NZ’s ‘Corruption Free’ Rep Suffers Massive Injury

New Zealand’s corrupt underbelly has been exposed briefly again with the prosecution of  a former Accident Compensation Corporation  (ACC) property manager: Malcolm David Mason.

The ACC is a Crown organisation, its role is set out by the NZ government and it provides injury cover for all New Zealanders and visitors.

According to various news reports

A former ACC national property manager has admitted taking a bribe worth $160,000, accepting a $9,000 business trip to Singapore and passing on a confidential document.

Malcolm David Mason, 50, today pleaded guilty in Wellington District Court to three charges of corruption and bribery brought by the Serious Fraud Office (SFO).

Mason, who had worked for ACC for 32 years, admitted receiving a bribe of $160,000 from a property developer in relation to the construction and leasing of a new ACC branch office.

Mason also admitted accepting a business class trip to the 2008 Singapore Grand Prix from a real estate agent in return for helping him secure a long-term lease for another ACC building.

He also admitted passing on a confidential email listing all government departmental security officers to a businessman involved in installing security systems.

Almost all employee fraud in New Zealand is committed by longer-serving personnel (because they have learned how to circumvent procedures) source.

A second man has been charged and is to also face trial. There’s no indication as to whether the people who paid the bribes are to be prosecuted as well.

New Zealand has a reputation as a country that is perceived to be free from corruption, but as cases like this demonstrate, that perception is a fragile thing and can be very easily challenged, indeed some may argue that the reputation isn’t deserved when government organisations are caught up in these scandals.

For example: A Work and Income government employee was sentenced to seven months home detention for defrauding Work and Income of $27,528

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. (source)

Local government has its problem staff too. Ecan closed the stable doors after this horse bolted:

“Two former clerks employed by Environment Canterbury at the Bus Exchange have admitted stealing $82,000 cash from their employer…

…Catherine Anne Ihaka, 55, and Amelia Taima Temo, 23, pleaded guilty to three representative charges of theft by a person in a special relationship instead of the 194 charges they had originally faced…

The thefts relate to the pool of money held by Environment Canterbury as unspent deposits on Metrocards. That loss is covered by insurance so ratepayers funds are protected.

“Procedures for accounting for cash transaction deposits for Metrocards at the exchange have been tightened since these losses were discovered,” said Environment Canterbury director operations Wayne Holton-Jeffreys. “Closed-circuit cameras, which monitor activities at the bus exchange, assisted in compiling evidence…(Court News, Feb 2011)

But that’s nothing. New Zealand suffered more than $72 million dollars worth of fraud in the first six months of 2010 and even that was only the “tip of the iceberg” according to KPMG forensics expert Stephen Bell.

What else is going on?

“The latest recession-driven trend in insurance fraud is for uninsured people to take out a policy after being burgled and then claim for the losses.”

Said New Zealand Insurance Council spokesman Terry Jordan. Insurance fraud is thought to cost the country between $150 million and $300m a year.

And the Global Economic Crime survey showed that economic crime continues to be a serious issue affecting New Zealand organisations with the economic crisis increasing the pressures and incentives to commit fraud. New Zealand had the eighth highest reported level of fraud across the 54 countries that took part.

Want another example of how that reputation may be un-deserved?

It appears to be that many of New Zealand’s largest listed businesses don’t pass some fundamental best practice ethics tests

said Transparency International New Zealand.

”Of the companies on the NZX 50, 44% have policies prohibiting bribery and 18% have policies on regulating facilitation payments. This does not compare favourably with the percentage of companies prohibiting bribery in comparable markets overseas. Of the top 100 companies by market capitalisation in the UK, 72% have explicitly prohibited giving and receiving bribes. In Europe the figure is 57% and in the US it is 69%.”

Read a copy of this report in the BOX Widget in the side bar ->

Further reading

Take a look at our Fraud and Dishonesty facts and stats page to see how widespread fraud and corruption are in NZ and how they damage both the public and private sectors, sometimes with devastating consequences.

One thought on “NZ’s ‘Corruption Free’ Rep Suffers Massive Injury

  1. The Kiwi teen hacker who created some truly nasty botnet software never ended up in jail? Old enough to be prosecuted, 19! Instead they slapped his wrist with a fine and Telstraclear hired him.

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