A gambling addict stole more than $500,000 worth of goods from her employer, including thousands of courier bags, pre-paid envelopes and gift cards bought on the pretext that they were for her colleagues.

Katie Dianne Ruth Watson then went on to sell most of the items on TradeMe for far less than they were worth to feed her gambling habit.

When she was caught she had only $16,000 – which was in her Kiwisaver account – to offer as reparation.

Katie Watson worked as a manager for Allied Petroleum, which delivers fuel and lubricants nationwide and operates a number of petrol stations. Photo / Supplied

The trusted manager’s deceit and betrayal left her workmates with “significant personal trauma”, according to court documents.

The 37-year-old from Auckland, who had no criminal record apart from a 16-year-old drink-driving conviction, is now in prison.

She worked as a manager for Allied Petroleum Limited (APL) and committed what a judge called “deliberate and sophisticated fraud” over 18 months from March 2018.

In that time, Watson:

• Ordered $428,000 worth of courier bags and pre-paid envelopes, which she onsold through TradeMe for less than half their value - $215,600.
• Stole oils and lubricants from APL worth $86,266, and sold them on TradeMe for $20,900.
• Used her APL credit card to buy gift cards worth $2400, mainly from Countdown, on the pretext that they would be given to staff as performance incentives. She kept them all.
• Used her APL credit card to pay the $826 she owed TradeMe for listing and success fees.

Watson pleaded guilty to two charges of theft by a person in a special relationship, two of accessing a computer for dishonest purposes, and one of dishonestly using a document.

All the charges were representative, meaning each charge covered a span of similar offences over time.

A district court judge sentenced Watson to prison for two years and four months on March 14.

She appealed her sentence to the High Court, arguing that in calculating it, the judge had begun with a starting point which was too high, and come up with an end sentence which was “manifestly excessive”.

Her appeal was dismissed in the High Court by Justice David Boldt, who said that the starting point had not been too high, the discounts given were “generous”, and the final sentence had “fallen well short” of being excessive.

Justice Boldt said Watson suffered from a gambling addiction.

“It appears her fraud funded this addiction and it is the principal explanation – indeed the only apparent explanation – for what happened,” he said.

A pre-sentence report said Watson linked her gambling addiction to a history of depression, which led to “unhealthy coping behaviours”.

Justice David Boldt said the $16,000 offered in reparation was "only a drop in the bucket". Photo / NZME

She sought treatment for her gambling habit in 2019, unsuccessfully, and had consulted a psychotherapist between 2019 and 2021.

Justice Boldt said APL’s total loss from the frauds was $517,780, but the company may also be liable for additional delivery fees when the courier bags are used.

Watson had personally gained $239,551 from her frauds.

Justice Boldt said little was left of the money Watson stole, and she was only able to offer reparation of $16,000 from her Kiwisaver.

“That sum was only a drop in the bucket when measured against the overall fraud, though it did represent an offer by the appellant to do what she could.”

Justice Boldt said the effect of the woman’s offending on her workmates was “profound”.

He quoted from a victim impact statement from Jocelyn O’Donnell, an owner and director of APL’s parent company, H W Richardson.

O’Donnell said Watson was the manager of a small customer service team at the company’s Wiri office, which had a “family-type feel” to it.

“The team were devastated when Katie abruptly left Allied, as they were a tight working group who trusted and believed in Katie as their manager,” O’Donnell’s statement said.

“Most of the team had worked hard for Katie for a number of years.

“Some had a personal relationship with Katie, so when Katie personally revealed the extent of her deceit ... the team took Katie’s betrayal personally and suffered significant personal trauma.”

Ric Stevens spent many years working for the former New Zealand Press Association news agency, including as a political reporter at Parliament, before holding senior positions at various daily newspapers. He joined NZME’s Open Justice team in 2022 and is based in Hawke’s Bay. His writing in the crime and justice sphere is informed by four years of front-line experience as a probation officer.