Bribery and corruption: Stephen Borlase forfeits $3.5m but properties, cars unfrozen

A corrupt former businessman who was jailed for bribing public officials will forfeit millions of dollars to the Crown – but he’ll get to keep his home, bach and a vintage car.

Stephen Borlase, the head of roading contracting business Projenz, was jailed in 2017 after what became New Zealand’s largest ever bribery prosecution.

An investigation by the Serious Fraud Office found Borlase bought-off Auckland Transport and Rodney District Council officials, including Murray Noone and Barrie George.

Borlase’s offending involved a series of kickbacks to Noone – more than $1 million – for contracts worth tens of millions of dollars to Projenz between 2005 and 2013.

He also gave George travel packages and gifts worth $103,580.

After the criminal court case, Borlase and his wife Catherine, who was not charged, had their assets – worth about $8.6m – frozen by the High Court on suspicion of it being “tainted” by profits of crime.

Now, the Borlases will have some of their assets unfrozen after reaching a settlement with police, which was this week approved by Justice Geoffrey Venning.

The civil case had been heading towards a three-week hearing next month for a judge to determine what would happen to the assets.

Court documents obtained by the Herald show $3.5m in bank accounts belonging to Borlase will be forfeited under the Criminal Proceeds (Recovery) Act 2009.

However, a multimillion-dollar mortgage-free property portfolio and a car collection – including a 1963 Ford Fairlane – will be returned. The balance of the account funds and interest will also be back in the couple’s pockets.

The properties include a Mt Eden home with a 2017 rateable value of $2.67m, a bach near Whitianga with a 2020 RV of $1.38m, and an Albany commercial property which served as Projenz offices. A 2015 Mercedes Benz CLA180 and 2011 Jeep Grand Cherokee will also be returned to Catherine.

Justice Venning’s order said while the respondents, listed as the Borlases, a linked trust and Projenz, considered they had a good defence with expert evidence to challenge any profit was made from the corrupt contracts “they acknowledge the risks of proceeding to a contested hearing”.

Police had valued the unlawful benefit obtained by Projenz and Borlase at $20.3m but he suggested it was closer to $1.03m, the order said.

The Borlases did not wish to comment about the settlement when asked by the Herald this week.

Detective Inspector Lloyd Schmid, of the Financial Crime Group, said his team was pleased with the resolution. He said it stripped Borlase of millions of dollars gained as a direct result of his criminal activity.

“This was a serious matter involving corruption of public officials at the highest level, with more than $1 million in bribes paid to gain valuable contract work,” he said.

He said white collar professionals seeking to profit from crime would not only be prosecuted but their assets targeted too.

“Our message is clear – not only will those convicted of corruption or bribery risk losing their freedom, but police will take action to recover any benefits derived from such criminal activity,” he said.

“New Zealand businesses trade on our hard-earned reputation as one of the least corrupt countries in the world. We need to maintain a culture of zero tolerance towards corruption in New Zealand.”

At the trial of Borlase and Noone, who have known each other since the late 1990s, the court heard of lavish spending by Projenz on Auckland Transport staff – including fine wines, whisky, travel and a $5500 marathon lunch at Viaduct restaurant Euro.

Borlase paid Noone about $100,000 in yearly “consulting fees” over seven years, in addition to several international trips and long lunches.

With the council contracts Projenz grew rapidly and made annual profits of $3.8m in the year before the offending was discovered, which came to light in 2013 when Noone took a holiday and a colleague expressed concerns over several payments to Borlase’s firm awaiting authorisation.

After being found guilty Borlase, who was booted out of New Zealand’s engineering professional body for the offending, was sentenced to five years and six months’ imprisonment and Noone five years by Justice Sally Fitzgerald.

Borlase unsuccessfully challenged his conviction and sentence at the Court of Appeal, while Noone also failed in an appeal of his sentence in 2017.

They were both released from prison by the Parole Board in late 2018.

George pleaded guilty in 2016 to accepting bribes from Borlase and was sentenced to 10 months’ home detention.

He gave evidence for the Crown against Borlase and Noone and recalled a 2006 function when Borlase “passed an envelope down along the table to me” as a “little gift in appreciation”. It was a travel voucher worth about $2000.

George said he showed Noone, his boss, and asked: “Did you know about this?”

Noone, he said, replied: “Yeah, pretty good, eh?”

George said had been advised by two colleagues at the dinner to not accept the gift.

“That was really the start of that particularly merry-go-round,” he said.

The seized (and returned) assets of Stephen Borlase

• $3.5 million in bank accounts – forfeited.

• A home in Mt Eden – returned.

• A bach in Hahei, near Whitianga – returned.

• Commercial property in Albany – returned.

• 2015 Mercedes Benz A180 – returned.

• 1963 Ford Fairlane – returned.

• 2011 Jeep Grand Cherokee – returned.

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