Prison and home detention for poker machine fraudsters

News from SFO
Two out of three of the defendants found guilty in June of ‘Obtaining by deception’ in a Serious Fraud Office (SFO) prosecution of a multi-million dollar gaming machine fraud have been sentenced in the Wellington High Court today.

Michael O’Brien, guilty of five charges, received a sentence of imprisonment for four years, six months.

Kevin Coffey, guilty of one charge, was sentenced to home detention for 12 months.

Paul Max, guilty of three charges, will be sentenced in the Wellington High Court on 27 July.

The case involved the manipulation of gambling licenses and grants and the offending was detected during Operation Chestnut, a joint investigation involving the Department of Internal Affairs, the Organised and Financial Crime Agency of New Zealand and the SFO. It was a significant case in New Zealand for the ‘Class 4’ gambling sector, which is made up of high-turnover gambling including gaming machines in pubs and clubs.

SFO Director, Julie Read said, “The sentences imposed today reflect the very serious nature of the misconduct in this case. The proceeds from pokie machines, intended to provide community funding for sport, health, education and other activities, were directed to entities nominated by Michael O’Brien so that he could obtain a personal benefit amounting to $6.86 million.”

Background information
A Pokies 101 guide is available at this link: http://www.dia.govt.nz/ it describes how the Class 4 gambling sector in New Zealand operates.

Crimes Act offences
Section 240 Obtaining by deception or causing loss by deception
(1) Every one is guilty of obtaining by deception or causing loss by deception who, by any deception and without claim of right,—
(a) obtains ownership or possession of, or control over, any property, or any privilege, service, pecuniary advantage, benefit, or valuable consideration, directly or indirectly; or
(b) in incurring any debt or liability, obtains credit; or
(c) induces or causes any other person to deliver over, execute, make, accept, endorse, destroy, or alter any document or thing capable of being used to derive a pecuniary advantage; or
(d) causes loss to any other person.
(2) In this section, deception means—
(a) a false representation, whether oral, documentary, or by conduct, where the person making the representation intends to deceive any other person and—
(i) knows that it is false in a material particular; or
(ii) is reckless as to whether it is false in a material particular; or
(b) an omission to disclose a material particular, with intent to deceive any person, in circumstances where there is a duty to disclose it; or
(c) a fraudulent device, trick, or stratagem used with intent to deceive any person.

Press Release – Department Of Internal Affairs
Internal Affairs has welcomed the sentences handed down in the Wellington High Court today in the multi-million dollar gaming machine fraud case.

The Department’s Gambling Compliance Director Gareth Bostock said it reflects how seriously the court views the misappropriation of community money and sends a strong message over corrupt practices in the gambling sector.

The defendants, Michael Joseph O’Brien (58) of Blenheim, Paul Anthony Max (60) of Nelson and Kevin Coffey (57) of Hastings, were convicted of Crimes Act charges of ‘Obtaining by deception’. Michael O’Brien was sentenced on five charges to 4-1/2 years’ prison and Kevin Coffey, on one charge, to 12 months’ home detention. Paul Max will be sentenced on three charges on 27 July.

The major investigation named Operation Chestnut and prosecuted by the Serious Fraud Office (SFO), involved the SFO, the Police’s Organised and Financial Crime Agency of New Zealand (OFCANZ), and Internal Affairs (DIA).

“This multi-agency approach was necessary to break through the criminal behaviour that had developed in some parts of the class 4 gambling sector,” Mr Bostock said. “New Zealand communities should expect the highest integrity from the gambling sector so that community organisations can access grants from gambling societies without the concern that funding is being directed unlawfully.

“The Department has a specialist team of investigators and continues to investigate fraudulent activity in the sector. We have developed an enduring model for working together with the SFO and the Police and will do it again if the need arises.”

Through the Chestnut investigation the Department cancelled the licences of two gambling societies and took steps to ensure that a number of unsuitable people were unable to continue working for societies or the pubs which house pokie machines. The Department is applying a high level of scrutiny to societies before licences are granted or renewed.

“We want to ensure that the right people with the right motives enter the sector and that their activities are consistent with the law,” Mr Bostock said.

“Operation Chestnut was necessary because gambling grant funding was being diverted away from the communities it was meant to serve. The sector needs to create a culture of integrity where this type of behaviour is not tolerated and everyone involved in the industry ‘does the right thing’ by communities.”

Content Sourced from scoop.co.nz
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