John Banks has been found guilty of knowingly filing a false electoral return during his failed 2010 bid for the Auckland mayoralty.
Justice Edwin Wylie delivered his verdict in the Auckland High Court this afternoon, saying he was not persuaded Banks knew of a $15,000 donation by SkyCity but was "sure" he knew of the two $25,000 donations made by internet millionaire Kim Dotcom.
Were it not an election year, the ACT MP would have to resign if a conviction were entered at sentencing on August 1.
However, the House rises on July 31 for the final time before the September election, when Banks has already said he will stand down.
Banks has been charged under a section of the Local Electoral Act that carries a penalty of up to two years in prison or a $10,000 fine.
Speaking outside court, he said he was "disappointed with the verdict."
"We are surprised with the result."
Banks says he will be talking with his legal team about his "options going forward", which could include applying to be discharged without conviction.
The ACT Party has also expressed its disappointment at the verdict.
"While ACT had nothing to do with Mr Banks' 2010 mayoral campaign we have always found him to be a man of integrity," party president John Thompson said in a statement.
Labour leader David Cunliffe believes Prime Minister John Key must now acknowledge the Government has been "propped up by a corrupt politician".
"John Key turned a blind eye to John Banks, refusing to read the Police report which ultimately led to this prosecution," he says.
"The Prime Minister has wilfully ignored the case against the MP for Epsom because he was prepared to have his Government propped up by someone who has acted illegally."
Mr Cunliffe says Key needs to work to restore confidence in the political system and back its Member's Bill which would remove the "coat-tailing" provisions from the Electoral Act.
Labour says its amendment is ready and would support it passing before the election in September.
But National MP and Leader of the House Gerry Brownlee says the Government has not lost face as a result of the trial.
embarrassment for the Government. In the end the court makes the decision and
the Government abides by it like everyone else," he says.
can't speak for [Banks] but what I would know is I've always found him to be an
honourable man and I think he'll be very disappointed. It's not for me to
reflect on any decision the court has made."
Banks' two-week judge-only trial saw a number of witnesses give evidence, most notably internet millionaire Kim Dotcom and members of his staff.
Dotcom testified he met Banks and his wife Amanda for a lunch on June 9, 2010 where he told Banks he would like to donate $50,000 to his campaign, but was asked to split it into two cheques.
Banks claimed he told Dotcom only that his campaign was seeking 10 $25,000 donations from people on the NBR's richlist, and did not request Dotcom split the donation or make it anonymous.
A $15,000 donation from SkyCity was also declared as anonymous, with the Crown claiming Banks also knew about that donation.
SkyCity's Nigel Morrison told the court he'd handed Mr Banks a $15,000 cheque in a company envelope at a short meeting set up for that purpose.
SkyCity had no desire for the donation to be anonymous and no one had approached the company asking if the donation should be anonymous, Mr Morrison said.
During Dotcom's testimony in the opening week of the trial, he was repeatedly quizzed by defence lawyer David Jones QC on the June 9 date. Mr Jones said it was not possible that the meeting could have occurred then as Amanda Banks was at work that day.
However Dotcom, his ex-wife Mona and his former bodyguard Wayne Tempero all maintain the meeting occurred on the same day as the cheques were dated – June 9 – something Mr Jones said was a conspiracy.
In his closing argument a week ago, Mr Jones QC portrayed internet millionaire Dotcom as a dishonest man with a grudge against the Government and Banks.
The final act of the Banks trial drew considerable interest, with more members of the public gathered than there were seats.