News: Theft As A Servant

As these cases show, almost all employee fraud in New Zealand is committed by longer-serving personnel (because they have learned how to circumvent procedures).

Your best defence against employee fraud is to not hire people predisposed to theft in the first place. We can help!

Call or E-mail us with your questions, or to learn more about how our background screening services can safeguard your organisation.

New Zealand Cases

• Supermarket Supervisor convicted of stealing $92,000 - business almost closed
• Office Manager imprisoned for $300,000 theft – history of offending
• Office Administrator stole $166,000 for gambling
• Employee stole $2 million from Wellington IT company over 5 years
• Car dealership employee stole $1.3 million
• Lawyer sentenced for $194,000 fraud
• Rental car employee jailed for stealing $452,000
• Charity Fundraising Manager imprisoned for stealing $590,000
• Company owner loses business & home to employee fraud
• Credit Union employee stole $54,000
• Banker sentenced for $17.7 million fraud
• Defiant 30-year employee defrauds pharmaceutical company of $½ million
• Banker stole $376,000
• Staff laid off whilst colleague was stealing $460,000 from employer
• Insurance Manager jailed for $450,000 fraud
• Employee sentenced for stealing $134,000
• Survey: New Zealand ranked 8th out of 54 countries for company fraud
• Manager with unchecked false employment history jailed for $5.7 million fraud
• School principal jailed for fraud and theft from school
• General Manager jailed for $250,000 fraud
• Bank Manager jailed for 20 year fraud
• Manager resigns following audit
• Trusted Credit Union manager jailed for 7½ year fraud
• Nine bus drivers dismissed for stealing $20,000 of fares
• Long-serving Students' Association manager jailed for fraud
• Manager imprisoned for embezzling from Surf Life saving organisation
• Employee jailed for stealing $155,000 from Plunket
• Manager stole $138,000 from country’s largest childcare organisation
• Security Manager jailed for $170,000 burglary from employer
  
• Security guard stole $52,000 from employer
• CEO defrauds volunteer organisation
• CIO sentenced for stealing $16.9 million
• Bank manager jailed for $½ million fraud
• Increase in employee fraud predicted during 2009
• Bank teller stole from dying customers
• Lecturer convicted of $330,000 patent fraud
• WINZ employee convicted of fraud
• Manager jailed for defrauding employer of $609,000
• CEO jailed for $4 million fraud
• Office worker begins stealing with six weeks of joining company
• Trusted employee jailed  for two years
• Former academic convicted of forgery
• One employee fraud contributes to company’s profit falling 78%
• Results of Not-for-profit fraud survey published
• Trust worker convicted of fraud
• Security guard stole $42,000
• Director ordered to repay $44,000
• Contractor defrauded ACC of $12,500
• NZ companies report higher crime losses than other countries
• Security guard stole $55,000
• Woman defrauds a second employer of $68,000
• Office Manager ordered to repay employer $32,000
• Former Rugby League chairman jailed for $125,000 fraud
• Nurse convicted of stealing drugs
• Senior insurance officer convicted of $111,000 fraud
• Nurse convicted and struck off for theft
• Forty-five WINZ staff dismissed for $2.2 million of fraud
• Librarian steals $23,000 of rare books
• Bank teller embezzled $380,000
• Head of Women’s Refuge convicted of forgery
• Finance manager admits nine year fraud involving $2.1 million
• Nurse convicted of stealing drugs
• Pharmacist convicted of $10,000 fraud
• Nurse stole restricted drugs
• Nurse with six identities defrauded ACC of $206,000
• WINZ employee jailed for $102,000 fraud
• Refugee Agency CEO jailed for stealing $745,000
• Solicitor stole $700,000
• Credit Controller stole $84,000 from employer
• Restaurant Manager stole $16,000 from employer
• Treasurer convicted of 334 counts of fraud
• Consultant steals $2.3 million
• Finance officer jailed for stealing $447,000 from employer
  

 

Supermarket Supervisor convicted of stealing $92,000 - business almost closed
20 July 2010

Janette Kemp, a 47 year-old Supervisor at the Hawera New World supermarket has been convicted of stealing $92,680 from her employer.

As a Checkout supervisor, Kemp held an access card that allowed her to authorise the refund of returned goods, as well as the sale of alcohol and tobacco.

Kemp would take high-value products off the shelf, scan them multiple times at a checkout as being returned goods and then authorise a refund, keeping the money for herself.

The management, already concerned at a drop in profitability, became suspicious when it noticed a significant increase in the number of cartons of cigarettes being returned, a product that is generally never returned for a refund. 

When arrested, Kemp said she spent all the money gambling.

For just $120, a PVL “Integrity Test” sat by a job applicant on your own premises will assist employers identify if they are at risk of employing someone with a gambling problem, or other counter-productive behaviour like a propensity for theft or druge abuse.

Commenting on the theft, the supermarket owners said their 86 staff were victims too, as suspicion fell on all staff and nobody could be trusted, “I don’t think people realise how much damage it does, not just to us but the staff too, she was their friend, they trusted her”, said the owner who almost had to close their business because of the theft. 

This is further evidence of how essential it is for New Zealand employers to have an employment screening programme in place to assess the integrity of their staff. There is the obvious benefit to the employer in only employing honest people, but there is also the increase in morale for employees, knowing that their colleagues have been professionally screened, and can be trusted.

Contact us for a free consultation on how you can safeguard your business, and increase the morale of your staff by only employing trustworthy people.

Kemp will be sentenced on 18 August.

 

Office Manager imprisoned for $300,000 theft – history of offending
9 July 2010

Bernadine Warren, a 37 year-old Christchurch office & accounts Manager was today sentenced to 2½ years imprisonment and ordered to pay $90,000 reparation for stealing $298,537 from her employer, Tourplan Holdings.

The company’s Director said that Warren "systematically fleeced" the company for three years.

Warren began to steal within weeks of being recommended for the position by an employment agency. Some of the money was spent on her own company “Dedicated to Beauty”, a Christchurch beauty treatment business.

Had the recruitment company bothered to undertake even the most basic of background checks – a criminal records check – it would have learnt that Warren already had a history of dishonesty. In 1996  she had been convicted of stealing $60,000 from another employer and was given a suspended prison sentence.

This failure by the recruitment agency was compounded by the employer having no policy in place for reviewing the integrity of its staff from time to time – such checks would also have uncovered Warren’s previous criminal offending.

If your company has no policy for reviewing staff honesty then you are exposed to the exact same risk of theft that this Christchurch employer has suffered.  Almost all fraud is committed by longer-serving staff (because they have learnt how to circumvent procedures). 

PVL can quickly implement a staff review policy for you that will immediately reduce your exposure to employee fraud. Contact us now.

 

Office Administrator stole $166,000 for gambling
18 June 2010

Linda Anne Allan, a 60 year-old Officer Administrator who stole $166,000 from her Whangamata employer has been sentenced 7½ months' home detention and 140 hours' community work.

From September 2005 to August 2008 Allan fraudulently wrote 56 cheques, totalling $151,168.80 which she deposited into her own bank account. As well, she paid herself a further $15,031 in unauthorised salary.

The stolen money often put the building company’s account in overdraft resulting in it incurring $27,189.77 in interest charges and dishonour fees.

Allan's fraud left the company struggling to pay creditors and it spent a further $35,500 investigating the theft.

Allen spent the money on herself and her adult children, and gambled much of it away.

Peter Davison, the company owner, said Allan was recommended to him by a former employee and appeared efficient and trustworthy.

Mr Davison said it was important for employers to do background checks on potential employees and to keep close tabs on their company's accounts – Allan's offending was only discovered by chance, when she was absent on sick-leave.

 

Employee stole $2 million from Wellington IT company over 5 years
11 June 2010

Janice Johansson of Wellington was today sentenced to four years and two months imprisonment after earlier being convicted of 64 fraud and money-laundering charges involving the theft of $2,000,256.23 from her employer.

Over a five year period, the 53 year-old Finance and Administration manager made 306 fraudulent transactions from her employer’s account into personal and business accounts owned by her.

She spent much of the money on buying property, including the purchase of the Scorch-O-Rama café in Scorching Bay.

Her offending was only discovered when the company, an IT Consultancy business, noticed a downturn in profit.

When confronted in 2008, Johansson told her employer she had cancer and they gave her time to attend to her health issues before urging her to sell assets and organise repayment of the stolen money, but eventually they called police after the General Manager said she came up with "diddly-squat".

Johansson had worked for the company for nine years.  In Court, her employer said he had been shocked and saddened by Johansson, saying "I find the whole thing sad. You don't know what people are capable of."

Here at PVL we are no longer shocked by employee fraud and what people are capable of, but we are shocked at the repeated failure of New Zealand businesses to recognise the need to have policies in place for verifying the honesty of their employees.

Clearly Johansson got away with this fraud for more than five years because her employer had no such procedures.

Don’t become a victim in the way this IT company became.  We can assist you in implementing an employment screening and due-diligence review programme that will help protect you from employee fraud. Contact PVL today

 

Car dealership employee stole $1.3 million
18 May 2010

Michelle Campbell, a 42 year-old Business Manager employed by Tauranga motor vehicle dealer Ebbett Tauranga Ltd was today convicted of 61 fraud offences against her employer.  

From September 2006 to February 2010, Campbell deposited $1,315, 807.70 worth of customer cheques into her own bank account, as well as stealing a further $46,685 in cash from her employer.

When customers paid for vehicle purchases with a cheque she told them to leave the payee details blank so she could imprint the company’s name with a rubber stamp. But instead, Campbell made the cheques out to “Cash”.

Campbell’s 3½ year-long offending was not discovered by her employer. Instead, a bank was alerted when one of its customer’s cheques for $25,000 and made out to “Cash”, had been deposited into Campbell’s account.

Michelle Campbell will be sentenced on 16 August.

Lawyer sentenced for $194,000 fraud
7 May 2010    

Emma Jane Garnett, a 36 year-old Auckland lawyer was originally sentenced in April 2009 to three years imprisonment after being convicted of eight fraud charges involving the theft of $194,586.27 of clients’ money.

Over a period of five years, to April 2007, Garnett, who was a senior lawyer and later a partner in an Auckland law firm (earning a six-figure salary), fraudulently transferred funds from clients’ accounts, to herself. She used the money to pay personal expenses.

The fraud was exposed after she left the partnership but Garnett continued her offending working for another Auckland law firm.

Emma Garnett went to considerable lengths to avoid responsibility for her crimes. When first charged in August 2007 she succeeded in having her name, occupation and even the charges, publicly suppressed. Her former employer tried, unsuccessfully, to have Garnett’s interim name suppression order lifted.

When the order was due to lapse in March 2008, Garnett appealed to the High Court to extend name suppression, arguing that the publicity would seriously undermine her health, that of her newborn son, and the health and reputation of her mother, who is a local Government politician.

Her appeal was dismissed and Garnett was publicly identified in July 2008, almost a year after being charged.

The absence of any remorse was evident by Garnett only sending letters of apology to her victims 18 months after her arrest, and one week before sentencing. Reparation of $194,586 was sought, but Garnett made no realistic offer to repay the money and the Court did not order that she do so.

Garnett appealed her sentence in March 2010 but the Crown argued she had taken advantage of her privileged position, committed serious white-collar crime and brought the legal profession into disrepute. Garnett still denied responsibility and had still not paid back any of the money she stole.

However, in a decision released today, the Court of Appeal replaced her prison sentence with what it termed an "extremely lenient" sentence of 11 months' home detention and 30 hours community service.

 

Rental car employee jailed for stealing $452,000
28 April 2010

Jacqueline de Berri, a 48 year-old Credit Controller, has been sentenced to 28 months imprisonment for stealing $452,206 from her employer, the Hertz rental car company office at Christchurch Airport.

On 12 occasions over a five month period, de Berri transferred all the money to a “solicitor” in Spain, who had earlier sent her an E-mail saying she was in line to receive an unclaimed $21 million inheritance.

It was of course a scam, but Jacqueline Louise de Berri, who had worked for Hertz for more than 13 years, decided to steal her employer's money, rather than use her own. The sentencing Judge described the offending as "extremely serious" with an element of greed.

There is no prospect of de Berri repaying any of the money she stole.

 

Charity Fundraising Manager imprisoned for stealing $590,000
26 March 2010

Lynn Fiebig, the 56 year-old National Fundraising Manager of the IHC was today sentenced to three years imprisonment having earlier been convicted on 72 charges of defrauding her employer and money laundering. The sentencing Judge described the offending as a gross breach of trust that was persistent and clearly premeditated.

The IHC (formerly known as the New Zealand Society for the Intellectually Handicapped) is New Zealand’s largest provider of support and accommodation for those with intellectual disabilities

Fiebig was employed by the IHC in 2003 as a fund raiser but by the time she was promoted to National Fundraising Manager in 2007, she had already been stealing from the IHC for a year.

Her delegated authority allowed her to approve the payment of invoices up to the value of $10,000 and on 74 occasions she authorised payments totalling $590,029 to bogus companies she had created, with the money being transferred into bank accounts in her name, and the Ahura Lodge, a five-star luxury resort at Ohakune, National Park, that she and her partner own. The offending continued on for 2½ years, until she was finally caught in May 2009.

In January 2008, Fiebig was the author of an IHC submission to the Inland Revenue Department seeking an easier way for employees and employers to donate money to charities, using direct credit, through their payroll systems.

Fiebig has made no attempt to repay the money she stole.

 

Company owner loses business & home to employee fraud
26 March 2010

The owners of a Tokoroa company have lost their business and home, and owe $38,000 to Inland Revenue for overdue GST payments after their 62 year-old Office Manager stole $72,230.

The manager, described as a “prominent” South Waikato resident at her first Court appearance, defrauded the company over an 18 month period by mis-using her Internet banking access to the company’s accounts.

She was charged with 43 fraud-related offences, but failed to appear in Court on 27 April 2009.  A Warrant for her arrest was issued and interim name suppression was lifted identifying her as Wendy Anne Fellingham (also known as Wendy Anne McCormack), a practising wedding celebrant who previously operated “Timeless Choice” - a now-closed wedding and party hire service in Tokoroa. Some of the money she stole was paid directly into her own company.

Appearing in Court for sentencing today, Fellingham originally offered to repay the money at the rate of $15 a week but the Judge described the amount as "ludicrous and derisory" and said unless a larger repayment was agreed to, he would impose a two-year jail sentence.

Fellingham increased her reparations offer to $100 per week which the Judge accepted, as well as sentencing her to 12 months home detention so she could earn money from home as a Telemarketer and begin repaying the money she had stolen.

This case again demonstrates the need for all employers, no matter the size of their business, to undertake background checks when hiring staff.

Had the company sought an assessment of Fellingham from a pre employment screening company, they would have learnt she had a history of dishonesty and had earlier been convicted in 2001 for stealing from a previous employer.

 

Credit Union employee stole $54,000
22 March 2010

Natasha Maree Moana Dewes, a 23 year-old Gisborne Credit Union employee has been convicted of stealing $54,284 from her employer. The offending involved Dewes making 160 fraudulent transactions over a two year period

The Prosecutor said an aggravating feature of the offending was the number of transactions that took place and that there was no willingness to repay any of the money stolen.

Natasha Dewes was sentenced to six months home detention, 180 hours community service and ordered to pay $5000 reparation.

 

Banker sentenced for $17.7 million fraud
18 March 2010

Stephen Versalko, a 52 year-old Auckland ASB Bank investment banker was today sentenced to six years imprisonment for the country's largest known employee theft. He must serve a minimum non-parole period of 4 years.

Between 2000 and 2009, Versalko made 123 fraudulent transactions which resulted in 30 ASB customers being defrauded of $17,763,110.  
He spent the money on a $3.2 million home in Remuera, a $1.8 million beach front holiday home at Whangapoua in the Coromandel, 1200 bottles of wine to the value of $300,000, and $4.2 million on two prostitutes.

Versalko was only caught because one of his clients after seeing a TV documentary about US billion dollar fraudster Bernie Madoff noticed similarities between the way in which Madoff treated his clients, and the way in which she had been treated by Versalko.  Versalko had promised her higher than normal interest rates, assured her that no taxes or fees were payable, and she had never had contact with any other ASB employee.  

She decided to contact the ASB to confirm that her investment of $3 million was secure. The bank told her it had no record of her investment at all.

Versalko’s fraud made a major contribution to the ASB’s reported $10 million loss in the second half of last year (its first loss in over two decades) as it was required to reimburse $16.5 million to the defrauded clients. Only $4 million was recovered from Versalko.

We can only assume that a major bank would have had in place sophisticated accounting practices and audit trails.  In this case they were insufficient probably because Versalko committed his crimes by using the ASB’s name but conducting his business outside the bank’s framework.

This case demonstrates, once again, how essential it is for New Zealand employers to have policies in place to verify and regularly review the honesty and trustworthiness of its staff.

A regular component of PVL’s services is the undertaking of “due diligence” reviews of the integrity of employees.

Contact us if you would like us to develop and implement a policy for your business.

 

Defiant 30-year employee defrauds pharmaceutical company of $½ million
8 March 2010

Selwyn Love, the Palmerston North Managing Director of the New Zealand division of German-owned pharmaceutical company Merck NZ Ltd, has been sentenced to four years imprisonment for defrauding his employer of $509,975.

Love had worked for Merck for over 30 years and was appointed its Managing Director in 1994. His salary was paid by the company’s external accountants but from 2000 onwards Love submitted documents to the accountant that overstated the remuneration the Board in Germany had approved for payment to him. His approved salary was $7,000 per month but the papers he forward to the accountant stated his salary was $12,000 per month.

Love was ordered to pay $60,000 reparation within three years, however, during sentencing he said he could not make reparation as he had no assets – he claimed they were all jointly owned with his wife or by a family trust and he was not prepared to ask the trustees to dispose of its assets to pay reparation.

 

Banker stole $376,000
19 February 2010

Emma Joanne O'Dowda, a 40 year-old Dunedin National Bank consultant (Moray Place branch) was today sentenced to 2½ years imprisonment for stealing $376,000 from her employer.

On 11 occasions, O'Dowda fraudulently drew up a total of $2 million in loans in the names of genuine unsuspecting business customers of the bank. She then paid the original loans back by approving further new loans, but in the process kept $376,000 for herself

She sometimes chose customers she knew would not check their accounts, but in one instance she disabled a customer's internet banking and had statements from their account redirected to her workplace, to prevent the customer finding out.

The offending occurred over a three year period and was only discovered by chance, when a bank employee noticed the lending discrepancies.

The Judge noted the bulk of the money had been spent on luxury items. None of the stolen money was recovered.

 

Staff laid off whilst colleague was stealing $460,000 from employer
12 February 2010

Toni Anne Whatarau has been sentenced to three years imprisonment for stealing $460,862.71 from her employer between April 2007 and October 2009.

Forty-six year-old Whatarau was employed to manage the office accounts but in the process made 278 transactions from the company's bank account to her own account. To disguise her offending she inserted a creditor's name or labelled the transfers as being tax payments to Inland Revenue.

Her offending was only discovered when the owner became aware of the company’s poor cash flow and had to lay off staff and reduce the hours of others, to keep the business afloat. The owner originally thought the company’s financial problems were due to the economic recession.

When discovered, Whatarau admitted to stealing the money, claiming she had a gambling addiction and had lost the money on pokie machine throughout the Hawkes Bay region. Whatarau has only offered to repay $3,000 of the money she stole. The name of her employer was suppressed to reduce its embarrassment.

Companies can minimise the risk of hiring employees with gambling problems by having their job applicants sit PVL’s “Integrity Test”.

This 20-minute test will accurately identify if you are about to hire a problem gambler. Contact us for a demonstration.

 

Insurance Manager jailed for $450,000 fraud
18 December 2009

Dion Nukunuku, a 39 year-old Auckland-based Tower Insurance Claims Manager has been sentenced to three years imprisonment for defrauding his employer of $449,555.

During the periods 2002 to 2004, and 2007 to 2009, Nukunuku filed 46 false insurance claims using the names of 16 genuine clients, as well as his own name. He approved the bogus claims and wrote company cheques out to himself.

The offending was only discovered after Nukunuku left the company.

Nukunuku is a three-time world champion softball player in 1996, 2000 and 2004, and a 2007 softball personality of the year.

Tower Insurance sought reparation, but Nukunuku’s lawyer said his client was addicted to horse race betting, and all the money had been gambled away.

Employee sentenced for stealing $134,000
17 December 2009

Vanessa Joan Orr, a 33 year-old Christchurch transport company employee was today sentenced for stealing $134,180 from her employer over a three year period. The offending involved 95 fraudulent transactions.

Orr offered to repay the money at $70 per week but that would have taken 37 years and her employer would have been 92 years old before reparation was completed.

The Judge described the offer as an insult and instead ordered Orr to pay $90,000 from the proceeds of a house sale, and to repay the remaining $44,680 at the rate of $100 a week, with that sum to be reviewed in three months to establish if larger payments could be made. He further ordered her to serve seven months home detention.

 

Survey: New Zealand ranked 8th out of 54 countries for company fraud
20 November 2009

Price Waterhouse Coopers has released its fifth biennial Economic Crime Report surveying more than 3,000 organisations in 54 countries. Eighty-five organisations in New Zealand took part.

The results disclosed New Zealand had the eighth highest reported level of fraud, with 42% of the NZ respondents saying that they suffered from some form of economic crime in the last 12 months. The global average was 30%.

The average cost of fraud in New Zealand was $491,506 and the most common collateral damage arising from the fraud was the effect on employee morale and damage to the company’s brand or reputation.

Since their last New Zealand survey in 2007, PWC has detected a significant increase in fraud committed by middle and senior management; as such individuals are more able to override controls within an organisation. A third of all the frauds were only detected by chance.

Irrespective of the internal audit and detection systems that a company might have in place to prevent employee fraud, the most reliable and cost effective solution is to reduce to a minimum the risk of employing an untrustworthy person in the first place.

This is best accomplished by engaging a professional employment screening company to verify the honesty and veracity of your future employees.

 

Manager with unchecked false employment history jailed for $5.7 million fraud
12 November 2009

Scott Alwyn Mackenzie (also known as Scot Mckenzie), a 29 year-old Auckland Property Manager, has been sentenced to three years and eight month imprisonment after earlier being convicted of ten charges of defrauding his employer, and a bank.

Mackenzie commenced working for the Omara Property Group in 2006 after submitting a CV that included a false employment history.

Over the next two years Mackenzie fraudulently created 129 bogus invoices worth $1.6 million that his employer and associated companies unwittingly paid to three companies controlled by Mackenzie/Mckenzie.

Mackenzie was also convicted of a $3.5 million mortgage fraud against a bank. He purchased six properties with loans from the bank by creating false documents that exaggerated his income.

He was also convicted of submitting false GST returns that resulted in Inland Revenue paying him $510,000.

This case again demonstrates the need for New Zealand companies to recognise the importance of practicing due diligence when hiring staff. 

Had his employer engaged the services of a pre employment screening company, Mackenzie’s false work history, his use of an alias and the obvious conflict of interest in his owing three property construction businesses of his own, might have alerted the company to his unsuitability and so have avoided it being defrauded of $1.6 million.

 

School principal jailed for fraud and theft from school
22 October 2009

Barry Andrew Bloomfield, the 56 year-old principal of Huntly West School was today sentenced to 12 months imprisonment after earlier being convicted of using a document for pecuniary advantage.

Bloomfield falsely claimed to have employed a former colleague as a relieving teacher for the school, but the teacher never taught at the school and was not even living in New Zealand at the time. Bloomfield operated a bank account in the name of his former colleague and the Ministry of Education subsequently paid a total of $17,416 in salary into the account.

Bloomfield was also convicted on charges of theft. He sold school property through an on-line auction site, claimed there were no interested buyers and had disposed of the property for $80. In fact, Bloomfield sold the property for $4600 and kept the money for himself.

 

General Manager jailed for $250,000 fraud
2 October 2009

Kenneth James Green, the 51 year-old former General Manager of corporate infrastructure at Northpower (a Northland-based power company) was today sentenced to 2½ years imprisonment for defrauding his employer of $250,000

Green was employed by Northpower in January 2007 where his duties included “risk prevention and minimisation” for the company.  But instead of minimising the company’s risks he set about defrauding it, just three weeks after he began his $190,000 per annum job.

He arranged for a company called Implied Technologies Ltd (ITL) to be added to Northpower’s list of suppliers and during the next 14 months ITL invoiced Northpower on 32 different occasions for a total of $259,324. In fact, ITL’s account belonged to Magix Consulting Ltd, a company wholly-owned by Green. The money paid by Northpower to ITL was transferred by Green directly into his own personal bank account.

Ken Green was dismissed in May 2008 and the next day applied to the Accident Compensation Corporation for weekly compensation, saying he had injured his back. His claim was approved and he began receiving weekly payments of $1,172 from ACC. The following month Green registered a new company and secured a six-month contract as an IT consultant without disclosing this to ACC.

He continued to claim ACC payments, providing seven medical certificates which deemed him "fully unfit for work" between May and October 2008. By the time ACC became aware of discrepancies in his claim Green had received $20,351 in payments.

On 14 September Green was stopped at Auckland International Airport and subsequently arrested. Within two weeks he had applied for legal aid stating he had no current income with which to defend himself against the fraud charges.

 

Bank Manager jailed for 20 year fraud
24 September 2009

Heather Scott, a 54 year-old Invercargill and Alexandra Westpac Bank Manager was today sentenced to three years imprisonment after earlier being convicted of 33 representative charges of defrauding her employer of $463,498.

Scott began her offending in 1989 when without their knowledge, she opened nine accounts in the names of friends, relatives, and even her husband.

Utilising internal bank procedures that allowed for temporary overdrafts on uncleared funds within customers’ accounts, Scott repeatedly forged signatures, raised loans and transferred money between the accounts over two decades to conceal her forgery and stealing. Almost all the money was spent on gambling.

 

Manager resigns following audit
14 September 2009

Lorraine Coulston, manager of the Hutt Valley Youth Health Trust (also known as Vibe), has resigned following an audit of the Trust’s accounts that disclosed more than $97,000 of its funds had been spent on questionable expenses.  

In a story today, the Wellington “Dominon-Post” newspaper reported that Coulston spent more than $20,000 of the Trusts’ money to fund lavish shopping sprees whilst the Trust struggled to pay its staff’s salaries on time.

After initially claiming she had bought clothes for clients to wear to job interviews, Coulston admitted misappropriating $20,870.86 through a corporate credit card, but the auditors discovered thousands more dollars unaccounted for. Large sums were also transferred electronically to bank accounts belonging to Coulston.

Another employee, unnamed, also resigned when a similar pattern of doubtful spending, and payments to her personal bank account, was uncovered.

The women also paid their children $70 an hour to clean the Trust’s office. More than $7,000 of the Trusts money was paid to the children for cleaning services.

Vibe is a tax-payer funded organisation that last year received more than $1.4 million in Government funding. It often ran short of cash and was repeatedly penalised by Inland Revenue for filing late returns. Senior staff were sometimes paid late. Twice in January 2008, Coulston "loaned" $30,000 of her own money to cover the wages bill. At the same time, thousands of dollars were spent on staff meetings in cafes, gym memberships, leaving gifts and parties.

This case raises issues about the competence of such Boards (one Board member is a 19 year-old student) to adequately maintain oversight and control of senior staff. The auditors said poor controls and the culture provided ample opportunity for fraud to be committed and the opportunities were seized upon. The Board was also criticised for taking months to inform funders of the fraud.

 

Trusted Credit Union manager jailed for 7½ year fraud
10 August 2009

Anthony Raymond Wilbraham, the 44 year-old manager of a local credit union branch in Mt. Maunganui was today sentenced to three years imprisonment.

Wilbraham pleaded guilty to 44 fraud and dishonesty charges involving the theft of more than $280,000 from his employer. The offending which first began in February 2001, involved Wilbraham stealing the identities of existing customers, creating loan accounts in their names and then withdrawing the money for his own use.

The Credit Union’s CEO described Wilbraham’s actions as being “robbed by a brother”.  Wilbraham was adjudged bankrupt in March 2009. There is no possibility of the stolen money being repaid to the Credit Union.

 

Property Manager with unchecked false employment history convicted of $5.7 million fraud
31 July 2009

Scott Alwyn Mackenzie (also known as Scot Mckenzie), a 29 year-old Auckland Property Manager, has been convicted of 10 charges of defrauding his employer, and a bank.

Mackenzie commenced working for the Omara Property Group in 2006 after submitting a CV that included a false employment history.

Over the next two years Mackenzie fraudulently created 129 bogus invoices worth $1.6 million that his employer, and associated companies, unwittingly paid to three companies controlled by Scott/Scot/Mackenzie/Mckenzie.

Mackenzie was also convicted of a $3.5 million mortgage fraud against a bank. He purchased eight properties with loans from a major trading bank by creating false documents that exaggerated his income.

He was also convicted of submitting false GST returns that resulted in Inland Revenue paying him a refund of $510,000.

This case again demonstrates the need for New Zealand companies to recognise the importance of practicing due diligence when hiring staff.  

Had his employer engaged the services of a pre employment screening company, Mackenzie’s false work history, use of an alias, and the conflict of interest inherent in his ownership of three property construction businesses, would have alerted the company to his unsuitability and avoided it being defrauded of $1.6 million.

Mackenzie has been remanded in custody for sentencing on 5 November 2009.

Nine bus drivers dismissed for stealing $20,000 of fares
8 July 2009

Nine Wellington bus drivers have been dismissed for allegedly stealing at least $20,000 in bus fares over an eight week period.

Go Wellington, the company that operates the bus service has announced it will not lay criminal charges if the money is paid back

Previously, more than $500,000 had gone missing over a three year period, until a new fare collection system was introduced.

And before that, in 1999, three drivers were convicted of stealing almost $110,000 over four years.

 

Long-serving Students' Association manager jailed for fraud
19 June 2009

Helen Frances Lenihan, the 55 year-old manager of the Christchurch Polytechnic Students' Association has been sentenced to 22 months imprisonment for defrauding the Association of $175,000.

The offending spanned a period of five years and involved Lenihan paying herself more than her salary allowed, using the Association's account to pay her rent, and writing cheques out to herself.

Lenihan repaid $50,000 but there is no prospect of the outstanding $125,000 being recovered.

Helen Lenihan had worked for the Association for more than 18 years.

 

Manager imprisoned for embezzling from Surf Life saving organisation
29 May 2009

Alison Douglas, the 65 year-old District Manager of Surf Life Saving Taranaki, has been sentenced to 3½ years imprisonment after earlier being found guilty of 41 forgery, theft and embezzlement charges totalling $205,548.

Douglas was only caught when the Inland Revenue Department contacted the organisation’s Chairman seeking $108,000 in unpaid income tax payments that had been owing for several years.

The subsequent investigation revealed that Douglas, who had sole responsibility for the organisation's funds, overpaid herself $198,764 during the ten-year period 1998-2008.

She also spent a further $6,783 in unauthorised domestic and international travel for herself, her son and his partner.

Douglas managed to conceal her decade-long offending by repeatedly producing false audit reports that had supposedly been prepared by an Accountant, but which in truth she created with forged letterheads and signatures.

The extent of her criminal activity almost resulted in the organisation, which provides life guards for Taranaki beaches, becoming insolvent. Only 12 months earlier Douglas had been conferred life membership of the organisation.

Had the organisation engaged a pre employment screening provider before appointing her, it would have learnt that Douglas had previous convictions for theft as a servant, cheque forgery, and property theft.

There is no likelihood of Douglas repaying the money she stole from the Surf Life saving organisation.

 

Employee jailed for stealing $155,000 from children's charity
20 May 2009

Michelle Margaret Hyndman, the 38 year-old Treasurer of the Tauranga branch of the Plunket Society was today sentenced to 2½ years imprisonment.

Hyndman had earlier pleaded guilty to 421 fraud charges involving the theft of $155,367 from the 100 year-old not-for-profit society which sees over 90% of newborn babies in New Zealand each year.

Hyndman managed the Tauranga branch’s accounts, but over a four year period she also fraudulently wrote out cheques to herself, often in her maiden name and forged another person's signature before depositing the cheques into her own bank account. None of the money has been recovered.

Michelle Hyndman was further ordered to pay $25,000 reparations when released from prison, at the rate of $50 per week.

 

Manager stole $138,000 from country’s largest childcare organisation
15 May 2009

Katrina Maree Scopas, Operations Manager for Kidicorp, has been convicted of 10 fraud charges involving the theft of $138,300 from the company.

Kidicorp is the largest childcare provider in New Zealand, with almost 100 childcare facilities throughout the country, and responsible for the care of 9,000 children.

Scopas began stealing from the company almost immediately after she was appointed its Operations Manager in November 2007 and her offending continued for a year, before by chance, another employee became suspicious of her behaviour.

 

Security Manager jailed for $170,000 burglary from employer
1 May 2009

Stanley William Tunnicliffe, the 47 year-old manager of Armourguard’s Blenheim branch was today sentenced to 3½ years imprisonment for stealing $170,000 from his employer’s premises by cutting a hole in the wall of the building in the early hours of 14 January.

The Police recovered some of the money, but $37,000 remains outstanding. Tunnicliffe, who was employed by Armourguard Security three years ago, offered $2,000 in reparation, which the Judge ordered him to pay.

Stanley Tunnicliffe already had two convictions for dishonesty offences from the late 1980’s but his criminal history did not prevent him from being approved for a Security Guard’s licence because the Criminal Records (Clean Slate) Act allowed him to conceal these convictions as they did not involve a custodial sentence, and were more than seven years old when Armouguard employed him.

 

 

Security guard stole $52,000 from employer
1 April 2009

Peter Emery-Jones, a 51 year-old Nelson security guard has been sentenced to 18 months prison after being convicted of two charges of stealing $52,000 from his employer, Cochise Security.

The company replenished ATMs at banks in Nelson and Emery-Jones used his inside knowledge of the procedures to steal the money. He had been an employee of the company for nine years.

Emery-Jones was also ordered to immediately pay $10,000 reparation but when that was not forthcoming the Judge ordered that his Harley-Davidson motorcycle be seized. Emery-Jones had earlier sought to conceal ownership of the bike by transferring it into someone else's name, but a Warrant was nonetheless issued and the bike seized.

The $42,000 balance of the stolen money is to be paid back at $50 a week once Emery-Jones is released from prison.

 

CEO defrauds volunteer organisation
20 March 2009

Joan Dorothy Roberts, the 71 year-old Auckland Chief Executive Officer of the Aotearoa Mature Employment Service (AMES) has been convicted of fraud and theft charges totalling $1.09 million. AMES is a voluntary organisation that assists older workers retrain and find re-employment.

Joan Roberts offending, which occurred over a five year period, included stealing up to $250,000 from AMES; using her employer’s cheque account to facilitate the issuing of a bank cheque for $58,000; and obtaining by deception, loans totalling $782,000 from three finance institutions.

Roberts used the money, to buy a house and purchase a hardware store on Waiheke Island, Auckland.

The Prosecutor did not seek a jail term even though he said the fraud was serious enough to justify one. There had been a full and final settlement paid by Roberts, who had no previous convictions and was in poor health.

In sentencing Roberts to 10 months home detention, the Judge described her use of AMES money to buy the house as pure greed and as a consequence AMES almost became insolvent.

AMES management were quoted as saying they were in complete disbelief at the offending and that Roberts had been “like one of the family."

 

CIO sentenced for stealing $16.9 million
11 March 2009

Michael Andrew Swann was today sentenced to 9½ years imprisonment with a minimum non-parole period of 4½ years.

The 47 year-old former Chief Information Officer was earlier found guilty of defrauding his employer of $16.9 million.  It is the largest known employee fraud of taxpayers money ever committed in New Zealand.

In 2006, Michael Swann was sacked by the Otago Health Board for “gross mismanagement”.  As CIO, he had been invoicing two companies (Harford Sonntag and Associates, and later, Sonnford Solutions), owned by his associate Kerry Gray Harford (a 48 year-old Queenstown property surveyor with no IT experience), for computer maintenance and software licence agreements.

Although 198 invoices were created and these services were never provided, the two companies received payments from the Health Board totalling $16,902,145. In fact the Health Board was already receiving these services under existing agreements with IBM.

Harford retained 10% of the money and forwarded the remaining $15.2 million to Computer South Ltd, a company controlled by Swann.  He was a signatory to the company's bank account, and was in full control of its funds. Harford was also sentenced today, receiving a 4¼ year prison term. (PVL Comment 26 April 2010: Harford only served 58 weeks in prison – he was released three days after becoming eligible for parole).

The Health Board has asset-protection orders against property owned by Swann including, 30 vehicles, mostly luxury cars such as Lamborghini’s and Porsches'; several boats, including the 50-metre launch “Townsend Cromwell”; property in Wanaka including a substantial home; a residence in Dunedin (with a Government valuation of $1.1 million); and a property in Central Otago.

Swann’s salary whilst working for the Health Board had been $145,000 a year, but he was receiving an average $43,000 a week from his frauds. The offending spanned more than six years.

An aggravating feature of this case was the Health Board’s failure to ensure that Swann was a fit and proper person to have control of such large sums of public money, and its failure to monitor his delegated authorities over such a long period of time. 

When Swann was being considered for appointment, the Board should have been aware that he was a former bankrupt. The Board has admitted in a briefing to the new Minister of Health that no verification of Swann’s background was undertaken before he was employed.

Had it engaged a professional pre-employment screening company, they certainly would have been made aware of his circumstances.  Having taken that precaution, the Board may have avoided the stigma of becoming the victim of the largest employee fraud of taxpayers money reported in this country.  

The Board has also paid $1.3 million investigating and prosecuting the case - increasing the total cost to $18.2 million. The $1.3m comprised $890,000 in legal fees and $420,000 in other costs such as the recovery, storage, security and valuation of Swann and Harford’s assets, including the cost of returning a yacht from Fiji.

PVL Update (11 February 2010): Last October, a life-long friend of Swann’s, 48 year-old Robin Sew Hoy pleaded guilty to corruption under the Secret Commissions Act and was later sentenced to 10 months' home detention and ordered to repay $325,000 to the Otago Health Board.

During the period 2000-2008, Sew Hoy paid Swann “kick-backs” totalling $757,685 in return for ensuring his company, “Innovative Systems Ltd, was awarded a $4.7 million contract for providing the Health Board with IT help desk support. The arrangement was that for every hour charged out at $95, Swann would receive $25. At the time most hospital boards were paying $56 an hour for outside IT support.

When the corrupt payments were discovered the Health Board terminated the contract and made an immediate saving of about $500,000 a year by employing the same three people who had been providing the service on behalf of Sew Hoy.

Swann denied accepting inducements from Sew Hoy and had been due to stand trial in March 2010, but on 17 December 2009 following Sew Hoy’s sentencing, he changed his plea to guilty.

Swann was today sentenced to 20 months prison, to be served concurrently with his current sentence. Swann's lawyer also said there was no more than $5 million in assets available to repay the $17 million he had stolen.

PVL was asked by the ”National Business Review” to comment on the Swann fraud case. Read NBR correspondent Mark Peart’s article here>>

$17m hospital scam: Business must learn from governance failure (pdf 600Kb)

printer friendly version (pdf 59Kb)

 

Bank manager jailed for $½ million fraud
10 March 2009

Shona Bullen, a 47 year-old Bank Manager at the Tauranga National Bank has been sentenced to 2½ years imprisonment for defrauding her employer of $515,000.

On eight occasions during the 4½ years she was employed by the National Bank, Bullen fraudulently approved and created $595,000 worth of mortgages against her Father’s account, later spending $515,000 of it on herself and her family. Bank policy prohibited staff from performing any transactions on the accounts of family members.

The largest single loan she approved was $175,000 in May 2007. Three months later the bank promoted her to a regional manager’s position, responsible for much of the central North Island.

PVL update (28 August 2009): Bullen was convicted of further fraud offences today, having pled guilty to deceptively obtaining credit to the total value of $279,515 from another bank, deceptively obtaining ownership of a Whakatane property and forging a property transfer document.   She will be sentenced in late November. 

 

Increase in employee fraud predicted during 2009
10 February 2009

KPMG's biannual fraud survey released today has revealed that during the period 2006-08 New Zealand company respondents reported fraud losses amounting to $21.5 million (Court reporting last year totalled $71 million). 

Fifteen percent of employees involved in fraudulent conduct had a history of dishonesty with previous employers. On average, each of the 70 companies participating in the survey lost $620,000, which many smaller businesses would struggle to absorb.

KPMG's report noted  “this experience reinforced the value of ensuring pre-employment screening, a relatively inexpensive fraud prevention procedure, as a standard component of the hiring process”.

Many of the frauds involved false invoicing, theft of cash and consumables, and false loans. Typically the money had already been spent before the fraud was discovered and just two per cent of it was ever recovered.

KPMG noted that when jobs were at risk or staff came under financial pressure to meet personal bills, as is being predicted with the current recession, that it often signalled an increase in staff fraud.

You can read KPMG’s report on their website here>>

 

Bank teller stole from dying customers
19 November 2008

Twenty-four year-old Bank teller, Shelley Anne Williamson has been convicted of stealing $135,000 from the Wanaka branch of  the Bank of New Zealand.

Over a 2½ year period Williamson stole $60,000 from inactive bank accounts belonging to customers known by the staff to be dying, or believed to be already dead. She also accessed an in-house foreign currency account on more than 140 occasions, stealing a total of $73,883.

In 2006, Williamson had been voted the BNZ’s Australasian Teller of the Year.

Shelley Williamson was sentenced to nine months' home detention and ordered to repay $135,858 to the Bank, and also $21,766 in reparations to a couple whose car was damaged when she intentionally drove head-on into it at speed after being confronted by the Bank Manager about the thefts.

 

Lecturer convicted of $330,000 patent fraud
18 November 2008

Martin Alexander Hall, formerly a lecturer at Auckland Unitec’s Applied Technology Institute, has been convicted of 23 charges of fraud and sentenced to 10 months home detention.

While employed by the Institute, Hall transferred three patents, owned by his employer and worth $300,000, to a company controlled by himself , Applied Science Research Foundation Ltd, without Unitec’s knowledge or consent.

The Patent Attorney who conducted the transaction thought it was acting on behalf of Unitec and Hall fraudulently authorised Unitec’s Finance department to pay their $30,000 account. Martin Hall also approved a payment of $9,000 by Unitec, for goods and services that were expenses incurred by his company.

 

WINZ employee convicted of fraud
29 October 2008

Ravichandiren Nara of Christchurch was convicted of six charges of receiving a social welfare benefit whilst simultaneously being an employee of the department. He was sentenced to 200 hours Community Work and ordered to repay $1220.

It also emerged that whilst working for Work and Income New Zealand as a Case Manager and unlawfully claiming a welfare benefit, he also took on work as a nurse without disclosing it to his employer. He is now facing Nursing Council charges as a consequence of his court appearance.

Earlier, in 2002, the Nursing Council found a person named Ravichandiren Nara guilty of inappropriate and indecent conduct towards a vulnerable mental health patient. He was struck off the Nursing Register and ordered to pay more than $13,000 towards the cost of the hearing.

 

Manager jailed for defrauding employer of $609,000
16 October 2008

A 37 year-old Manager was convicted of defrauding Auckland University of $609,502.92 over a 28-month period by submitting phoney invoices in the name of legitimate companies. Katherine Ann Henry then deposited the money into her bank account, and that of an accomplice.

The fraud was only discovered when the financial performance of the department Henry worked in came under scrutiny because it had exceeded its budget.

None of the money was recovered with a large amount of it having been spent on gambling. Katherine Henry was sentenced to 2½ years imprisonment.

 

CEO jailed for $4 million fraud
3 October 2008

Blair John Fitzsimons, a 40 year-old former Managing Director of Napier company Pioneer Insurance has been convicted of defrauding his employer of $3 million over an 11 month period. The scale of the theft resulted in the company almost going bankrupt.

He also took out a $586,000 loan with a finance company, in his employer’s name, and deceived a local bank into allowing him to withdraw $500,000, which he did not have. The total fraud amounted to $4,086,000.

Blair Fitzsimons used the money to fund his own business, Xpress Vehicle Rentals, which is now in liquidation owing approximately $4.8 million to creditors. He was sentenced to 4½ years imprisonment and ordered to pay $250,000 in reparation.

PVL update (22 January 2009): Two of Pioneer’s original shareholders have failed to stop a bank from selling their home under mortgagee sale. They had borrowed against the house to raise the capital needed to set up the company, but now had to pay for Fitzsimons thefts.

The shareholders claimed in the High Court that their predicament was due to the bank’s failure to protect their money from fraud but the Judge ruled that there was “no credible basis for the injunction".

 

Office worker begins stealing with six weeks of joining company
1 October 2008

Julia Catherine Davis, a 40 year-old Hamilton office administrator has been convicted of stealing $277,000 from her employer.

Davis was employed in June 2000 by a road signage installer, but within six weeks of joining the company she had begun stealing from it and the offending continued undetected for the next five years. She used the money to build a home, and a children's playhouse.

Davis was sentenced to four years imprisonment

Trusted employee jailed  for two years
1 July 2008

Barry Harvey Smith, a 66 year-old Christchurch man who had worked for the same company for more than 22 years was sentenced to 2 years and one month’s imprisonment after pleading guilty to stealing $684,278 from his former employer over a 15 year period.

The offending of Barry Smith was only discovered after he had retired from the company earlier this year.  The company was reportedly shocked to discover the theft, and that it had been committed by such a long serving trusted employee.  

Former academic convicted of forgery
18 June 2008

Dr David Maurice Guy, a former Director of External Relations at Waikato University, has been convicted of forgery.

The 63 year-old had worked at the university for 27 years until being dismissed in 2000 when it was discovered that a year earlier he had created a phoney invoice requesting the university pay $22,500 to a company known as CFS Services that had supposedly undertaken work for the university.

Guy had convinced the Finance Department to give him the cheque, which he said he would pass to the company, but he then deposited the money into his own bank account. When the university discovered the fraud, Guy repaid the money and was dismissed from his position.

A subsequent audit uncovered further fraud, notably the falsification of overseas travel claims amounting to more than $5,000. The university laid a complaint with the Police later in 2000 but by that time Guy had left the country and obtained a position at the University of Bath, England.

Earlier this week David Guy re-entered New Zealand for a brief visit and was arrested. He pleaded guilty to three charges of forgery and was fined $5,000 and ordered to repay the University $5,322.85 in reparations. Guy intends returning to his job in England.

One employee fraud contributes to company’s profit falling 78%
22 April 2008

Six months ago, Turners Auctions reported a drop in half-year profit after being hit by fraud and a harsh second-hand car market. Revenue for the six months to June 2007 increased 4 per cent, but net profit fell 78 per cent to $524,000.

The result included a $1.2 million provision for an alleged fraud committed by a former employee between 1999 and 2006, costing the company $2.8 million in total.

At the time, Turners CEO said the company was focused on remedying its internal control systems and investigating avenues to recover the stolen money.

This fraud had its sequel today in Auckland when the Company’s Accountant, Christopher Sue, was sentenced to 4½ years imprisonment after pleading guilty to three fraud charges.

Sue had worked for Turners in various financial roles for a period of eight years until he was appointed acting Finance Manager in May 2005, whilst the incumbent took maternity leave.

When the woman returned from leave the following year she discovered discrepancies in the company’s accounts and following an investigation that involved the Serious Fraud Office it was revealed that Sue had performed fraudulent accounting practices that had allowed him to steal $2.8 million from the company during the period 1999-2006, as well as receiving secret payments totalling more than $121,000 from a Singaporean company that sold second-hand vehicles to Turners.

 

Results of Not-for-profit fraud survey published
5 February 2008

Chartered Accountants BDO Kendalls, has published the results of its survey into fraud amongst “not-for-profit” organisation in New Zealand and Australia. Some 384 respondents reported a total of 186 individual frauds.

One in five organisations said they had not reported the fraud to police for fear of damage to the organisation’s reputation and loss of funds from bad publicity, or because the amount involved was too small. The average sum in such frauds was $45,000.

BDO Kendells report is available from their website: Here»

 

Trust worker convicted of fraud
20 December 2007

Martin Van der Reit was sentenced to two and a half years imprisonment after being convicted of 16 charges of fraud and using a document to pervert the course of justice.  Van der Reit had been employed by the Auckland Pride Centre in 2003 as a part-time coordinator, but the following year the Centre discovered it was close to financial collapse and it subsequently accused Van der Reit of defrauding it of $35,000.

The centre was forced to close and in a victim impact statement its management said it had suffered considerably from the closure, and that they themselves had suffered ridicule in media reports about the case, had their credibility destroyed, and had even suffered verbal and physical abuse over the matter.

 

Security guard stole $42,000
14 December 2007

A Rotorua woman, responsible for filling ATM’s with cash, has been convicted of stealing money from them.

During a four month period, 36 year-old Ariai Mihaka, who was employed by ADT Security, stole a total of $42,880 from inside the back of the security vehicle, unbeknown to her colleague who was driving the van.

Mihaka was sentenced to nine months' home detention and 200 hours community work.

 

Director ordered to repay $44,000
2 November 2007

Taumarunui Company Director Garry Peter Crossman, aged 49, who pleaded not guilty to four charges of dishonesty, was convicted and ordered to repay almost $44,000 after submitting false invoices to a society that existed to fund community projects.

 

Contractor defrauded ACC of $12,500
19 October 2007

Christchurch woman, Lois Mihi Vallance pleaded guilty to 37 charges of fraud by deception. Vallance, who had no health qualifications, established a company in 2003 to secure a contract to provide Maori-focussed rehabilitation services for the Accident Compensation Corporation.

However, officials became concerned at the inarticulate nature of some of the reports her company submitted that allegedly had been written by registered health professionals, such as nurses, physiotherapists and speech therapists. In consequence Vallance admitted to having written the reports herself and invoicing the ACC for them.

Lois Vallance, who repaid the money when she appeared in Court for sentencing, was ordered to perform 250 hours community work. She unsuccessfully sought permanent name suppression because she was now providing mental health services.

 

NZ companies report higher crime losses than other countries
17 October 2007

In it’s fourth biennial Economic Crime survey examining company theft, bribery, accounting fraud, money laundering and intellectual property breaches, Price Waterhouse Coopers reported that of the 78 New Zealand companies surveyed, 66.7% reported they had experienced at least one of these losses. This is significantly higher than the global average of 42.7%.

It was reported that theft (money and equipment) was the most prevalent loss experienced by New Zealand businesses, comprising almost a third of responses, with accounting fraud making up a further 29%. 

Twenty percent of cases involved losses of more than $1 million and almost half (48%) of the loses were never recovered. 

Internal audits were responsible for detecting just 20% of the defalcations, whereas half of the cases came to light by accident or staff reporting suspicious behaviour.

In 65% of the cases, a company employee was the person responsible for committing the crime, with a quarter of them holding middle-management positions.

 

Security guard stole $55,000
7 October 2007

Emma Havea, a 28 year-old security guard employed by Chubb Security was convicted in Auckland of stealing a total of $55,900 whilst alone inside her security van.

Havea admitted taking $300-$1000 up to three times a week over a period of five months, either before or after retrieving cash cartridges from ATM’s.

 

Woman defrauds a second employer of $68,000
20 August 2007

Andrea Phipps was sentenced to two years imprisonment after pleading guilty to 70 charges of stealing $68,300 from her Christchurch employer, a small family-owned business, where she worked as the Office Manager. Phipps was suspended when discrepancies in the company accounts were discovered and during the suspension she wrote a letter to the company threatening to make a sexual harassment complaint against another employee if the company persisted in referring the accounts discrepancy matter to the Police.

Earlier, in 2002, Phipps called herself Andrea de la Hunt and worked for a bank in Auckland. There she stole $52,000 from a relative’s bank account and forged documents in an unsuccessful attempt to steal $165,000 from another of the bank’s customers. In the meantime she laced her partner’s meal with sleeping pills and used petrol to set fire to their home. She was convicted of attempted murder, arson, forgery and theft as a servant and sentenced on appeal to 2½ years imprisonment.

The sentencing Judge in Christchurch gave Phipps leave to apply for home detention. She and her husband now operate their own cleaning business.

PVL update (15 September 2008):   A year after the setencing reported above, Andrea Phipps (now also known as Andrea Wilson) reappeared in the Christchurch District Court charged with a $100,000 fraud from two Government departments. She filed false GST returns with Inland Revenue to the value of $36,627, failed to pay $34,000 in tax; and received $30,838 in welfare payments from WINZ, that she was not entitled to.

Phipps was convicted and sentenced to six months community detention, 260 hours of community work, and ordered to pay reparation to Inland Revenue.

 

Office Manager ordered to repay employer $32,000
9 August 2007

An Office Manager who worked for a Huntly company for 15 years was ordered to reimburse her former employer $32,713 and a further $15,000 in penalties.

Paania Paki resigned from the company following an audit of the company’s accounts which disclosed that during the two years to 2006 she had used the firm’s money to furnish her house with appliances and furniture, pay her home telephone, power and credit card bills, have her car repaired, buy cosmetics and jewellery, and spent $10,000 of the company’s money on purchasing 400 items from an on-line auction site.

 

Former Rugby League chairman jailed for $125,000 fraud
3 August 2007

Graham Carden, the former Chairman of the New Zealand Rugby League was sentenced to 21 months imprisonment and fined $42,000 after pleading guilty to six representative charges of forgery and fraud.
 
Carden created two bogus Incorporated Societies that only existed on paper, to receive grants from charitable trusts that had been eligible for funding from the proceeds of poker machines.  But instead, he kept the money for himself. He also used the names of several sporting officials, without their knowledge, to lend support to his funding applications.

The Department of Internal Affairs spent two years investigating Carden and he originally faced 126 charges to which he initially pleaded not guilty. The representative charges were substituted and he changed his plea to guilty after it was disclosed to him that more than 6,000 documents would be presented and 55 witnesses called. Reparation of $125,210 was sought, however, the sentencing Judge ordered Carden to pay $42,000 and granted him leave to apply for home detention.

Senior insurance officer convicted of $111,000 fraud
6 July 2007

A senior employee at Tower Insurance, was convicted of five charges of fraud involving fraudulent payments amounting to more than $111,000.

The woman was sentenced to 300 hours' community work. She was granted name suppression.

PVL Update (11 April 2009): Whilst still before the Court awaiting the outcome of these charges, the woman changed her name and was able to get another job without having to admit to a criminal record. It was only an anonymous tip-off that alerted her new employer to her criminal record. Read story here>>

 

Nurse convicted and struck off for theft
23 May 2007

Adrienne Jane Rich, a registered nurse in Christchurch, was convicted of stealing opiate drugs from her employer, and property belonging to a work colleague. She was fine $1080 and subsequently appeared before The Health Practitioners Disciplinary Tribunal which found her conduct reflected adversely on her fitness to practise. It ordered that her nursing registration be cancelled.

 

Forty-five WINZ staff dismissed for $2.2 million of fraud
20 May 2007

Between 2001 and 2006, Work & Income dismissed 45 of its staff for frauds committed against the Government welfare agency. In most instances the frauds involved employees claiming welfare benefits for themselves, whilst they were working for WINZ. Some staff colluded with friends and family to pay them benefits to which they were not entitled to.  More than $2.2 million was stolen.

Almost half of the dismissed staff then became lawfully eligible for social welfare payments, and many began repaying the stolen money from their welfare benefits.

 

Librarian steals $23,000 of rare books
17 May 2007

Karen Churton, a 48 year-old mother of three and Librarian-in-charge of Massey University’s New Zealand-Pacific Collection was convicted of stealing and selling rare New Zealand books which at sale realised her $23,310.

Churton had been a librarian at the University for 15 years when Christchurch Police telephoned her as part of an investigation into an unrelated $1 million book theft ring. The Police believed a book they had recovered might belong to the University but Churton denied it was a part of the University’s collection.  Churton had unwittingly sold the rare book to a member of the ring and in a panic after the call from the Police she deleted from the university computer, the titles of the books she had stolen.

When Police again approached the University claiming to have more stolen books belonging to the library, a search of the University’s computer records led staff to deny ownership of the books. However a printed copy of the rare book list (before Churton’s deletions) existed and it was only a chance examination of this list by the Head Librarian that it became apparent the books might belong to the University.

Churton was arrested and confessed to selling the books for a total of about $23,000 which she repaid prior to sentencing. She was sentenced to 11 months imprisonment which on appeal was reduced to four months. The Judge noted the offending involved a significant breach of trust. Some 24 rare books valued at up to $40,000 remain unaccounted for.

 

Head Teller embezzled $380,000 from bank
22 April 2005

A Christchurch bank teller who rose to the rank of head teller on account of her reputation for accuracy, and was so well trusted that she was allowed to fill the bank’s ATM machine unsupervised, in contravention of bank policy, was convicted of stealing more than $380,000 from her employer.

Laura Jean Kidd, aged 43, admitted stealing cash over a long period of time and falsifying bank records to cover up her offending, which was only discovered when the branch manager became suspicious and undertook an after-hours audit.
Kidd spent the money on gambling and overseas travel.

 

Head of Women’s Refuge convicted of forgery
4 April 2007

Jeanette Ford, the 44 year-old Director of Auckland’s North Shore Women's Refuge pleaded guilty to four charges of forgery.  Ford forged $1250 worth of invoices for reimbursement from the charitable Trust that financially supported the Refuge.

In Court, the prosecutor alleged the former CEO had defrauded the women’s refuge of $17,000 over a two year period and had forged documents in the name of colleagues to apply for personal mortgages. The jury was unable to reach a verdict on 11 other fraud charges and found her not guilty on one theft charge.

Ford was sentenced to 1,000 hours community service.

At least ten people in the last year were accused of committing fraud against charities. A survey last year revealed one in five New Zealand charities were defrauded by employees.

 

Finance manager admits nine year fraud involving $2.1 million
27 March 2007

A 48 year-old Auckland Finance Manager admitted committing 552 fraud offences against his employer over a nine year period. James Keith Smart stole more than $2.1 million and almost $80,000 worth of airline travel for himself, his family and friends. He had worked for the company for 15 years before being caught and accounted for his lavish lifestyle to curious colleagues by explaining he was the beneficiary of a large inheritance.

The airline travel fraud was discovered when a new Finance Controller noticed discrepancies in the company’s invoices. Smart admitted to dishonestly booking personal travel on the company’s airline account and paid back the money, telling his employer there were no other irregularities. He was dismissed in 2006.

However, more discrepancies later emerged and the $2.1 million fraud was then identified. The company referred the matter to the Serious Fraud Office. Smart’s credit card statements showed that he had made cash withdrawals of more than $1.5 million during the period that the offending occurred.

Smart owned four properties and the company has placed a lien on the properties in an attempt to recover some of their loss. Smart was sentenced to four years imprisonment.

 

Nurse convicted of stealing drugs
8 December 2006

On 40 - 50 occasions, during the period March to October 2006, Dan Erik Hansson, a 40 year-old nurse, stole approximately 120 ampoules of Fentanyl from a drug safe at Tauranga Hospital, signing the drug register with fake names using medical colleague’s details.  He also used deceased patients’ details, names of patients who had been discharged and names of patients who were not scheduled for medical procedures in the controlled drug register in order to obtain the Fentanyl. Hansson admitted stealing the drugs and injecting Fentanyl several times for his own use.

He was sentenced to 12 months imprisonment and ordered to make reparations of $3,134.

In September 2007 the Health Practitioners Disciplinary Tribunal found that the conviction reflected adversely on Hansson’s fitness to practise and cancelled his nursing registration.

 

Pharmacist convicted of $10,000 fraud
4 November 2006

Mark Robert Winefield, a Timaru Pharmacist was convicted of 18 representative fraud charges. An audit of the Pharmacy by the Ministry of Health revealed that over a 3½ year period Winefield had submitted 898 fraudulent claims for reimbursement from the Ministry for dispensing prescription drugs and medicines. Winefield also forged patients’ signatures and medical practitioner’s initials to facilitate his offending.

In total the Ministry had paid him $10,865  to which he was not entitled. He was ordered to pay full reparation of this amount, fined $20,0000 as a contribution towards the cost of the investigation, sentenced to 200 hours community service and suspended from practising as a Pharmacist for nine months.

 

Nurse stole restricted drugs
10 October 2006

From January to February 2006 Bruce William Hewson, a nurse, stole Morphine, Pethadine and Fentanyl from a drugs safe at Gisborne Hospital. He took the ampoules to a toilet where he filed the top off the vials leaving a small hole and removing part of the drug using a syringe.  He then returned the vials to the drug safe to ensure the integrity of the inventory.  Hewson admitted stealing and injecting the drugs 12-15 times and was fined $900   

In September 2007 the Health Practitioners Disciplinary Tribunal found that the conviction reflected adversely on Hewson’s fitness to practise and cancelled his nursing registration.

 

Nurse with six identities defrauded ACC of $206,000
20 July 2006

Rosina Mary Healey, also known as Rosemary Fitzgerald, Rose Williams, Rosina Williams, R.M. Williams, R.M.B. Williams and R.M. Fitzgerald, aged 63, was convicted of 44 charges of using a document for pecuniary advantage after she had fraudulently claimed payments from the Accident Compensation Corporation (ACC) for over ten years.

An ACC audit revealed that Healey had used six different names, three different IRD numbers and false addresses in order to conceal that she had been employed as a nurse whilst at the same time receiving weekly compensation payments for an injury to her shoulder when living in South Auckland in 1990.

For 13 years Williams supplied medical certificates to ACC to prove she was unfit for work. During this time she moved to New Plymouth, and her GP Dr Herbert Morrison moved to Waipu. Despite this distance, she repeatedly travelled more 1,000Km on a return trip to Waipu to obtain medical certificates from Dr Morrison, who from November 1992 had issued her with 44 medical certificates.

Healey was sentenced to two years and three months imprisonment and ordered to pay reparation of $206,000.00 at the rate of $20.00 per week.

This was Healey's second such offence. In 2003 she had been sentenced to nine months' imprisonment for defrauding Work and Income. With her husband Brian Healey - who received 15 months imprisonment, she falsely claimed to have been unemployed, and received welfare payments totalling more than $76,000.

In August 2007 the Health Practitioners Disciplinary Tribunal said "the illegal, immoral, unethical and dishonest conduct demonstrated by Ms Healey over such a long period reflects adversely on her fitness to practise", and cancelled her nursing registration.

 

WINZ employee jailed for $102,000 fraud
15 July 2006

A Work and Income (WINZ) Case Manager was sentence to two years and five months imprisonment for creating a fictitious welfare beneficiary and paying the money to himself. Over a five year period 27 year-old Christchurch man Nguha Benjamin Moses approved benefits and other assistance totalling $102,475.
 
Moses created an imaginary person named “Manuel Jakes”, who began to receive various welfare benefits and grants, in particular ones which did not involve rigorous checking by the Department.  Moses granted “Jakes” the unemployment benefit and accommodation supplement, and a sickness benefit which was later transferred to an invalid's benefit. “Jakes” got a training incentive allowance to attend an IT course, WINZ also paid for his study costs, a laptop computer, books, and stationery. Special needs grants totalling $1000 to buy food, a household appliance, and for travel to see a specialist medical consultant were authorised for payment by Moses. He also left notes on the file indicating “Jakes” was on the Police’s witness protection programme.

When workloads were redistributed in the Papanui WINZ office where Moses worked, the file was transferred to another Case Manager. Moses quickly placed a letter on the file from “Jakes” in which he told the Government department that he had gone overseas and no longer needed a benefit.

Moses’ wife was completely unaware of the $102,000 her husband had defrauded, as he gambled it all away.

The sentencing Judge observed that although Moses already had previous convictions for dishonesty in 1996 and 1997, he suspected the offending was able to go on for so long because Moses had bee held in such high regard by his employer.

 

Refugee Agency CEO jailed for stealing $745,00
29 May 2006

Patrick Jackson, the head of the Government-funded Refugees as Survivors Trust, an organisation responsible for counselling and resettling traumatised refugees into New Zealand was sentenced to  three years and nine months in prison for stealing $745,000 over a 2½ year period from the tax-payer funded trust.

Jackson gambled away $660,000 of the money at a local casino - on 17 occasions, he  gambled for eight hours or more, although his longest session was 14½ hours. In one year he spent 28,000 minutes at the casino (the equivalent of 19 uninterrupted days).

Jackson said “It was easy to keep going there because no one paid any attention to me” .

 

Solicitor stole $700,000
7 April 2006
A 69 year-old Christchurch solicitor, Brian Joseph Fay, was convicted of  stealing $700,000 from an elderly client over a period of 6½ years. The client had earlier signed over power of attorney to Fay after he became too unwell to look after his own financial affairs. He spent the money on travel and investments. He gambled away $113,000 .

Fay was sentenced to 4 years imprisonment and struck off the Law Society Register.

 

Credit Controller stole $84,000 from employer
11 March 2006

Paul Robert Crighton, a 40 year-old Credit Controller was sentenced to two years imprisonment after admitting two representative charges of theft as a servant.

Between 2002 and 2006 Crighton admitted to stealing a total of $84,000 from his employer, who in a victim impact report, stated Crighton had had his total trust. Prior to sentencing, Crighton repaid the stolen money and the sentencing Judge allowed him leave to apply for home detention.

 

Nurse convicted of stealing drugs
21 January 2006

Megan Claire Adair, a Wanganui nurse, was convicted under the Misuse of Drugs Act of stealing Morphine and Pethidine after an investigation identified drugs being assigned to patients who were not prescribed them, and to patients who never received them.

Adair was sentenced to 100 hours of community work.
 
In September 2007 the Health Practitioners Disciplinary Tribunal found that the conviction reflected adversely on Adair’s fitness to practise and cancelled her nursing registration.

 

Restaurant Manager stole $16,000 from employer
5 January 2006

A 38 year-old Christchurch restaurant manager, Murat Gençosmanoğlu, was convicted of embezzling $16,000 from his employer. He was spared a term of imprisonment so that he could begin repaying the stolen money but after several months he failed to pay back anything and was subsequently sentenced to six months imprisonment.

 

Treasurer convicted of 334 counts of fraud
24 March 2005

Maria Tait, a 54 year-old honorary treasurer for a Runanga was charged with 334 counts of document fraud. In a 2½ year period she wrote out 270 cheques amounting to some $186,000 which she either cashed for herself or deposited into her own back account. Almost all the cheques were made out to cash but on the cheque stub the names of legitimate companies were entered. Tait denied any dishonesty and claim the money was payment for work she had done, although the Runanga said there was never any authorisation for Tait to be paid for the volunteer position she filled.

Tait held a loyalty card issued by a local casino and its records disclosed she had a turnover of $1.6 million, including up to $54,000 on one day.

Tait, who had previously been recognised for introducing strict financial governance at the Runanga, was convicted and sentenced to three years imprisonment.

 

Consultant steals $2.3 million
15 October 2004

John Bernard Denison, a 49 year-old Australian IT Project Manager working for the Ministry of Health in Wellington was sentenced to three years imprisonment for stealing $2.3 million from the Ministry. The money had been legitimately destined as payments to three medical laboratories, who contacted the Department when the funds did not arrive. Instead, Denison hacked into the Ministry’s computer system and diverted the money into an account he had set up using a fake Australian identity. All the money was recovered

Earlier, over the course of just six days, Denison had unsuccessfully used his computer skills to try and steal a total of $25 million from the Ministry.

 

Finance officer jailed for stealing $447,000 from employer
7 July 2004

A Finance Officer exploited an Auckland company’s restructuring process to steal $447,000. Thirty-eight year old Brazilian Cliceu Goncalves Romagnoli was imprisoned for two years and four months after being convicted of defrauding his employer by making 128 unauthorised payments over a 15 month period. He spent the money on luxury cars, overseas holidays, clothing and an Auckland apartment.

Romagnoli repaid $200,000 prior to sentencing and the Judge ordered that a further $10,000 found on him when he attempted to flee the country should also be paid to his former employer.

CV Fraud: NZ

CV Fraud: Overseas

Theft As A Servant: NZ

Theft As A Servant: Overseas

Employer Failure: NZ

Employer Failure: Overseas