Eugene DeMarco. PHOTO/FILE
The trial of a United States national accused of selling two vintage aeroplanes owned by Sir Peter Jackson and keeping the profits to settle his financial woes began in the High Court at Wellington on Monday.
Eugene DeMarco, 57, the former manager of Sir Peter’s company, The Vintage Aviator Ltd, appeared before Justice Karen Clark facing six charges of fraud relating to the sale of three vintage aircraft in 2016, two of which were owned by TVAL.
The company specialises in selling restored and replica vintage World War I planes.
Sir Peter was due to give evidence yesterday.
In May, DeMarco pleaded not guilty to four charges of theft by a person in a special relationship and two of obtaining by deception.
Crown prosecutor Sally Carter told the jury of six men and six women that she suspected they would be a lot more familiar with vintage aircraft by the end of the trial.
She said DeMarco is alleged to have sold two of the vintage aircraft, a BE2 and a Sopwith Pup, to the New Zealand Warbird Association at inflated costs to cover the financial difficulties of his own entity, The Airtight Trust.
This included debts amounting to $1 million used to purchase two other vintage aircraft.
In 2011, Sir Peter agreed to buy a hangar owned by the trust and lent DeMarco more than $600,000 through the Film Property Trust as a short-term loan.
By early 2016, this had still not been repaid, and the interest had accrued so that more than $1m was owed.
Around this time, DeMarco was approached by a benefactor of the Warbirds looking to buy WWI-era vintage planes so the people of Auckland could enjoy them without having to travel to Blenheim or Wairarapa.
DeMarco agreed and sold them three aircraft – a BE2, Albatross, and a Sopwith Pup.
He is alleged to have told TVAL that the planes were sold at an inflated price, as the purchasers were friends who wanted to offer him a commission to help with his financial problems.
Payments were made to DeMarco’s company called The Old Stick and Rudder, which representatives from the Warbirds Association believed was the same as TVAL.
They paid 85 per cent of the price in mid-2016, a sum of more than $1.7m, with the remainder due upon delivery.
Carter told the jury a large portion of this money was used to pay off his debt while he let the remaining $1m sit in his bank account and used it for everyday bills.
“In reality he helped himself to an interest-free loan, but that doesn’t lessen the dishonesty of what was happening at that earlier stage,” she said.
In 2016 the planes were delivered to the Warbirds Association in Auckland, despite TVAL being told the planes would not be completed until 2017 and not having received payment for them.
Jackson was alerted to the sale of the aircraft after seeing photos of the BE2 online and after TVAL was contacted by the Civil Aviation Authority about the planes’ changed registration.
In August 2017 an investigation was launched by the Serious Fraud Office.
The jury heard from several witnesses on Monday including the benefactor, who was granted name suppression, and Warbirds Association president Frank Parker.
Parker repeatedly told Carter that he believed he had purchased the planes from, and made payments to, Sir Peter’s company.
“There was no doubt in my mind that we were dealing with TVAL.
“I’ve met [DeMarco] at the TVAL factory where he was wearing a TVAL shirt,” he said. “I’ve known him socially for 12 years and he was acknowledged as the vintage aviation man.”
Seven other witnesses are still to be called, including Sir Peter, and the trial is expected to last three weeks.
The trial resumed yesterday morning with the Crown continuing Parker’s examination.
