New Zealand’s Department of Internal Affairs (DIA) has launched its largest-than-ever prosecution for gambling grant fraud.
Twenty-three individuals appeared in the Auckland District Court on February 12, facing over 500 charges under the Crimes Act 1961.
The NZ$3.2 Million “Sham” Network
The investigation, dubbed Operation Indago, uncovered a complex scheme involving six charities and incorporated societies. These organizations allegedly obtained NZ$3.2 million in community funding intended for local organizations.
Vicki Scott, the DIA’s Director of Gambling, described the probe as a “mammoth and complex investigation”. She alleged that much of the money was diverted through bogus salary payments to “sham” employees. “A number of the charities appear to have been ‘sham’ not-for-profit organisations, set up for the sole purpose of obtaining funding,” Scott stated.
Cynical Abuse of the System
The New Zealand’s Department of Internal Affairs also alleges that some defendants used a pokie venue to launder grant funds back to operators to cover gaming machine profits. Scott characterized the arrangement as a “cynical abuse of the gambling system”.
Under New Zealand law, Class 4 operators must return at least 40% of profits to the community; the DIA has vowed to protect this integrity. Defendants face up to 10 years in prison if convicted of using forged documents.
