News: Theft As A Servant
As the following cases demonstrate, 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.
New Zealand cases
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- Trust Consultant imprisoned for stealing
- Bank Manager stole $92,000
- Secretary forged CEO’s signature to steal $643,000
- Bar Manager stole $91,000
- Bank Manager jailed for stealing $402,000
- Travel agency worker stole from employer 104 times in six months
- Auckland Council employee forged supervisor’s signature
- Shipping Clerk jailed for stealing $173,000
- Long-serving Practice Manager ordered to pay $120,000 to Medical Centre
- School Principal stole $30,000 from decile one school
- IT Manager defrauded employer of more than $1 million
- Treasurer stole $150,000 from pre-school in six months
- Employee stole $1.1 million
- Farm manager stole $300,000 of property from employer
- Credit Union employee steals $220,000
- Woman stole $457,000 from employer
- Receptionist stole $380,000, forged her own defence lawyer’s name
- Long-serving employee stole almost $100,000
- Hotel manager stole $107,000 in two years
- Insurance Officer imprisoned for stealing $494,000
- IRD employee imprisoned for 165 frauds
- Casino croupier convicted of cheating employer out of $52,000
- Office worker begins stealing within 5 days of starting work
- Employee destroys company records to hide $184,000 theft
- Garden shop employee jailed for stealing $455,000
- Payroll clerk steals more than quarter million dollars in nine months
- University Manager imprisoned for $240,000 theft
- Accountant stole $14,500 worth of gift vouchers
- $110,000 stolen by Accountant’s employee
- Bank Manager jailed 7½ years for $1.4 million theft
- Second Ticket booth employee admits stealing $157,000
- Travel agent defrauded $179,000
- Marae employee stole $331,000
- Sales assistant stole $88,000 worth of copper piping
- Long-serving employee stole $109,000
- Cashier stole $104,000
- Manager jailed for stealing $571,000
- Corrections official jailed for taking bribes
- Bank Teller stole $69,500
- Long-serving employee jailed for stealing $170,000 of apples
- Two Council employees steal $82,000
- School employee jailed for stealing $126,000
- Long-serving employee convicted of stealing $130,000
- Legal Practice Manager sentenced for stealing $374,000
- Racing Club Manager stole $160,000
- Property Manager stole $53,000
- Army Museum employee imprisoned for stealing 744 war medals
- Public servant convicted of stealing $284,000
- Ticket booth employee admits stealing $324,000
- Employee stole $1.24 million, organisation goes into liquidation
- University Manager imprisoned for stealing $666,000
- Financial Advisor imprisoned for stealing $90,000
- CEO defrauds company of $147,000
- Employee with 30 years service jailed for stealing $200,000
- Accountant sentenced to 5 years prison for stealing $4.2 million
- Bank employee steals more than $¼ million
- CFO imprisoned for stealing $5.5 million
- Supermarket administrator stole $¼ million for drug habit
- Office manager stole $1.04 million
- Hamilton office worker stole $436,000
- Ice-cream company employees steal $156,000
- Long-serving employee sentenced for bribery & corruption
- Bank Manager imprisoned for $210,000 theft
- Employee chooses prison, rather than repaying employer $64,000
- Restaurant manager jailed for $139,000 theft
- Bookkeeper steals $282,000 from charity
- General Manager jailed for $1.4 million theft
- Medical-supply manager stole $617,350 from two employers
- Survey: New Zealand bribery
- Survey: Company fraud doubles in two years
- Bank employee stole from elderly customer’s account
- Bank employee convicted of multiple frauds
- Supermarket Supervisor convicted of stealing $92,000 - business almost closed
- Sex offender jailed for theft from employer
- WINZ employee convicted of fraud
- Car dealership employee stole $1.3 million
- Volunteers stole from Salvation Army
- Health Manager jailed for $650,000 fraud
- 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
- 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
- Accounts manager stole $41,000 in ten weeks
- 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 within six weeks of joining company
- Employee stole $1200 a week
- 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
Joanne Christine McGregor, a 41 year-old Trust Consultant at the Christchurch office of Perpetual Trustees was today sentenced for stealing from her employer.
Over a period of four and a half years, McGregor stole $472,000. She tried to excuse her offending by claiming she was suffering from post-traumatic stress disorder following the Christchurch earthquakes of 2010 and 2011, however, a third of her stealing has occurred before the earthquakes.
Indeed McGregor had stolen from her employer on 22 February 2011 - the day of the second earthquake - and she was at lunch when some of her colleagues were killed when their building collapsed.
McGregor was sentenced to three years and 10 months imprisonment and ordered to pay $50,000 in reparations.
Samuel Andrew Journee, a 26 year-old Christchurch Bank Manager with a Bachelor of Commerce degree in International Business, was sentenced today for stealing $92,201 from his employer.
Journee set up false accounts, using the names of friends and family. which he accessed 657 times over a seven-month period during 2013. He also used the password of an ex-girlfriend, who previously worked at the bank, to load and approve credit facilities on the fake accounts
Journee, who repaid the money he stole, but not the losses associated with the Bank’s investigation into his thieving, was sentenced to 10 months Home Detention. The Judge suppressed the identity of the Bank.
Mechelle Catterall, the 36 year-old Executive Assistant to the CEO of Sovereign Insurance was today sentenced for forging his signature over a 15 month period, to steal $643,000 from the company.
Total losses to the company, including the theft itself, and the subsequent investigation, came to about $1 million.
Catterall (also known as Mechelle Arahanga) was sentenced to two years and nine months imprisonment.
Jane Bridget Hamilton, a 37 year-old bar manager at the Rib Bar and Bistro in Hamilton has been convicted of stealing $91,679 from her employer between January 2010 and November 2013, on 166 occasions.
She said she had spent the money on her lifestyle and had nothing to show for it.
Hamilton was sentenced to nine months Home Detention, 200 hours of community work, and ordered to pay $30,000 reparation.
Jenna Lee Robinson, a 29 year-old Manager at a Queenstown bank was sentenced today after admitting stealing $402,386.01 from her employer, the identity of which was supressed by the Judge.
The offending occurred over a two-year period and involved Robinson creating 16 fictitious accounts with loan and overdraft facilities, which she then drew on. She used the money as a deposit on a house, furniture, and overseas holidays in Canada, Japan and throughout New Zealand.
Robinson was sentenced two years and seven months imprisonment.
Dina Kais Jan, a 30 year-old employee working at the Head Office of travel agency, Flight Centre, was sentenced in Auckland today for stealing more than $117,000 from her employer on 104 occasions in just six months.
She would move funds into bogus accounts and then text her partner who would immediately withdraw the money from an ATM.
Some of the stolen money was used for overseas travel including a $25,000 shopping spree in Los Angeles and Las Vegas.
Her lawyer, Rob Samuel, made a fanciful submission to the Court that if Jan were convicted, "she would never work again", But the Judge disagreed and entered a conviction, saying prospective employers should be aware of a history of dishonesty offending.
Jan was sentenced to five months Home Detention.
Eseta Apineru, a 36 year-old accountant employed by Auckland Council was sentenced today for stealing $24,340.85 from her employer, the Auckland Council.
Between April and October 2013 she used her delegated financial authority to approve credit requests, which were in fact false, and paid the money into her bank account.
Apineru was able get away with the fraud because she would photocopy her team leader's signature of authorisation onto the relevant forms.
She was sentenced to 300 hours' Community Work, 12 months' Supervision, and ordered to repay to repay $6000 to the Council at $30 a week.
Kelly Jane Mackley, a 27 year-old clerk was sentenced today in the Christchurch District Court for stealing $173,318 from her employer, Anglo Pacific International.
During the ten-month period January – November 2013 Mackley wrote out 86 company cheques to herself. She spent the stolen money on her preoccupation with food, on-line shopping, and trips to Australia.
The Managing Director of Anglo Pacific told the Court the offending had had a huge financial impact on the business, its cash flow, and profitability. Bonuses to other staff had not been able to be paid.
Mackley was sentenced to two years and four months imprisonment, and ordered to pay reparations of $30,000.
Long-serving Practice Manager ordered to pay $120,000 to Medical Centre
9 May 2014
Bernadine Hull, the Practice Manager at the Papakura East Medical Centre has been ordered by the Employment Relations Authority to repay her former employer $103,378.42 for missing money the ERA determined in a judgement she was responsible for.
She was also ordered to pay interest of $4432.53 and a further $12,029.23 the Practice had spent on its investigation.
Evidence submitted to the ERA by forensics accountants, Deloitte, found that a total of $157,816 was unaccounted for since Hull had been promoted to the position of Practice Manager in May 2001. Her duties had included financial management and banking.
Hull first started working for the Practice as a Receptionist in 1996, however, owing to legal limitations on making claims for recovery, the ERA could only order the repayment of money missing during the six year period July 2007 to July 2013.
When financial discrepencies were detected, covert cameras were installed in the Reception area during a live audit investigation and on one occasion a shortfall of $1,165.50 was found between the money counted and photographed in the evening and the money deposited by Hull into the Practice account.
Hull was invited to view the video evidence and to comment, but declined and resigned shortly afterwards.
She subsequently unsuccessfully lodged a personal grievance for unjustified dismissal but it was rejected by the ERA, and she was instead ordered to repay the Medical Centre almost $120,000.
Hull is extraordinarily fortunate that her employers did not refer the matter to the Police for criminal prosecution.
Two days into their trial, Colleen Margaret Gray, the 66 year old Principal of Mayfield Primary School in Otara, Auckland, and her husband, Bruce Kenneth Gray, changed their pleas to guilty and admitted defrauding the decile one school of more than $30,000
Colleen Gray defrauded the school by raising fake invoices in the names of fictious teachers to companies owned by her husband.
They used the money for a trip to London and three trips to Australia, and Colleen Gray also used her school credit card to pay for meals at high-end Auckland restaurants, flowers, and valet parking at the airport.
The court was told that during the time of the Grays' offending the school was strapped for cash and trying to save every dollar.
When the couple were first charged in 2012 Colleen Gray declared to the media "We are completely innocent. We have nothing to hide. We will fight these charges”.
Colleen Gray was sentenced to a year of Home Detention and 150 hours community service and her husband was sentenced to 10 months Home Detention.
PVL Update (29 July 2014): The Gray's disputed their sentences and took them to the Court of Appeal today.
Before hearing the Appeal, Justice Rhys Harrison warned the couple's lawyer that if the Appeal was unsuccessful the Gray's could have their sentences substituted with terms of imprisonment as the original sentences were generous ones.
The Gray's immediately abandoned their Appeals.
Jimmy Ming Miu, a 47 year-old IT Manager was today sentenced after earlier being found guilty in the Auckland District Court of 55 charges of defrauding his employer, McKay Shipping, during the period 2000 to 2006
Miu’s fraud involved the purchase of computer hardware and software from Avanti Systems and Avanti Systems Integration; companies that Miu had control of.
He invoiced his employer for the equipment and in his role as IT Manager also approved the invoices for payment. But the goods were never supplied, not required, or hugely overpriced.
When Miu’s $1 million fraud was discovered he fled to Australia, but was extradited back to New Zealand by the Serious Fraud Office.
Miu He was sentenced to three years and three months' imprisonment.
Hemi Jay Matenga was today sentenced in the Waitakere District Court for stealing $149,005 from the Nor Western Cook Island Early Childhood Centre,
From 2010 to 2012 the pre-school had been the subject of scathing reports by the Education Review Office for its poor performance and educational outcomes. A new management team was put in place but it allowed Matenga, who had been a member of staff during the review period, to remain on in a voluntary capacity as its Treasurer.
Matenga then went on to steal $150,000 in just six months, from December 2012 through to May 2013.
The theft was so financially devastating that staff were unable to be paid for two months.
Thirty year-old Matenga was sentenced to 22 months imprisonment. The sentencing Judge declined to order that Matenga pay reparation.
Tina Emma Esau was today sentenced in the Christchurch District Court after earlier pleading guilty to stealing $1,142,280 from her employer.
Over a four year period, from 2009 to 2013, the 31 year-old employee made almost 500 transfers from her employer’s bank account to her own.
In a victim impact statement, the employer, which has name suppression, wrote of the sense of betrayal it had towards Esau.
Esau claimed about 60% of the money she stole was spent on a gambling. A PVL Integrity Test administered to Easua before she was offered employment might have alerted the company to Esau’s predisposition to gambling, and her unsuitability for employment.
Esau was sentenced to four years and three months imprisonment and ordered to pay $100,000 reparation on her release.
PVL Update (12 June 2014): Esau appealed to the High Court against her sentence, arguing that the stolen money "did not really occasion major financial hardship" to the victim. The High Court dismissed the appeal.
Dean Thomas Herd, a 38 year-old Farm Manager was today sentenced in the Invercargill District Court after pleading guilty to 31 charges of stealing more than $300,000 worth of stock and farm equipment from his employer, the Criffel Deer Farm, Wanaka,
The offending occurred over a six year period from 2005 to 2011.
Herd was sentenced to two years' and four months imprisonment and ordered to pay $2377.50 reparation.
Denise Topia was today sentenced to two years and three months imprisonment for stealing $220,000 from her employer.
For almost four years the 48 year-old had worked three days a week at a Credit Union but mis-used her trusted access to the Credit Union’s account to commit what the sentencing Judge described as premeditated offending.
Topia was further ordered to pay $25,000 reparations.
Janice Raewyn Keenan, aged 54, was today sentenced in the Gore District Court of stealing $457,639.95 from her employer, Hokonui Rural Transport, between December 2008 and April 2013.
When the firm’s clients paid their bills by cheque, Keenan would deposit the money into the company’s Social Club account, to which she was a signatory, then she would withdraw the money for her own use. In order to do this it was necessary to forge the signature of a second signatory to the bank account.
She spent the money on mortgage payments, accommodation, and providing her children with money, but she could not account for the total amount stolen.
Keenan admitted 52 charges of dishonestly using a cheque, representative of 217 offences, and one representative charge of forgery. She was sentenced to three years and 10 months imprisonment
It is interesting to note that the year before joining the company, Keenan had been a Director of a family logging business that collapsed owing more than $700,000 to creditors. The Liquidators reports noted that they had had difficultly locating and corresponding with Keenan, locating the company records, and locating the company’s assets. And there had been investigations with respect to the company’s relationship with the IRD and the director’s reckless/insolvent trading actions.
Presumably Hokonui Rural Transport did not undertake any pre employment screening before employing Keenan.
Janine Mears, a 32 year-old Receptionist employed at Gilmour Motors in Dunedin was today sentenced for stealing $380,000 from her employer.
From 2006 to 2012 Mears used various methods of defrauding her employer, but mostly changed the payee details on customers cheques so that she could deposits them into her own bank account, or the accounts of members of her family.
Three months' jail was added to Mears sentence after she admitted that whilst on remand, she forged the names of her defence lawyer and the Crown prosecutor on a letter to her bank asking it to unfreeze one of her accounts.
Mears was sentenced to four years and three months imprisonment. The judge said his sentence took into account her lack of remorse and the fact her thieving almost put the company out of business.
Raewyn Margaret Thompson was sentenced today for stealing from her employer, the Hamilton branch of the Patent Attorney firm, James and Wells,
Thompson, aged 46 and who now goes by her maiden name of Kerr, spent 26 years working for James and Wells but over the four year period 2008 – 2012 stole $96,543.78.
She spent the money on a beach front home at Whitianga, new cars, landscaping and art works.
Thompson was sentenced to six months Community Detention, nine months supervision and 200 hours of Community Work.
Outside Court, a spokesman for the company said the amount taken by Thompson was "significantly larger" than claimed in the charges, but it was not worth the drawn-out legal proceedings to pursue it any further. He said their only reason for proceeding with the criminal charges was to make sure Thompson did not move on to another unwitting employer.
In fact, Thompson had managed to get another job whilst awaiting trial and was sacked by that employer when he learnt of her offending.
Jose Enrico Buenaventura, a 35 year-old senior manager at the Spencer on Byron Hotel in Takapuna was today sentenced for stealing $107,000 from his employer over a period of two years – about $1,000 a week.
He was sentenced to11 months' home detention and ordered to repay the money at $150 a week with a lump sum payment of $35,000 by December 2013.
The General Manager of the hotel described the sentencing as a "slap on the wrist".
A 35 year-old Insurance company employee was today sentenced in the Wellington District Court on false accounting and money laundering charges.
Lady Bernadette Cooper (“Lady” is her first name, not a title) made 112 fraudulent transfers of client funds over a five year period into her own bank account, totalling $494,828.74
Cooper had worked for Assure, which was taken over by Axa then merged with AMP and during this time discovered a way to steal client funds. Her offending was never detected by her employer(s), but instead, after leaving the company and developing a Christian faith she voluntarily confessed what she had done.
She used the money to purchase four cars ($115,000), sent $18,000 to overseas family members and spent the rest on personal expenses. Cooper was sentenced to two years and two months imprisonment.
In the Hamilton District Court today Anita Gail O'Connor of Ngaruawahia was sentenced after last November admitting to defrauding her employer, the Inland Revenue Department, of more than $225,000.
Fifty-nine year-old O'Connor worked for the Department for more than 17 years but over a period of five years she corruptly used her access to tax payers personal details to steal their identities.
She stole birth certificates submitted by taxpayers as identification, altering them to create new fictitious identities that allowed her to open fake bank accounts, apply for passports and IRD numbers. She paid two others to assist her with altering the stolen identifications.
She put in 14 fake tax refund applications complete with fake birth certificates.
O'Connor took voluntary redundancy from the Department in August 2009 but her false tax refund applications meant her offending continued on into the following year with refunds paid by IRD into various accounts that she controlled, up until November 2010.
IRD first became suspicious when genuine taxpayers contacted it saying that it had deposited money into bank accounts they had never opened.
O’Connor spent the money on cars for herself and her daughter, gambling, groceries and shopping. She claimed to have given $100,000 to gang associates who were threatening her, but the Judge dismissed this claim as “hollow and fanciful” and said O’Connor’s chronic gambling accounted for much of the offending.
Anita O'Connor was sentenced to two years and five months imprisonment. The IRD is pursuing O’Connor for $362,000 which represents the stolen money, interest, penalties and costs associated with the investigation. A 25-minute PVL Integrity Test could have alerted her employer to O’Connor’s addiction to gambling before she started stealing from them.
Bo Du, a 33 year-old roulette croupier who had worked for six years at the Hamilton casino was today sentenced for defrauding her employer of $52,000 and also of accepting a $15,000 gratuity from a casino patron, which is illegal under the Gambling Act.
Du was sentenced to two years imprisonment, converted to 18 months Home Detention, and ordered to make reparation of $20,000. Two other associates face similar charges.
A 47 year-old Gisborne office worker was today sentenced for stealing $64,289 from her employer.
The woman began stealing after just five days of employment, in December 2007, and her offending continued on until May 2012.
The woman was sentenced to 12 months Home Detention and ordered to pay reparation of $10,000.
Notwitstanding that the woman had previous convictions for similar offending, the sentencing Judge granted her permanent name suppression on family grounds.
Shirley Ann Tomuli was today convicted in Christchurch of stealing $184,000 from her employer, but the Court said the full extent of the offending would never be known as she had destroyed the company's records.
For over seven years the 62 year old fraudulently transferred money from her employer’s bank account, into the office social club bank account. And from that account she withdrew money, $499 at a time, for her own personal expenses.
Tomuli was sentenced to 12 months’ Home Detention. Her former employer will have to take civil action against her to try and recover the stolen money.
Darren Lindsay Thomason, a 36 year old Finance Officer at Waimea Nurseries in Nelson was today convicted of stealing from his employer.
Thomason was hired in May 2009 but within eight weeks of starting had begun stealing from the company.
He fraudulently transferred $436,610 of company funds into his own personal bank account and used a company travel card to charge up $19,000 in trips around New Zealand and Australia, visiting casinos and attending sporting events.
Thomason was sentenced to three years' imprisonment and ordered to pay $50,000 reparation, on top of the $20,000 he had repaid already, and the $80,000 that his mother had also contributed prior to his sentencing.
In mitigation, his lawyer said Thomason had started gambling 15 years ago and became a heavy gambler five years ago.
A 25 minute PVL Integrity Test could have identified Thomason’s gambling addiction before he was ever hired and saved the company’s directors and shareholders from what the sentencing Judge described as “offending (that) would be felt for the rest of their lives”.
If you are employing staff based on your instincts, without undertaking due diligence pre employment background screening, then you are exposing yourself to the sort of financial losses this company has just suffered. Call us now for an obligation-free consultation on how you can protect your business from employee theft.
Gladys Ruth Campbell, a 64 year-old Feilding Payroll clerk today admitted stealing $261,205 from her employer.
Campbell was hired on a temporary basis in 2009 by Aztech Engineering in Lower Hutt to manage its accounts and the following year was made a permanent employee.
But within weeks of joining the permanent staff she began stealing from the company and in just nine months, from March to November 2010, stole more than a quarter of a million dollars by making false entries in the company’s MYOB payroll software, and creating fake creditors with similar names to existing suppliers.
Campbell said she had a $700-a-day gambling addiction. A PVL 25-minute on-line Integrity Test could have identified Campbell’s gambling addiction.
Campbell was remanded on bail for sentencing in 2013.
Graeme Geoffery Pettitt of Mosgiel, a 61 year-old Accounts Manager at the University of Otago was today sentenced for stealing from his employer
Pettitt admitted inventing a fictitious creditor and creating a bank account in the name of Hadaad Syndicate. Over a seven year period he made 72 fraudulent payments totalling $238,846.61 into the fictitious account.
He also invoiced various university departments for postage they had already been charged for and created fake journal entries to transfer money into a suspense account, from which he paid the fictitious creditor.
Pettitt was regarded by the University as a senior and trusted manager and had sat at many meetings where it was discussed how the university could reduce its exposure to fraud.
Pettitt, who claimed he had a gambling and alcohol addiction to support, was sentenced to two years and seven months imprisonment.
Anu Radha Sharma, an Accountant previously employed at the Farmers department store was today struck off as an Accountant by the Disciplinary Tribunal of the New Zealand Institute Of Chartered Accountants.
The decision stemmed from Sharma’s earlier appearance on 19 June in the District Court on three charges of using a document for pecuniary advantage.
Sharma’s duties at the store included receiving and reconciling gift vouchers that customers had used in exchange for goods, and then to destroy the vouchers. Instead she kept the gift vouchers for herself and also gave some to family and friends to re-use.
Sharma was convicted and sentenced to four months' Community Detention, six months Supervision and ordered to pay Farmers reparations of $14,544.24.
The Disciplinary Tribunal found Sharma’s conviction reflected on her fitness to practise accountancy and struck her from the register.
Charlotte Emily O'Leary, a 24 year-old administrator employed by the Timaru accountancy firm Martin Wakefield was today sentenced for stealing from her employer.
In less than 11 months she was able to steal $110,318 before being detected. She spent the money on clothes, shoes and accessories, and overseas holidays to Fiji and Australia
O'Leary who has repaid less than $2000 since been caught, was sentenced to 12 months Home Detention and ordered to pay reparation of $9216, at the rate of $20 per week, thereby allowing her almost nine years to pay back less than 10% of what she stole.
A long-running employee fraud case concluded today when Susan Ann Bourton, a 36 year-old former Hamilton Westpac Bank Manager was sentenced on 81 charges of defrauding her employer of $1.4 million.
Bourton would target vulnerable clients who did not know how to use phone or internet banking, and kept for herself the money they handed over to her. She also created accounts in customers names without their knowledge and altered loan documents to fraudulently obtain funds to buy a luxury lodge at Lake Karapiro.
She resigned from the bank when she thought her frauds were about to be discovered, later moving to Ireland. However, she was arrested in July 2009 when she came back to New Zealand for a holiday.
She managed to delay her trial for several years because she kept hiring and then firing successive lawyers she had engaged to defend her – seven lawyers in all.
Bourton was sentenced to seven and a half years imprisonment.
Another ticket booth employee working at the front entrance of Te Puia in Rotorua (also known as the New Zealand Maori Arts and Crafts Institute) has pleaded guilty to stealing entry money paid to her by the public.
Waikare Bernadette Te Moana, age 55, was today sentenced in the Rotorua District Court for stealing $157,000 of admissions money.
Despite being aware that video surveillance cameras were in operation inside each ticket booth, Te Moana stole money without detection on 77 occasions over 2½ years.
At sentencing, Te Moana agreed to the proceeds of the sale of her house being used to pay some of the money back. She was sentenced to nine months' Home Detention.
Seven months ago, Te Puia ticket booth employee Te Raumahara Elizabeth Pene was sentenced to two years and nine month imprisonment for stealing more than $324,000 of admission, again under the gaze of surveillance cameras. Read story>>
These cases demonstrate that as a counter-fraud measure, video cameras are insufficient. If you have dishonest employees who set out to steal, they will find a way to succeed. The most effective method of preventing employee fraud is also the simplest (and cheapest) – don’t hire individuals predisposed to theft in the first place.
Timothy Kevin Bignall, a 35 year-old Wellington Travel Agent has been convicted of obtaining by deception after he was found to have poached clients from his employer and kept nearly $180,000 commission for himself.
The long-serving Orbit Corporate Travel employee was caught arranging travel for clients, invoicing them using Orbit company letterheads and diverting payment to his own bank account amounting to $952,753. He paid for the services himself and kept the balance as his commission about 36 times from November 2009.
After being caught Bignall repaid the commission to his employer. He was sentenced to 200 hours Community Work.
The sentencing Judge was of the opinion that Bignall was intending to start his own travel agency. A 25 minute PVL Integrity Test can measure how loyal and accountable an employee will be.
Jocelyn Iwa Ngareta Renata, a 50 year-old Finance Officer employed by the Hoani Waititi Marae in Glen Eden has been sentenced in Auckland for stealing $331,626 from her employer.
Renata had worked for the marae, a registered charitable trust, for over 17 years. When caught she said all the money had been spent on gambling.
An examination of her account at a local casino revealed more than $600,000 had passed through it. She used her employer’s credit card to obtain $42,939 in cash advances at the casino and cashed cheques worth $18,149 from the Trust’s account, as well as overpaying wages to herself, and family members. She also pocketed nearly $3,000 paid to her by parents using the marae’s childcare facilities.
The marae employed a forensic accountant and lawyer at considerable expense to learn the extent of Renata's offending and the trust survived only by arranging a bank overdraft.
In sentencing Renata to two years and three months imprisonment, the judge said her offending had caused the trust extreme embarrassment and put its reputation as a trusted recipient of public funds at risk. A 20-minute PVL Integrity Test could have identified Renata’s gambling addiction.
Mark Tamati Leighton, a 33 year-old sales assistant employed by Wellington company Transmark was today sentenced on 37 charges of fraud involving the theft of $88,305 worth of copper piping from his employer,
The offending occurred over a 12 month period and involved Leighton ordering the copper and then later cutting it up into smaller pieces and selling it for scrap, receiving $46,901
Leighton was sentenced to six months Community detention, 12 months Supervision and ordered to pay $40,700 in reparations over the next five years. He was further ordered to take treatment for a gambling addiction.
Gail Newburn (also known as Gail Curwood), a 53 year-old Accounts Clerk at the Crown Plaza Hotel in Christchurch has been convicted of 14 charges of stealing $109,231 from her employer.
Newburn manipulated the hotel’s records, stealing money and then covering the transactions with a negative cash payment to give the appearance of a nil cash balance.
The offending was only discovered after the hotel was forced to close following the February 2011 Christchurch earthquake - the lack of paying guests meant she could no longer alter the hotel’s accounts to hide her earlier stealing.
Newburn, who had worked for the hotel for 13 years, avoided a sentence of imprisonment because of a $91,000 payment she made to the Crown Plaza as part of the $156,000 reparation sought by her former employer. She was sentenced to 12 months Home Detention and ordered to pay a further $29,000.
Newburn has a previous conviction for theft by failing to account, from 1998.
Yvonne Sheila Cummings, the 62 year-old head cashier at the Masterton Pak'n Save supermarket was today sentenced for stealing $104,321.60 from her employer.
Cummings had worked at the supermarket for six years and stole cash for 2½ years until caught last October.
At sentencing, Cummings offered to repay the money at $10 per week, but the Judge said at that rate it would take her 200 years to pay back the full amount.
Cummings was sentenced to 10 months Home Detention, and ordered to pay reparation of $10,000.
John William Jackson was today sentenced to two years and five months imprisonment for stealing $571,340.67 from his Auckland employer, Air Res Comm Ltd.
On 84 occasions over three years, the 62 year-old South African-born manager used the air conditioning company’s office computer to transfer company money into his own bank account.
Chanel Vern Scanlan, a 38 year-old Tokoroa Community Work Supervisor was today sentenced to two years and nine months imprisonment after earlier pleading guilty to 35 charges of perverting the course of justice
Scanlan was employed to supervise convicted offenders sentenced to community work but instead took bribes in return for recording they had completed much of their sentence.
Over nine months, Scanlan wiped a total of 2,700 community work hours off offenders sentences. One offender had 95 of his 100 hour sentence wiped.
The sentencing Judge told Scanlan his offending had struck at the heart of the administration of justice.
Fesueai Sue Ah Honi, also known as Fesueai Sue Alatimu, a 28 year-old teller employed by the Bank of New Zealand in Wellington for more than seven years was today sentenced for stealing $69,500 from the bank.
She stole money from the bank’s ATM machines and also from an elderly female customer’s account, whose family thought their Mother was going senile because the withdrawn money could not be accounted for.
Ah Honi was sentenced to ten months' home detention, 200 hours' community work, and ordered to pay reparation of $69,500.
Teokotai Mokotupu, a 32 year-old Logisitics Manager who had worked for Moffett Orchards in Hastings since she was 17 years old was today sentenced to 18 months imprisonment for stealing $170,000 worth of apples, and apple packaging, from her employer.
Mokotupu would sell apples to customers without the company's knowledge and keep the money for herself. The offending, which was said to have begun in January 2010, was only discovered by chance when one of the company’s regular clients complained they had received the wrong order.
Mokotupu’s lawyer said she was "adamant'' she wanted to pay the money back, but the Judge said that at $50 a week that would take at least 70 years.
Two clerks who had been employed for almost four years by Environment Canterbury (the Canterbury Regional Council) have pleaded guilty to stealing $82,000 in cash from their employer.
For more than 20 months Catherine Anne Ihaka, age 56, and Amelia Taima Temo, age 24, repeatedly stole money that the public used as payment for the purchase of bus tickets. The pair originally faced 194 criminal charges but the prosecutor reduced this to a representative three charges to cover all the offending.
Temo was sentenced to six months home detention and to ordered to pay reparation of $15,000. Ihaka was sentenced to six months community detention, 150 hours community work, and a reparation payment of $7500. further to $7250 she had put aside as a reparation payment prior to sentencing.
David Don, the 44 year-old Executive Officer and Accountant at Patrick’s College in Wellington was today sentenced to two years imprisonment for stealing more than $126,728 from his employer.
Between September 2006 and March 2011, Don made 107 dishonest transactions, including inflating reimbursement costs and withdrawing money from the school's bank account into his own. Also $20,000 of the stolen money was spent on prostitutes and a further $3,700 on a delux waterbed.
Don had repaid about $12,500 and was eligible for home detention, but family members refused to let him live with them.
Amanda Margaret Knight, a 44 year-old Lake Hawea part-time book-keeper was today convicted in Queenstown of stealing $131,627.87 from her employer, Back Country Helicopters.
Knight who was first employed in 2004, stole on a weekly basis the entire time she worked for the company. Her offending affected the company's credit rating and placed it under severe financial pressure.
Knight was sentenced to ten months home detention and 200 hours' community work. The sentencing Judge said he believed Knight had stolen more money, which had not been accounted for and imposed six months' post-detention conditions, including that she not obtain a job that involved access to financial accounts.
Peter James McClintock, the 63 year-old General Manager of McElroys Litigation was today sentenced in the Auckland District Court for defrauding his employer of $374,000.
On more than 50 occasions he made false entries in the company’s wages records to conceal the fact he was paying himself an additional $5,000 a fortnight in wages and on many other occasions he made unauthorised withdrawals from the Practice’s Trust account and General account, using company finds to pay personal expenses, including the upkeep of a 20 year-old local Thai prostitute.
McClintock, who had worked at McElroys Litigation for over 11 years, was sentenced to 12 months home detention and 300 hours community work.
Lea Margaret Temm, the 55 year-old Manager of the Waipa Racing Club was today sentenced for stealing $162,172.38 from her employer over a period of ten years.
Temm had had a 30 year relationship with the club, having first started out working for it as a cleaner in the 1980’s and over time moving on to being the Office Assistant, Administration Manager, and finally Secretary Manager in 2000.
With access to the club’s bank accounts she began paying herself double her approved salary, regular “bonuses” and used club funds to purchase furniture and electrical equipment for her own home. To conceal her offending she would alter the Minutes of Club meetings, after they had been approved, to make it appear as though the payments she made to herself had been authorised by the Committee.
Temm’s offending was only discovered after she resigned because of health problems and the newly appointed manager was asked to examine the club’s financial position because it was on the brink of financial collapse.
Temm was sentenced to six months home detention, having narrowly avoided a prison sentence because of a last-minute reparation payment of $85,000 made to the Club.
The Club’s President said it was more than just the financial burden they had been left with after a decade of theft. "It's particularly hard when you've got someone you trust and they're abusing that trust," he said.
If you don’t have a background screening programme in place for your current and existing staff, contact us now for advice.
Stephanus Otto, an Upper Hutt property manager has been convicted of stealing $53,968.04 from his employer.
Rent money collected by Otto on behalf of clients was instead deposited by him into his own bank account to fulfil a gambling addiction.
Otto was sentenced to three months home detention, 100 hours community work and ordered to pay reparation.
He was further ordered to undertake a gambling prevention courses.
A 20-minute Integrity Test administered by PVL could have identified Otto’s gambling addiction before he was employed.
Keith Davis, the 57 year-old former Registrar at the Waiouru Army Museum was today sentenced in the Wellington District Court for stealing 744 military medals and other antiquities from the museum between 1995 and 2002.
The medals were valued at $233,155 and the other items, which included German uniforms from World War II, a statuette and 100 military histories valued at $25,700
Davies served as a territorial soldier in Canterbury and Wellington between 1977 and 2003, and was part of a peace monitoring group in Bougainville in 2000. He emigrated to Australia in 2005 and was arrested when he returned to New Zealand in September.
Some 20 victim impact statements were put before the court and the sentencing Judge said Davies offending was premeditated and took place over a long time, adding it was a gross and wholesale abuse of trust.
Davis was sentenced to three years imprisonment and ordered to pay $50,000 reparations. Only 300 medals were recovered
Last year, a curator at the Museum was dismissed after being convicted of stealing weapons from its collections. Malcolm Stewart Evans (aka Joe Evans), was convicted of stealing an 1890’s Enfield sniper rifle valued at $10,000 and two bayonets. He was sentenced to four months' home detention. The museum later got back 17 weapons and other items it did not know were missing.
Ropati Telea, a 27 year old Accounts Administrator employed by the Transport Accident Investigation Commission (TAIC) was today sentenced in the Wellington District Court for stealing $284,341 from the Commission. TAIC is the Government agency responsible for investigating air, sea and rail accidents and employs about 20 staff, with an annual budget of $3.9 million.
The money, which was stolen over a four year period to February 2011, involved Telea making 179 unauthorised transactions from the Commission’s bank account. His offending was only discovered two months after he had left the Commission, to enrol at a Bible College.
Telea was sentenced to 10 months home detention, 300 hours community service and ordered to pay $10,000 reparation in a lump sum, plus $100 a week. At this rate it will take Telea 52 years to repay the money he stole.
Te Raumahara Elizabeth Pene, a 52 year-old employee at Te Puia in Rotorua (aka the New Zealand Maori Arts and Crafts Institute) was today sentenced to two years and nine month imprisonment for stealing more than $324,000 of admission money paid to her by members of the public.
The offending occurred over a 2½ year period in full view of video surveillance cameras and at times Pene was stealing more than $1,000 a day. When questioned by police, she handed over nearly $4500, money she had stolen over the previous three days.
Before sentencing, Pene offered reparation of $50 per week, but the Judge said at that rate it would take her 130 years to pay back the money she had stolen.
PVL Footnote: A second ticket seller, 55 year-old Waikare Bernadette Te Moana was sentenced in June 2012 for stealing $157,000 worth of admission money. Story here>>
Susan Terri Hagai, a 45 year-old Receptionist and Finance Officer was today sentenced in Wellington for defrauding her employer, the Hiberian Catholic Society, of $1,242,750. The theft represented almost 13% of the Society’s assets and as a consequence its Credit Union is to be put into liquidation.
Hagai had worked at the Society since 1994. She first began stealing in April 2004 and it continued on undiscovered until she was made redundant ten months ago when the Society outsourced it finance functions to an accountancy company. Hagai was effectivly stealing $600 a day for almost seven years.
She then went on to steal $15,089 from her new employer, Hoff Holdings, the owner of several Wellington bars.
Hagai was sentenced to four years and two months imprisonment.
Jonathan Kirkpatrick, the 53 year-old Manager of the Innovation Centre at Auckland University of Technology was today sentenced to three years and two months imprisonment for defrauding his employer of $666,000 over a period of 8½ years.
On 82 occasions Kirkpatrick using his delegated authority to approve the payment of bogus invoices to companies he owned, for work that was never done.
Kirkpatrick, who was paid an annual salary of $150,000 spent the money he stole from the university on maintaining a lavish lifestyle that included motor vehicles, wine and food for a resaurant he owned, and overseas holidays. In fact it was whilst he was holidaying in Thailand that his offending was first detected when a bank statement from one of his phony companies was noticed lying on his desk.
Kirkpatrick who was a former dean of St Paul's Cathedral in Dunedin, was ordered to pay $20,000 reparations to the university. The total cost of the fraud and subsequent investigation cost more than $1 million.
Fifty year-old Robyn Clare Bugg, a Financial Advisor, was today sentenced to two years and four months imprisonment for stealing $90,000 from her Thames employer, Watson Davies Transport.
Bugg used the money to prop up a family business, the purchase of building supplies for her own home, the payment of road-user charges, fuel and servicing of her own vehicles, and even for paying family member’s speeding fines.
Her employer said the theft, had taken a massive toll on his business, and his wife was now suffering stress-related illness as a result. He added "Even the publicity around the case has been bad for business, so we are still paying a significant price."
The sentencing Judge said her premeditated and fraudulent offending had brought her former employer's business "to the brink of insolvency". He ordered her to pay $91,435 reparation.
Arapeta Hamilton, the 53 year-old CEO of Kaikohe-based Ngapuhi Iwi Social Services Limited (NISS) was today sentenced to eight months' home detention and ordered to pay $20,000 reparation after earlier being convicted of defrauding the company of $147,000 over a two year period.
NISS was established by a Maori charitable Trust in 1997 to provide social services to disadvantaged children in the Far North and it received $1 million annually in Government funding. Hamilton had overall responsibility for the company and was given complete autonomy to run the business including signing authority for two NISS bank accounts
Hamilton misused his position to write out 40 NISS cheques worth $86,588 to pay the mortgage on a house he owned, advanced himself $20,000 in wages, diverted $12,885 to Southside Company Ltd, a South Auckland nightclub that he wholly owned, and wrote a further 80 cheques out to the value of $28,045 to other companies he controlled.
Mary Tautau, a 54 year-old supervisor at Hutt Hospital has been sentenced to two years and four months imprisonment after pleading guilty to stealing $198,274.46 from her employer. Tautau had worked for the hospital for more than 30 years.
A Health Board spokeswoman said Tautau had been "a very trusted and respected employee who took advantage of this trust and her position as a supervisor to deceive management and her colleagues. Her actions have had a significant impact on staff”.
The fraud was described as "a substantial financial loss" for the hospital.
The Health Board said it had reviewed its cash handling procedures to make sure a similar fraud could not happen again.
However, at PVL it is our experience that the most effective procedure any employer can implement is not to hire people predisposed to theft and dishonesty in the first place. Employment screening is a proven and successful defence against fraud and considerably cheaper and quicker than any other method used for preventing employee theft.
Gary Soffe, a 52 year-old Hamilton accountant was today sentenced to 5 years and one month’s imprisonment after earlier being found guilty of defrauding a family trust of almost $4.2 million over a four year period.
Much of the money he stole was spent on purchasing a large home which he renovated with a the addition of a medieval-themed wine cellar, gym, six-car garage, $80,000 sound system, solar under floor heating, large swimming pool, a hydroslide and a floodlit astro-turf tennis court.
The Family Trust, which has been granted permanent name suppression, only discovered it was being defrauded when the Inland Revenue Department began investigating why Soffe’s assets far exceeded his income.
Vivianne Tait (also known as Vivian Tait), the 50 year-old deputy manager of the Westport branch of the BNZ was today sentenced for stealing $262,000 from her employer.
For over 18 months from May 2008, Tait used her inside information to falsify banking records as well as using her seniority to instruct other staff to deposit money into an account she had opened for herself.
When she discovered an external audit of the branch was about to be undertaken she borrowed $130,000 from her Mother and temporarily placed it in the vault to conceal her offending.
Tait was sentenced to 12 months’ home detention, the Judge noting that sending her to jail would result in her losing her current job and curtail her efforts at repaying the stolen money.
Richard Arthur Watson, the 58 year-old Chief Financial Officer of a family-owned Auckland business has been sentenced to six years imprisonment for stealing $5,495,000 from his employer over a period of ten years.
Watson, who worked for The Ross Group for more than 30 years and was paid an annual salary of $300,000 and a yearly bonus of $50,000 mis-used his trusted access to manipulate the company’s internet banking facilities to defraud his employer.
On 150 occasions he stole sums ranging from $50,000 to $210,000. The theft was discovered during an audit into the company’s poor performance.
Watson gambled much of the money away at a local casino which he visited up to three times a week and where he was treated as a high-roller and allowed to belong to its VIP lounge. Court documents recorded Watson had considerable wins and losses at the casino – spending as much as $50 million in a decade.
The judge described Watson’s criminal offending as a "gross, prolonged breach of trust driven by greed”. A 20-minute PVL Integrity Test could have identified Watson’s gambling addiction.
Clare Strachan, a 29 year-old Administration Manger at the New World Supermarket in central New Plymouth was today sentenced to two years and nine months imprisonment after being convicted of 51 charges involving the theft of $282,718 from her employer.
Strachan, who had worked for the company for more nine years, and had been promoted to be the owner’s Personal Assistant, stole the money over a four year period by depositing cheques intended for the supermarket into her own bank account, stealing phone cards, gift cards and paying herself extra wages.
When her employer paid for her and her partner to go on holiday in the Pacific Islands she stole $10,000 for extra spending money.
The enormity of the theft almost led to the supermarket closing. Her lawyer claimed the offending was to pay for a methamphetamine addiction. The Judge made no order for reparation.
Maria Anne Kahu, a 41 year-old Office Manager was today sentenced for stealing $1,004,285 from her employer, a Christchurch digital printing company.
On 276 occasions between 2004 and 2010, Kahu unlawfully deposited company funds into her personal bank account.
The fraud was only discovered after she had resigned in preparation for emigrating to Australia. Kahu said she gambled most of the money away.
Maria Kahu was sentenced to three years and nine months imprisonment and ordered to pay reparations of $50,000.
Irene Pou, a 43 year-old Hamilton office worker was today convicted of stealing $436,000 from employer. The name of the company has been suppressed.
On 14 occasions over an 18 month period Pou deposited cheques intended for the company, into her own bank account.
Pou claimed she had stolen the money to pay her son's drug debts, but the Judge described her claim as "an illusion", devised to get her out of a tight spot. Pou was sentenced to 2½ years imprisonment.
Two long-serving employees of the Rush Monro ice-cream company in Hastings have been sentenced for stealing $156,149 from their employer
Aroha Byrne, the company’s 31 year-old Manger, who had worked for the business for over ten years, was sentenced to five months’ home detention, 150 hours community work, and ordered to pay $77,326.49 reparation.
Yvette Newman received the same sentence and was ordered to pay her share of reparation amounting to $78,074.91.
For over four years the pair manipulated the company’s computer system to hide the fact they were each stealing cash from their employer.
Malcolm David Mason, a 50 year-old Wellington national property manager employed by the Accident Compensation Corporation for more than 32 years, was today sentenced to 11 months home detention after earlier pleading guilty to three bribery and corruption charges.
Mason admitted to accepting a bribe worth $160,000 from a property developer in relation to the construction and leasing of a new ACC branch office.
He also accepted a $9000 Singapore holiday in 2008 from a real estate agent in return for helping him secure a long-term lease for another ACC building.
Thirdly, Mason admitted corruptly disclosing confidential E-mails naming all government department security officers, to a security company involved in installing security systems so that it could profit from inside information.
Mason has agreed to pay back the $160,000. A second man is yet to face trial
PVL is the only pre-employment screening company in New Zealand able to test and measure a job applicant’s propensity for bribery. At the same time, our test also measures a candidate’s inclination towards theft, drug abuse and gambling. Protect your business by requesting our Integrity Test for job applicants, or existing employees being considered for promotion.
Whangarei ANZ Bank manager Vanessa Evelyn Adams was today sentenced to two years and three months jail for stealing $210,592 from customer’s accounts.
Thirty-nine year-old Adams worked for the bank for more than 17 years but began stealing after being promoted to branch manager. She stole mostly from the accounts of elderly customers and changed their address details so they never received bank statements that would have alerted them.
When customers did query irregularities in their accounts, Adams replaced their money with money stolen from other customers’ accounts.
Nicola Maree Francis, a 45 year-old Accounts manager was sentenced in Palmerston North today to 20 months imprisonment for stealing $63,723 from her employer, Tararua Veterinary Services, in Pahiatua
Francis was first employed in February 2008 as a Receptionist and three months later was appointed Accounts manager. However, within eight weeks of her promotion she began defrauding her employer and over the next 11 months stole cash from the company on 179 occasions, forged 21 cheques and altered a further 13 customer cheques so she could deposit them into her own personal bank account.
The sentencing Judge offered Francis the chance to repay her employer by selling her home in Pahiatua (which was worth between $165,000 and $173,000), or be prepared for a prison sentence.
Francis chose to accept prison, rather than repay the stolen money to her employer.
Vijay Singh, a 30 year-old manager at the Tauranga Lone Star restaurant was today sentenced to 1 year and nine months imprisonment for stealing $139,112 from his employer.
For over two years Singh created fake table numbers and would transfer the cost of customer’s meals to that table. He would then delete the cost of the meals so there was no trace in the electronic cash register, keeping the money paid by patrons, for himself.
In addition to bearing the loss of almost $140,000, the restaurant owners will also have to pay tax to Inland Revenue on the stolen money. The sentencing Judge noted that Singh’s offending had almost crippled the company.
Singh had no previous convictions. He blamed his offending on a gambling addiction. A PVL Integrity Test could have identified Singh’s addiction before he was employed.
Leanne French the 52 year-old Auckland Manager of the Hearing Association has been convicted of 21 fraud, forgery and false accounting charges involving the theft of $282,000 from her employer.
French, who was also the Association’s Bookkeeper and Treasurer, misused her position to forge 143 cheques, which she deposited into her own bank account. The offending occurred between 2004 and 2009.
The Judge told French she had put the hearing of a generation of young New Zealanders at risk as many notices warning of "noise-induced hearing loss" had not been placed in schools and workplaces because of a lack of funds.
French was sentenced to 12 months' home detention, 300 hours' community work and ordered to pay reparation of $8000, at $50 a week for five years.
Her lawyer claimed the offending was to fund a secret gambling habit. Employers can reduce the risk of employing a person with a propensity for gambling and theft by administering PVL’s 20-minute online “Integrity test” to job applicants. Contact us for a free demonstration.
Martyn Tewsley Scott, the 51 year-old General Manager of National Fire & Security Ltd, a supplier of security equipment, was today sentenced to three years and three months imprisonment for stealing $1.4 million from his employer over a six year period.
Scott diverted invoice payments intended for suppliers, to bank accounts he controlled. When the family-owned business first became aware that suppliers were not being paid it was Scott they turned to, asking him to investigate the matter.
Amanda Joan Wilkie of Christchurch today pleaded guilty to stealing $617,350 from two employers, both medical supply companies.
Over a six year period from July 2004 until July 2010, thirty year-old Wilkie defrauded one employer of $319,500 and another of $297,850 by depositing money she received from clients, into her own personal bank account. Wilkie allegedly defrauded more than this but the prosecutor withdrew another eight charges following her guilty pleas for the more serious offending.
Amanda Wilkie has been remanded for sentencing.
The long-held perception that New Zealand is free of corruption and bribery has been undermined by a survey commissioned by Transparency International.
Undertaken by research company Colmar Brunton, 1291 New Zealanders were interviewed with 3.6 per cent of respondents admitting to paying a bribe in the past 12 months.
Previous surveys by Transparency International found that New Zealand was perceived as among the least corrupt countries in the world, along with Denmark and Singapore.
Bribery levels were higher than Australia (2 per cent) and Britain (1 per cent) but below Singapore (9 per cent).
Transparency International New Zealand director Murray Petrie said he was surprised by the result, and would have expected a figure under 1 per cent. However, it was naive to believe New Zealand was free of corruption.
"To say that we're perceived to be less corrupt than elsewhere doesn't mean we've got none."
Transparency International pointed to recent high-profile arrests by the Serious Fraud Office as a sign of increased corruption. Nick Paterson, SFO fraud and corruption manager, said little was known about the actual extent of bribery in New Zealand.
Establishing the extent of corruption was a "key focus" of the SFO, he said.
"Internationally, corruption is widespread, so logic would suggest that if there isn't corruption in New Zealand that it will find its way here eventually."
PVL’s Integrity test is the only test available to employers in New Zealand that will alert you if you are about to hire a job applicant predisposed to bribery.
Contact us today for an obligation-free demonstration.
KPMG today released its ninth biannual Fraud and Misconduct survey.
In its survey of 200 companies and organisations throughout New Zealand and Australia, 53% of respondents experienced at least one incident of fraud and the average loss rose from an average NZ$1.9 million in 2008, to NZ$3.8m this year.
The survey showed the most common motive for fraud was pure greed, though gambling or personal financial pressures were also common excuses. Respondents believed that only a third of the total losses were being detected.
On average it took 399 days to detect a major fraud and in 61% of the cases no money was ever recovered.
A break-down in internal controls allowed staff to get away with money, often by simple methods, such as internet-based electronic funds transfers. Staff may also switch their personal bank account details with those of a supplier to the company, before processing an invoice.
A company’s best protection against fraud is not to hire individuals predisposed to committing fraud in the first place. Outsourcing the background screening of job applicants is a proven method of reducing a company’s exposure to employee fraud.
You can read KPMG’s report on their website here>>
Vicki Lee McCaskie, a 44 year-old old Tauranga Westpac Bank officer was today sentenced after earlier pleading guilty to defrauding her employer of $25,591.
She befriended a bank customer but went on to steal $17,591.51 from the elderly widow. When the customer received her bank statement and noticed the discrepancy she contacted McCaskie who tried to convince the woman she had withdrawn the money to buy Bonus Bonds. Knowing this wasn't true the 84 year-old customer contacted bank officials and the Police. McCaskie stole a further $8,000 from the bank’s ATM machine.
McCaskie submitted numerous references and testimonials to the sentencing Judge and he took these into account when sentencing her to five months' home detention and 250 hours' community work.
PVL Update (4 August 2011): McCaskie appeared in Court again today for sentencing on further employee theft charges. After reading in the newspaper about McCaskie’s earlier offending (above) another customer checked her account and complained that $41,000 had been taken from it without authority.
For this additional offending McCaskie was sentenced to four months' home detention, 200 hours of community work and ordered to pay back the money. McCaskie was dismissed from her job at a childcare centre after she was arrested this second time.
Twenty-nine year-old Westpac Bank officer Scott Kendall was today sentenced to 12 months' home detention, 175 hours community work and ordered to repay $61,236 after having been convicted of using his position to defraud his employer.
From December 2005 to December 2007 Kendall stole nearly $100,000 by creating fake accounts and obtaining credit cards under false names.
When caught, Kendell tried to blame two work colleagues for some of his frauds.
Janette Kemp, a 47 year-old Supervisor at the Hawera New World supermarket has been convicted of stealing $92,680 from her employer. She was sentenced to eight months' home detention and ordered to pay full reparations.
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 drug 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.
Hendrika Margaret Pijper a 54 year-old Dutch national of Christchurch was today sentenced to 12 months imprisonment for stealing $68,000 from her employer.
Pijper offered to repay the stolen money at $25 a week. At that rate it will take her more than 50 years to repay the money.
In 2003, Pijper, who went by the name Hendrika Margaret Shaskey, was sentenced to five years imprisonment after being convicted of sexually violating a boy from the age of 13 until he was 18 years old.
Letitia Lilly Anne Proctor, a 23 year-old Palmerston North Case Manger at Work & Income (WINZ) has been sentenced to seven months home detention for defrauding her employer of $27,528.
Proctor worked at the Government welfare agency from April 2006 to June 2010 and used her inside knowledge and access to pay herself unauthorised welfare benefits, including accommodation supplements and family assistance. As well, she provided false medical information to secure disability payments.
She also claimed benefits in the names of five people she knew no longer lived in New Zealand and had the 37 payments made to these clients, redirected to her own bank account.
Proctor also altered a birth certificate to create a false identity for a child she said belonged to a fictitious client who had left the country. She subsequently applied for an unsupervised child benefit in her own name for the fictitious child, alleging the child had been abandoned by its parents.
She also defrauded South Canterbury Finance by using false documents, including passports, employer letters and bank statements to secure $9761 in loans.
Letitia Proctor was ordered to repay the $27,528 she defrauded from WINZ.
PVL Update (9 August 2012): Proctor was today sentenced to eights months imprisonment for further fraud committed against WINZ whilst serving Home Detention for her original offending.
Proctor lied to WINZ to gain a number of welfare benefits by claiming to have care of a 17 year-old child, and also that her husband had left her.
After her Home Detention sentence was finished she began working for TalentPoint, a recruitment company, but simultaneously applied for further welfare payments that she was not entitled to.
Michelle Campbell, a 42 year-old Business Manager employed by Tauranga motor vehicle dealer Ebbett Tauranga Ltd was today sentenced to four years imprisonment after earlier being 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 would tell 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 became suspicious when one of its customer’s cheques made out to “Cash” for $25,000 was deposited into Campbell’s account.
Martin Roger Finnerty, age 54, and Ngaire Finnerty, age 46, were today sentenced to 100 hours community work after having been found guilty of stealing more than $1,000 worth of food donated to the Dunedin Salvation Army and intended for distribution to the needy and homeless.
The couple had worked as volunteers for more than seven years and every month would use a church van to collect donated food from companies. Discrepancies in the van’s mileage were detected and the couple were put under surveillance by the Police.
The Finnerty’s were observed unloading boxes at an unknown address, before taking the rest to the food bank. They later returned to the address and took the groceries home
In a statement, the Salvation Army said the effect of the theft on the community was immeasurable because it was not known how long it had been happening or how much food had been taken.
Charity fraud is becoming increasingly prevalent in New Zealand. Searching (Ctrl+F) the word “charity” on this webpage with bring up cases where local charities have been defrauded, sometimes up to six-figure sums.
It is tempting to overlook the background screening of volunteers, but it is just as important as verifying paid employees. The donating public make no distinction - any fraud inariably leads to a dropping off in support for the charity.
Rodney David Mason, the 57 year-old Manager of the Vincentian Recovery Centre Trust, a Christchurch Alcohol and Drug Rehabilitation facility, was today sentenced to 3 years and four months imprisonment for stealing $654,756.
Between 2005 and 2009, Mason regularly invoiced the Christchurch District Health Board (DHB) for addiction treatment services that were never provided and also forged signatures in order to cash Trust cheques
More than $364,000 of the money was gambled away through a TAB betting account from 2006 to 2008, at a time when his salary totalled $130,000.
Mason was originally charged with 465 offences but they were subsequently replaced with three representative counts covering all the offending. The fraud was only discovered by a random Ministry of Health audit.
As a result of the fraud the Trust was forced to close, and its assets sold to realise $170,000 as part repayment to the DHB. Mason was also ordered to pay reparation of $48,000.
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.
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.
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."
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
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.
PVL Update (8 July 2011): Garnett’s former employer has instituted civil proceedings seeking to recover the money she stole from them, plus a further $90,000 it spent investigating her fraud.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
PVL Update (17 September 2010): Following his sentencing last year, Bloomfield sucessfully applied for home detention instead of serving his sentence in prison. He has also since been censured and deregistered by the Teachers Disciplinary Tribunal for his offending.
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.
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.
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.
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.
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 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.
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.
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.
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.
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.
As the time of her appointment in November 2007, the CEO of the company released a press statement saying “We are lucky to be able to attract exceptionally capable people from the business world to help make us more professional so we can focus on providing excellent education and care in all our centres.”
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.
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.
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."
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>>
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.
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>>
Krystie McGowan, a 20 year-old accounts manager for a Tauranga Valuation company was convicted today of stealing $41,506.95 from her employer.
In the space of ten weeks she made 57 unlawful transfers from her employer’s bank account into her own.
McGowan was sentenced to five months home detention and ordered to make full reparation - $5,000 immediately, $7,000 from the sale of her car, and the balance at the rate of $30 per week.
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.
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.
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.
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.
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".
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
Twenty-two year old Larissa McMillan of Hanmar Springs has been convicted of stealing an estimated $60,000 from her employer over an 11 month period.
She was sentenced to eight months imprisonment with leave granted to apply for home detention.
There is no possibility of McMillan repaying the money. Her lawyer said she spent much of it on alcohol and party pills.
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.
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.
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.
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»
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.
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.
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.
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.
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.
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.
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.
PVL update (29 November 2011): Phipps appeared again in Court today for sentencing on 20 new fraud charges, including buying a $30,000 powerboat and a $16,000 car while posing as her mother-in-law, and stealing more than $35,000 from friends, neighbours and employers.
In one case she asked a friend to write her a cheque for $28.06 in exchange for $30 cash but then altered the cheque so it read $2806, before using it to pay an outstanding rent bill.
Phipps was convicted and sentenced to 12 months of home detention, ordered to pay reparation of $35,538.37, with $5000 to be paid immediately, and the rest at $75 per week.
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.
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.
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>>
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.
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.
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.
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.
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.
PVL update (25 March 2011): Ford was again before the Court today where she was sentenced to three years imprisonment after being convicted of 33 charges of defrauding WINZ of $231,204 over a 13 year period.
She created numerous fake identities and also used the names of New Zealanders she knew were living overseas to claim sickness benefits, domestic purposes benefits and accommodation supplements. She was described by WINZ officials as “the face of greed”.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.