Former New York property developer Colin Rath forged documents to sell in-debt yacht

By Emily Moorhouse of

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photo-captioned__information"> Colin Rath was back in court on more fraud charges after being jailed earlier this year for committing tax fraud to the tune of $1.3 million.
Photo: NZME

A woman who bought a luxury yacht that was later seized due to money owed on it has described the man who sold it to her as “the most unpleasant and deceitful person I’ve ever come across”.

Colin David Rath, a former New York property developer who sailed to New Zealand on his yacht and was jailed for committing tax fraud to the tune of $1.3 million, was back in court for deceiving a woman into buying his yacht which left her thousands of dollars out of pocket.

The 60-year-old appeared at the Christchurch District Court on Wednesday where a cumulative sentence of nine months was added to the prison sentence he is currently serving for his latest offending.

Rath was jailed in March this year for three years and seven months on 39 charges, including using a document for a pecuniary advantage relating to GST returns and forgery relating to the Inland Revenue Department and Immigration New Zealand.

Today, Rath appeared for three new charges relating to the sale of his yacht, which was subject to an encumbrance, and had a significant amount of debt owed. Rath had forged documents to hide the debt and sold the yacht to a woman who was passionate about sailing.

Rath pleaded guilty to these charges in August while he was serving his prison sentence imposed in March this year.

The woman who purchased the yacht read her victim impact statement to the court, stating she intended to sail to Australia to see her children, unaware of the significant amount of money Rath owed in relation to the vessel.

But, shortly after purchasing it for $400,000, the yacht was seized.

The woman suffered a significant financial loss from having to purchase the yacht for a second time at a cost of of $202,000 after it was seized, as well as having to cover huge costs to get it up to international sailing standards.

She said Rath had manipulated her and she said it was “staggering” how he had fooled so many people with his fraud, out of his “pure greed and selfishness.

“He is the most unpleasant and deceitful person I’ve ever come across.

“I am stunned as to how a person like this was allowed into New Zealand.”

The woman said the emotional toll Rath’s offending had caused on her and her family “almost destroyed me” and she had not seen a cent of the money owed to her by Rath.

She said throughout the whole process Rath had shown no remorse at all and went to great lengths to cover his tracks for his own greed.

Rath was charged that on 4 February 2019, at Christchurch he used a US Coast Guard Deletion Notice that he knew was forged to obtain a pecuniary advantage.

He was further charged that on 4 December 2018, at Christchurch he used another document he knew was forged – a satisfaction of mortgage – for a pecuniary advantage.

The third charge was that between 1 December 2015, and 10 December 2018, at Christchurch by deception and without claim of right he obtained ownership of a pecuniary advantage namely $380,000.

Crown prosecutor John Whitcombe said there was a great deal of premeditation involved in the offending that left the woman with a huge financial burden and having to deal with Rath’s mess.

Whitcombe described Rath as a “professional fraudster and had little regard for other people”, stating the $400,000 that the woman had paid Rath for the yacht was only part of the cost she had to endure.

Whitcombe said Rath should not receive full credit for his early guilty pleas, as the evidence against him on these charges was “overwhelming”.

He said the previous judge was generous with the credit he received during his sentencing in March and as Rath had shown no remorse, he should not be entitled to credit for that or previous good character as the offending was prolonged.

Rath’s lawyer Craig Ruane said as Rath has no assets it was “impracticable” for an order of reparation to be made and it was likely that he would get deported back to the US once he was released from prison.

He said Rath needed to sell his yacht but as time went on, he found himself in more financial trouble and hoped to find his way out but “the walls came tumbling down before he could do so”.

Ruane said if Rath was facing these charges when he was sentenced back in March, it was likely the judge would have applied an uplift and asked Judge Michelle Duggan to do the same.

He pushed for a starting point of four to six months for the new offending.

However, Judge Duggan wasn’t convinced and took a starting point of 12 months, stating the offending was highly premeditated as there were multiple conversations about the sale of his yacht and several documents that he signed, knowing they were forged.

She said his willingness to participate in a restorative justice meeting with the woman was not enough to warrant credit for remorse, stating it was her view that Rath showed no genuine remorse.

She allowed Rath a 20 per cent credit for his guilty plea as well as 5 per cent for his previous good character, resulting in a sentence of nine months imprisonment.

Judge Duggan said this was a cumulative sentence to be served on the three years and seven months sentence he is currently serving. She also made an emotional harm payment order of $5000 to go towards the woman when Rath started earning an income after his release.

Rath sailed to New Zealand on a luxury yacht with his family in 2016.

The following year, he started a winery business in the Waipara wine-growing region in North Canterbury.

However, his businesses, Waipara Winds Ltd which traded as Fiddler’s Green restaurant and vineyard, and New York Grape Escape Ltd, struggled.

Over a four-year span, through his two companies, Rath filed 39 false GST returns.

In support of them, he prepared 85 forged documents.

He also used 13 forged documents purporting to be from Inland Revenue in support of an entrepreneur residency visa application to Immigration New Zealand.

Inland Revenue, which brought the prosecution against Rath, said he was given just over $1.3m in refunds.

During his first sentencing in March, Rath said he had let his wife and daughters down.

“I did defraud the system but I needed a way to cover my costs.”

– This story was originally published by the NZ Herald