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Court confirms first ever jail sentence in Commission case

2 November 2017

The Commerce Commission welcomes the Court of Appeal’s decision to dismiss Vikram Mehta’s appeal against his jail sentence.

Mr Mehta was the first person to be jailed in a prosecution initiated by the Commission. He was sentenced to 2 years’ jail in March 2017, for taking money from customers without intending to supply goods as promised.

In declining the appeal, the Court said “we see no error in the judge’s methodology… there was much to indicate a sentence of imprisonment was required in this case and little to point to a sentence of home detention.”

Mr Mehta was the sole shareholder and director of Flexi Buy Ltd, a mobile trader, and was convicted under the Crimes Act 1961 as a party to Flexi Buy’s conduct.

Flexi Buy operated as a mobile trader or “truck shop”, selling electronic and household items door to door. Customers were promised that they would receive goods after a number of payments had been made, when Mr Mehta knew that they would not. Only nine of more than 300 customers received any goods.

Mr Mehta did not use the sales proceeds to order stock. Instead he used Flexi Buy income for his personal use, rent on his Auckland apartment, and living expenses, including at least $22,000 spent during a 2013 trip to India.

“We are pleased that the courts have confirmed that imprisonment was appropriate. This aligns with our view of the seriousness of Mr Mehta’s conduct. Traders need to know that there can be serious personal consequences for offending against consumers,” said Commissioner Anna Rawlings.

“In this case, the Court recognised that affected consumers could ill-afford to lose the sums that they paid, and suffered considerable harm,” she said.

Background

Flexi Buy Ltd was fined $50,000 in the Auckland District Court in March 2016 for breaches of the Credit Contracts and Consumer Finance Act. It was the first mobile trader to be sentenced following the release of the Commission’s Mobile Trader 2015/16 report.

Vikram Mehta was convicted in November 2016 and sentenced on 3 March 2017.

The Court of Appeal hearing was in Auckland on 5 October 2017.