'Guru' businessman gets jail for half-baked pie scam

PIE MAN Stephen Donnelly is behind bars after a District Court jury found him guilty of committing fraud related to his The Pie Guru business.

Stephen Donnelly. Picture: Ross Irby

PIE MAN Stephen Donnelly is behind bars after a District Court jury found him guilty of committing fraud related to his The Pie Guru business.

What was not known by the Ipswich jury is Donnelly, 55, a father of four, had pleaded guilty before his trial to committing two other fraud offences involving the franchise.

He was sentenced on for a total fraud of $78,598.50.

Donnelly became well known in Ipswich and other areas from his previous success operating food business Big Dad's Pies that used his father's bakehouse recipes.

In the Crown case put by prosecutor Cameron Wilkins, Donnelly went on trial for three charges that he committed a $30,000 fraud against businessman Antony Dutton; a $29,450 fraud against Rockhampton Pie Guru shop operator Stevan Davies; and a $2148.50 fraud against Michael Yerbury who had the Pie Guru Caloundra business.

There was a fraud of $11,000 against Schweppes Australia and another fraud of $6000 that involved the intended leasing of a Gladstone store from a real estate agency. Mr Davies lost the money after paying it to Donnelly through the Don Family Trust account in the belief it would be used to lease the store for his second pie shop.

Donnelly pocketed the money.

Mr Wilkins said a jail term of three to four years was sought for Donnelly, given his previous criminal history.

Mr Wilkins said Donnelly had been convicted some years ago of obtaining about $38,000 by false pretences; been convicted by a Gympie court for fraud offences; and sentenced by the District Court at Brisbane in 1994 for more than a dozen charges of false pretences. He served 12 months of a three-year jail term.

In sentencing Donnelly for the new offences, Judge Dennis Lynch QC found nobody would likely recoup the outstanding monies and it had likely been gambled away by Donnelly.

The $30,000 fraud involved Mr Dutton paying the money in the false belief he was buying from a man named Danny McDonald for his right to open a pie shop in Ipswich.

Judge Lynch said he was satisfied (from the evidence) that Donnelly and Mr McDonald were both responsible.

"He (Mr Dutton) was misled, induced by the two of you to pay $30,000 to buy out McDonald's interest when it did not exist," Judge Lynch said.

"You received $17,500 out of that $30,000 and Mr McDonald got the rest. It seems Mr McDonald was a ready participant."

Donnelly had first met Mr Dutton at a Millionaires Mind seminar in Sydney in October 2011.

They spoke about Big Dad's Pies and then kept in touch.

After linking up to operate a pie business, Mr Dutton told the court Donnelly's role "was just to advise me. He was not entitled to any royalties."

Judge Lynch told Donnelly it was "with a degree of sadness" that he sentenced him but Donnelly was in that position through his own conduct.

"Being in prison will adversely impact your two teenage sons," he said.

His three sons were seated just centimetres behind their father, behind the glass of the dock where he sat waiting to hear his fate.

Earlier, his defence barrister Russell Byrnes told the court the eldest son, aged 21, would be the carer of his younger brothers while their father was imprisoned.

Donnelly was their sole carer.

He said Donnelly spent 23 years as a swimming coach, then returned to the family bakery trade.

And noted his previous offending included passing bad cheques and that Donnelly had admitted to gambling since the age of 16.

In his opening, Mr Byrnes told the jury that at the heart of the case was a failed business relationship between the two men - "like a failed marriage, bitterness, rancour".

Judge Lynch briefly recounted some of the evidence heard by the jury in which invoices had been sent to the Pie Guru operators from Food Chef that supplied the product.

Donnelly had sent out his own invoices with no legal right or entitlement to do so.

"The jury rejected your explanation that you were receiving it for royalties, that it was for intellectual property, or your know-how," he said.

"It was deliberate dishonesty for personal benefit.

Judge Lynch sentenced him to three years jail for the most serious offence.

He received lesser jail terms of 18 months and 12 months - to run concurrent for the others.

Donnelly was ordered to serve 12 months jail, with the remainder of the sentence suspended for five years.

He was being released earlier because of the hardship his sentence will impose on his children.