Former Nelson businessman Philip Whitley — whose company, Near Zero, claimed to have invented and patented a revolutionary method of data compression — has been sentenced to five years and three months’ imprisonment for two counts of making a false statement as a promoter.
Whitley was convicted of the offences last month, and sentenced this morning.
The saga stretches back to the early 2000s, when Whitley, a former software developer with Nelson firm Astute Software, left to work on a supposed technological breakthrough that would radically change the way data is compressed.
After gaining financial support from a group of private investors, Whitley in 2006 formed Near Zero, and another company, Synitro to own and promote the technology.
In 2006 and 2007, Whitley held a number of presentations to promote the companies and the technology.
The core of the case brought against him by the Serious Fraud Office is a series of statements he made during the presentations, specifically that the supposed compression technology was “a breakthrough invention, offering dramatically more efficient electronic data transmission and storage capability”, which was patented.
Similar false information was also published in information packs distributed by the two companies.
According to the SFO, “all the false statements were made by Mr Whitley with the intention to induce persons to subscribe to a security, namely to buy shares in NearZero.”