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Showing posts with label Corruption. Show all posts
Showing posts with label Corruption. Show all posts

Monday, July 19, 2010

'Least Corrupt Nation' Loses $72 Million In Fraud In Six Months



New Zealand, the country perceived to have the ‘lowest rates of corruption’ has suffered more than $72 million dollars worth of fraud in the first six months of 2010, but that is only the “tip of the iceberg” says KPMG forensics expert Stephen Bell.

According to an article on Stuff:
Cash-strapped Kiwis bitten by recession have resorted to fraud and the full extent of it will not be known for years.
New Zealanders have swindled about $240.6m in large frauds since January 2008 and the average size of large frauds is now more than $2m, KPMG’s latest large-scale fraud survey shows.
KPMG forensics partner Stephen Bell said the extremely high level of fraud was not surprising given the backdrop of the recession.
“We haven’t seen the end of it. In the past 12 months there’s been about $150m in large recorded fraud. Our expectation for 2010 is that it will be a record year..

...“One of the issues is that companies either don’t find out about it or if they do, they often keep it a bit quiet because of the corporate reputational harm that’s done by admitting you’ve got a problem.

Any business handling cash or dealing with complex financial transactions would be at risk of fraud “at some time”, but it was important to remember the vast majority of employees were honest, he said…full report here
For background reading about the lack of controls over the high levels of fraud perpetrated in New Zealand read our Wordpress blogs:

Kiwis use fraud to maintain lavish lifestyles

ACC calls in Serious Fraud Office

Today's posts - click here

Thursday, February 11, 2010

Allegations Of Bribery At Housing New Zealand?

Back in November we talked about how New Zealand had a higher rate of economic crime than its near neighbours, way above the world average: a massive 42% of businesses in New Zealand had suffered economic fraud in the previous 12 months against a global average of 30%.

Now it's emerging that the country may have problems with bribery within one of its government institutions. Readers will already know of (Ex) MP Phillip Field found guilty of bribery and corruption. The former immigration boss Mary Anne Field who "consistently breached" the requirements of public servants to manage conflicts of interest. They may also remember Former list MP Donna Awatere Huata who was convicted of fraud.


Voxy first hosted a HNZ press release yesterday that carefully avoided the "B" word:

Investigation Of An Allegation Of Improper Practice Underway
"Housing New Zealand is investigating an allegation a staff member has been offering applicants for state houses preferential treatment, in return for money, Chief Executive Dr Lesley McTurk said today.

"I can reassure everyone this situation is being thoroughly investigated. Immediate employment action has been taken," Dr McTurk said. "Once our investigation is complete, it will be possible to make a decision whether it is appropriate to bring the matter to the attention of the Police....."
Today the Herald is running a story saying that it may not be just a single employee that's involved and, in an article that mentioned the dreaded "B" word five times, said:

HNZ bribe claim not first allegation - tenant advocate
"Allegations that a Housing New Zealand (HNZ) staff member has been taking bribes is not the first claim of its kind, says a tenant advocate. Piripi Gray said he welcomed the investigation and had previously heard of other allegations of bribery at HNZ.

He said tenants were vulnerable and felt intimidated by HNZ staff.
"But if they come forward than people can really see what is happening inside Housing New Zealand," Mr Gray said. He said tenants had complained to him in the past that application forms were not being processed and that HNZ staff were asking for goods such as stereos."
Stereos?! well at least they won't show up on the bank statements. The Herald closed with:
"New Zealand Federation of Family Budgeting Services secretary Raewyn Fox said many of her clients were also clients of Housing New Zealand but she had never heard of bribery.
"I have heard mumbles about the waiting lists though," Ms Fox said. "Even the suggestion that something like this has happened will damage their confidence," she said.

Housing Minister Phil Heatley praised HNZ for its "swift action".
"Prospective Housing New Zealand tenants and the wider public must have confidence in the probity of the state house system. I'm confident all necessary steps are being taken to ensure that is the case," Mr Heatley said.

Mr Heatley said anyone with complaints about HNZ could call the authority's complaints line in "absolute confidence" on 0800 801 601."
Absolute confidence?

A typical call may go something like this "Oh yes, a while ago I gave this chick at HNZ my stereo so she wouldn't 'lose' my paperwork again. You're not going to take my home off me are you?" How many calls do you think HNZ is going to get from tenants who already feel "vulnerable" and "intimidated"?

We have a feeling that this one will run and run but we don't think that HNZ's complaint's line is going to be red hot.

Stand by to see what else comes out of the woodwork over the next few days.

Friday, November 20, 2009

Global Economic Crime Survey - Fraud Thriving In New Zealand

source PWC Global Economic Crime Survey

Despite the hype put out about New Zealand's perceived 'freedom from fraud and corruption' the reality seems to be very different, NZ has higher rates of economic crime than its closest neighbours and is way above the world average.

The Global Economic Crime Survey, carried out annually by one of the world's largest accountancy  professional services firms PriceWaterhouseCoopers, showed that a massive 42% of organisations in NZ had suffered from fraud in the last 12 months (against a global average of 30%) and 46% of it was committed by middle and senior management. The average fraud is costing around $500,000 in each business.

PWC is one a Big Four auditor, alongside KPMG, Ernst &Young and Deloitte Touche Tohmatsu so their report will carry a lot of credence. This is the largest international survey of its kind with over 3,000 organisations taking part across 54 countries. 85 organisations from across the public and private sectors took part in the survey: From the PWC website:
  • Asset misappropriation (theft) was the most common form of fraud, cited by 86% of New Zealand respondents.
  • Financial statement fraud was cited by 36%
  • Intellectual property theft at 17%.  
  •  In 72% of all cases the fraud was committed by someone inside the organisation.
"(The) survey shows that economic crime continues to be a serious issue affecting New Zealand organisations with the current 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, with 42% of our respondents saying that they suffered from some form of economic crime in the last 12 months. The average cost of fraud in New Zealand was $491,506 with one organisation reporting that economic crime cost them in excess of $7 million in the last 12 months.

Since (the) last survey in 2007 we have noticed a significant trend in the perpetrators of fraud towards middle and senior management. When we align that trend to the fact that New Zealand organisations say that staff reductions have resulted in fewer resources deployed on internal controls and that internal audit were being asked to do more work with less staff, we believe that there is cause for concern. It is people in middle and senior management that are more able to override controls within an organisation."

"Perpetrators of fraud"
"Internal fraudsters were the main perpetrators in 72% of fraud reported by New Zealand respondents. This figure is significantly higher than Australia (33%), Asia Pacific (57%) and globally (53%). When we looked at the sector responses, the government and public sector in New Zealand had the highest rate of internal perpetrators with 89% of frauds within this sector committed internally."

In one recent case an ASB investment banker pleaded guilty to three fraud charges. He allegedly defrauded clients of $18 million over 9 years until the bank sacked him. The amount taken is greater than the $16.9 million fraud by a staff member of the Otago District Health Board which was previously New Zealand's largest proven employee theft.

So much for New Zealand topping the international index for the least corrupt country. We are shocked the both the government and public sectors are involved. We're now watching for a backlash against the report and expecting a damage limitation offensive to be launched any time now.

See also 

$1.8m contract let without tender after $500,000 gift:
"Hastings District Council has let a $1.8 million road-building contract without competitive tender after receiving a $500,000 "donation" from a company..."
(Ex) MP Taito Phillip Field found guilty of bribery and corruption

Former immigration boss Mary Anne Field "consistently breached" the requirements of public servants to manage conflicts of interest.

Former list MP Donna Awatere Huata convicted of fraud

A couple in Timaru lost $100,000 in an nvestment fund stolen by their financial adviser, who was a member of an industry watchdog.
'KPMG survey shows fraud costing NZ millions' - poor internal control remains the major factor allowing fraud to occur with 49% of respondents experiencing fraud.


Today's posts - click here

Tuesday, October 6, 2009

Taito Phillip Field Found Guilty - Sentenced To Six Years

4 August 09
Former MP Taito Phillip Field has been found guilty on 11 out of 12 charges of bribery and corruption and various other charges related to obstructing or perverting the course of justice. The case was brought after allegations that Thai nationals received immigration assistance in return for working on Mr Field's property. See also Trouble in paradise

Mr Field once held the position of Minister outside cabinet, with the portfolios of Associate Minister for Pacific Island Affairs, Associate Minister for Social Development and Employment, and Associate Minister for Justice until he was stood down in 2005.

Update 6 October
Mr Field was sentenced today to six years in prison - 2 for perverting the course of justice and 4 for corruption.

Monday, May 25, 2009

Inefficient Immigration System Still Ruining Immigrants' Lives

The news report about the the Habr family, resident in New Zealand for five years and so messed around by the Immigration Service whilst trying to obtain permanent resident visas that they decided to take their skills to a more appreciative country shows that despite a lot of spin to the contrary the NZ immigration service still seems to be in disarray: Link Stuff. Indeed, little if nothing, seems to have changed since the election.

The immigration service, part of which has been referred to as having a "fiefdom mentality", has come in for a lot of criticism in recent years for its perceived inefficiency, secrecy, and inconsistencies. Don Brash, ex leader of the National party drew attention to how the lives of some ordinary, hardworking people were being adversely affected. And it's not just Asian people that get treated abominably, all races seem to get the same degree of indifference and incompetence, even Kiwis in their own country.

These are some quotes Don Brash made a while ago.

Dr Dean Kenny, former All Black.
"He complained that the Immigration Service had initially turned down the application of his Welsh-born wife even though they had been married for nine years and had two daughters, both of whom had New Zealand passports. The Service had asked for photos of him and his wife together, copies of letters, proof of shared income, shared bank accounts and evidence of public or family recognition of the relationship. The Asian spouses of New Zealand citizens encounter the same problem routinely."

Mrs M Taylor
"Described in a letter she wrote to the Listener. New Zealand-born herself, she decided after 20 years overseas to return to New Zealand. She described gaining residency for her non-New Zealand husband as "an appalling trial, financially and emotionally.

Married for 12 years and now with three children, we sent our wedding certificates, children's birth certificates and family photographs to immigration, only for them to be returned and we were told that we hadn't fulfilled the requirements of our application and further proof of the validity of our marriage was required, not less proof that we were sexually exclusive during our marriage....

It's understandable that there needs to be a rigorous system", she wrote, "but why are born-and-bred New Zealand passport holders put through this?"

Dutch expert in growing hydroponic tomatoes under glass
"Desperately needed to ensure the commercial viability of an operation employing hundreds of people, but kept waiting for months and months with his Dutch wife and young New Zealand-born children while the Immigration Service pondered whether to grant him permanent residence."


Last year 'North & South' Magazine run an in-depth story into INZ's problems titled:

"Can Immigration NZ Be Fixed?"

"Our immigration service is dogged by claims of incompetence and corruption, its last head (Mary Anne Thompson) resigned after allegations of nepotism and faked qualification, and the department is subject of a wide ranging inquiry by the Auditor-General."

These are just some of the many issues that that Caroline Courtney highlighted in the article:

Staff training
NZ immigration staff spend about 5 days in the classroom undergoing training , compared to British immigration officers taking a 10 weeks course of initial training with six weeks in a lecture room.

No confidence in the Service Head
Earlier in the year the then head of Immigration, Mary Ann Thomspon, was alleged to have doctored her CV, in which she claimed to have a PhD from the London School of Economics. Revelations also emerged that three of her Kiribati relatives were granted residency after the quota for Kiribati relatives had been met.

Excessive Workloads and mistakes
An immigration officer had written anonymously to the Auditor-General blowing the whistle on excessive workloads, bosses obsessed with staff meeting output targets, permits being issued to high risk applicants with fake job offers, insufficient time to properly check relationships and a mindset that referred to applicants as "widgets"

Migrants Messed Around, Humiliation and Stress
Anh Van Do 44, a self employed drain layer who'd been in NZ for 10 years had permanent residency and wanted his wife and 2 year old daughter to come and live with him in New Zealand. For almost three years INZ refused to accept that theirs was a genuine relationship.

INZ turned down his wife's application for both a work visa and then a visitor's permit.

Then his wife fell pregnant and when the baby was found to be wasn't found to be developing normally a medical assessor said the child was likely to present significant costs to the NZ health service.

When the magazine contacted INZ they were told that if Anh's wife and child wanted to apply to visit they would have to show further evidence of their relationship, and have the child's health reassessed - despite INZ already having declined the child a medical waiver. Anh, who has found the whole protracted situation incredibly stressful, had visited his family in Vietnam 8 times and spent over $15,000 on phone calls alone. He was adamant that he would be able to provide financial security for his family.

"John" a South African had been in New Zealand with his family for three and a half years years when they were invited to apply for permanent residence but the application was halted when the wrong police records* were assigned to his name.

John had been waiting weeks for a fresh work permit so that he could start a new job with as a tradesman with a local authority, he'd already lost 3 weeks income and risked losing his job offer if the permit didn't come through soon. Desperation kicked in and after multiple calls to INZ's call centre he dumped himself in their local office until someone finally saw him and granted him a 3 month limited purposes work visa.

*Back to those police records - when N&S contacted NZIS they found that someone else's police record had been assigned to his application: namely
1. A South African police docket for a person with a completely different name, and
2. An "arrest warrant" without an official letterhead and with a handwritten abbreviation of his name.

Incredibly, the application for the "warrant" was made after the date the warrant was signed. John said "Immigration's total incompetence has cost me and my family three and a half years of humiliation and stress"

Later, after N&S had sent the article to press John emailed the magazine to say that MP Gordon Copeland had granted him a "character waiver" and his families residencies have been approved "subject to any further immigration requirements" But he wasn't holding his breath - INZ had then told him to undergo another full medical and that his family needs to apply for new temporary visas while the dept processes their resident application.

Inconsistency
Private immigration consultant John Horan gave an account of how NZIS middle managers who "use their positions to manipulate policies and cause untold stress" and said that verification officers "run around like secret police" - eg. tracking down foreign chefs at work to assess their spoken English.

Horan had been battling INZ for 4 years to try to get PR for two South Korean children now aged 16 and 17 who have lived with their adoptive mother mother who was a permanent resident.

INZ refused to recognise the children's legal adoptions in South Korea. So far Horan had carried out $20,000 worth of pro bono work because the mother couldn't afford the costs. Twice he'd taken the case to the Residence Review Board who referred it back to INZ for "correct Assessment" but with no luck, despite precedents for granting PR to other children adopted in South Korea as recently as 2007.
-------

Further reading:

News reports about the corruption trial of Tito Phillip Field: Link
"Former Cabinet minister Taito Phillip Field got several Thai nationals to work on his houses for little or no money in exchange for immigration help and then tried to derail investigations into them, a jury has been told."

see also: Web reports about Helen Clark's sacking/the resignation of Leanne Dalziel, former immigration minister:

NZ Immigration Minister Quits
"New Zealand Immigration Minister Lianne Dalziel has been forced to resign after she was shown to have lied about leaking a document to the media.

Ms Dalziel had denied knowing about the leak, but later admitted she authorised giving the document to the media.

Prime Minister Helen Clark accepted the resignation after Ms Dalziel's comments were shown to have gone from "being misleading to being untrue", she said.

The document related to a controversial asylum bid involving a Sri Lankan girl.

The document was from the Refugee Status Appeals Authority, which lawyer Carole Curtis took with her to show her client, a 16-year-old Sri Lankan girl, at the Mangere Refugee Resettlement Centre last June .

The girl claimed that she had been sexually abused in Sri Lanka, and was seeking asylum. To comfort her, Ms Curtis drew a guinea pig on the letter and made some handwritten notes, including "If all fails: Media. "

It was not clear how the letter came into the hands of the immigration ministry, but it has since confirmed it passed it on to a New Zealand TV channel, on Ms Dalziel's authorisation. "



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