A major fraud case

April 15th, 2013 at 2:00 pm by David Farrar

Chester Borrows announced last week:

Associate Social Development Minister Chester Borrows today congratulated Police and the Ministry of Social Development on a joint investigation which has uncovered a sizeable welfare payment fraud out of South Auckland.

As part of the government’s new interagency fraud group, the Collaborative Action Programme, MSD and Police worked together on a case involving a bogus dental practice and hundreds of thousands of welfare dollars.

Police have arrested a 48 year old man and 51 year old woman as part of ‘Operation Novocaine’ and they face deception and other charges. They are being held at the Manukau Police Station overnight and will appear in the Manukau District Court tomorrow.

“Police worked closely with the Ministry of Social Development after it uncovered a scam involving beneficiaries who falsely claimed for emergency dental treatment,” says Mr Borrows.

“Providing false documents the pair allegedly took a 25 per cent cut of each payment. In total $375,000 was paid out since December 2011. The vast majority of the payments were benefit advances and the beneficiaries in the main are repaying these out of their regular benefit payments. The small number who received grants will also now be required to repay the money.

The amount is not major, but the number of people involved was. Each person on a benefit knew they were making a false claim or loan, as they paid the fake dentist practice 25% of the money they got from the taxpayer.

So I asked how many people were involved in this fraud scam, and it totaled 280 people. That’s a shocking number – and they are lucky all they’ve had to do was repay the loan or grant.

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17 Responses to “A major fraud case”

  1. UrbanNeocolonialist (179 comments) says:

    They should all be doing community service too (not much point in fining beneficiaries)

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  2. seanmaitland (454 comments) says:

    I think anyone found to be gaming the system should lose the ability to get any benefit from the government until a period of time has elapsed that would cover the amount they stole. And have their kids permanently removed from their care.

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  3. toms (301 comments) says:

    $375,000!!! Now just think how much the taxpayer will get back from all the white collar crims once the GCSB, IRD and police can spy on them and data match!! Billions, I should imagine. Although some of the moeny will have to spent on new prisons for them all. After all, if you’ll be going to jail for $375,000 then the sort of white collar fraud that’ll be uncovered will see half of Remuera changing address to “care of HM prisons…”

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  4. krazykiwi (9,189 comments) says:

    toms demonstrating the moral relativism of the left. No wonder socialism ends in societal collapse.

    I think the 280 people should have received a community service sentence. Simply repaying the stolen money isn’t enough.

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  5. PaulL (5,872 comments) says:

    Sean: some sympathy on people who abuse a govt service being denied it. Not so sure on children.

    I can’t believe there were 280 people in on that, and nobody thought “hey, this is wrong, I probably should tell someone.” That’s the bit that worries me – that so many people thought it OK to game the system in this way.

    To be fair, it sounds like a lot of these people were basically getting an advance – they were paying the govt back from their ongoing benefit. I can imagine not feeling as bad about that (beneficiaries aren’t known for understanding financing costs). But those who got a grant is something that very clearly they should have been thinking “hang on, that’s illegal”

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  6. Nookin (3,033 comments) says:

    Toms

    Do you have a specific problem with the rate of prosecution of white collar criminals? Have you read the papers about prosecution directors of failed companies or does that sort of news get impeded by a blocked wall of bigotry? Presumably you have some evidence of the guilt of half of Remuera or is that another reckless and unsubstantiable belch?

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  7. Manolo (13,303 comments) says:

    Parasites and criminals.

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  8. labrator (1,742 comments) says:

    Agree with PaulL

    The vast majority of the payments were benefit advances and the beneficiaries in the main are repaying these out of their regular benefit payments. The small number who received grants will also now be required to repay the money.

    If these are just advances and they’re repaying them anyway, wouldn’t this signal a failing in the benefit system if they had to go to so much trouble to get an advance? They also lost 25% of that advance too.

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  9. MD (62 comments) says:

    You commit a crime, to get an advance on your benefit, which you have to pay back. For that privilege you get to pay 25% to the people who arranged it. It’s not just illegal it’s completely stupid. These are not corrupt criminals so much as people who were conned. Did they really even know what they were doing?

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  10. itstricky (1,529 comments) says:

    I imagine Toms could be referring to the $20 MIL captured by the IRD as part of the amnesty on creative accounting i.e. Fraud just like above but some how more acceptable. Still haven’t seen a story on KB… I wonder why

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  11. Judith (7,455 comments) says:

    Not much dialogue on the low life scum of a business person behind the dentist practice that ran the scheme and encouraged beneficiaries to take part in it eh?

    I wonder if his/her tax was also up to date – or don’t they feature – just the offending beneficiaries?

    Whoever he/she was should be made to forfeit all assets for the victims – us the general tax paying public. Then lock them up – once a fraudster always a fraudster.

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  12. ex-golfer (144 comments) says:

    @ Judith
    Nice try – but unfortunately the facts are these:
    1. There was no dentist practice
    2. The fraud was about someone setting up a “fake” dental practice that never existed and sucking 25% off fake advances for dental treatment that was not performed.
    Hence your anti-business rant is completely unfounded in this case.

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  13. joana (1,983 comments) says:

    Where did these fraudsters come from?

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  14. MikeG (391 comments) says:

    seanmaitland:

    Do you also propose taking the children off tax cheats?

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  15. Thrash Cardiom (298 comments) says:

    Parasites and criminals.

    Not often I agree with Manolo but in this case I do. Any one who deliberately defrauds the benefit system should be penalised. They are fraudsters and should be charged.

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  16. itstricky (1,529 comments) says:

    Yes let’s charge them. But then. .. Why should ~700 creative accountants get an amnesty when they have effectively stolen 60x as much?

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  17. HC (152 comments) says:

    How incompetent are some of these otherwise so “smart” talking case managers they have at WINZ, when they fall for a “bogus dental service” offering services that do not exist, and then get others to apply for special needs grants for dental treatment from people that do not even seem to be dental practitioners?

    Dentists, like GPs and other health or rehab professionals should be well known, are expected to be registered and are bound by codes of ethics and the likes, naturally also the law.

    This sounds bizarre to the extreme, and I wonder whether some WINZ staff members may themselves also have been in on this. It has been so in many cases, that “fraud” is actually committed by WINZ staff themselves, at least as often as by supposed clients.

    As it is mentioned, many, if not most such special needs grants are “advances”, which have to be repaid. So it seems that those beneficiaries who took advantage of that scheme, only got some advance that they will need to repay anyway (an interest free, small loan).

    The more draconian the system will get under new reforms, there more of this and other things will go on, as people will try to get what they need to survive by any means possible, I suppose. The ones who took the “cut” are the real crooks that need to be dealt with here.

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