"After they accused me on the stand I went into a state of shock, I walked outside and I was shaking, in tears. I felt misled and used."

Ward says she has the "utmost respect" for Colosimo and thinks he was stitched up.

"All along I kept saying... ’he didn’t do it, he can’t have, he can’t even type, he can barely turn a computer on’."

Ward says Colosimo ruffled feathers in Tauranga with his loud, straight-up approach - "he either likes you or he doesn’t" - and people were jealous of his initial success.

"I think people banded together and said ’right, let’s deal to this guy once and for all’."

Ward was supported in court by a friend from Taupo, police constable Em Weight. 

After the trial Weight wrote a complaint to her superiors about Sweeney, saying he’d called her during the trial to quiz her about Ward’s relationship with Colosimo and whether Ward had been in touch with the defence.

Weight was furious that it was suggested during cross examination that she’d told the prosecution about conversations Ward had had with Colosimo, which she said wasn’t true.

"I feel that Detective Sweeney has abused my friendship with Brenda to try and glean information," Weight said in an email, released under the Official Information Act.

"His behaviour amounts to nothing more than trickery and deceit...his treatment of Brenda as a witness has been abysmal."

Superintendent Anna Jackson, the national manager of police professional conduct, says the matter was investigated by the Independent Police Conduct Authority, which found no evidence of misconduct.

"Police have absolutely no concerns about Detective Sweeney’s actions or the way the trial was handled."

Weight declined to comment, but Colosimo believes her complaint was swept under the carpet.

LOST RECORDING

Colosimo appealed his conviction on the basis some of the evidence was wrongly admitted and that Judge Rollo’s directions to the jury were unfair.

The appeal was thrown out.

He was unable to be patched into the Appeal Court because of a technical glitch with the prison. Believing he hadn’t received a fair hearing, he sought a transcript.

He was turned down by the court five times over a couple of years, told appellants did not have an automatic right to transcripts.

Finally, when his lawyer, Gerard Curry QC, wrote to the court in 2014 saying he needed a transcript to prepare for a Royal Prerogative of Mercy application, a judge agreed to have it typed up.

Then the court wrote saying there was no recording of the hearing because of "IT issues" at the time.

"That’s just a bulls... excuse, how can transcripts get lost," Colosimo says.

Stuffasked the Ministry of Justice what happened with the recording but was told an application would have to be made to a judge, which could incur a fee.

It wasn’t the only time information was lost - Colosimo sought help from the Banking Ombudsman when the BNZ said it couldn’t find all 22 pages of a fax it had received from Harvey, which he felt could help his case. That complaint remains unresolved. 

Meanwhile, the Dykes are angry that Colosimo continues to litigate a case they thought was over with.

They say they never would have bought the business if they’d known its true financial position.

Sue Dyke says she’s run a successful restaurant before and denies mismanagement caused the Kestrel to go under.

"After an 11-day trial the jury came back with a unanimous decision. It speaks for itself really.

"Why doesn’t he just move on with life and let other people move on with theirs instead of dragging up something that should be dead and buried."

Michael Dyke says simply: "He’s a f...... crook."

But Walker, the private investigator, says he believes Colosimo has a good case.

"Every step of the way they seem to have come up with something to thwart his endeavours, probably in the hope that he’ll eventually go away. But he’s like a dog with a bone...he’s not going to go away, he genuinely believes that a wrong has been committed."

 - Sunday Star Times


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