GREEN ACRES MASTER CHARGED WITH FRAUD
7 November 2008 - Former Green Acres master franchisee Keith Lapham appeared in court yesterday on two charges of obtaining by deception and one charge of fraud.
The charges follow a lengthy investigation by the Serious Fraud Office into allegations that Mr Lapham used his position as a Green Acres master franchisee to defraud 200 immigrants of up to $4 million. The story broke just before Christmas 2007 and has been a major factor behind the Government's review of the need for franchise legislation. The SFO alleges that Mr Lapham fraudulently obtained $3,591,900 from approximately 172 people to whom he granted sub-franchises in the period from March to December 2007. A second charge alleges that he mis-represented the number of sub-franchisees in the Auckland area.
The third charge relates to false representations that Mr Lapham is alleged to have made to Green Acres about how many sub-franchises he had granted, thereby defrauding the company of $244,800. Green Acres has always said that it, too, was a victim of the actions of its master franchisee. No charges have been laid against Green Acres and chief executive Andrew Chisholm says that at no time was the company or any of its directors the subject of an SFO inquiry. The company welcomed the news that Mr Lapham had been charged.
Green Acres has taken a number of steps to assist those affected by Mr Lapham's actions, including granting genuine franchises in ironing and other services at no further fee. However, it is reported that there are still problems with some of those affected and several experienced franchise lawyers who have talked to Franchise New Zealand have voiced the opinion that, as Mr Lapham was a properly-appointed master franchisee, the company is responsible for his actions whether or not they were taken with the company's knowledge. Green Acres does not accept that this view reflects the correct position.
Mr Lapham was remanded on bail until 2 February 2009.
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