10. JUDITH COLLINS (National—Clevedon) Link to this
to the Minister for Social Development and Employment
How many identities did Wayne Patterson use to fraudulently obtain benefits from Work and Income and what was the total value obtained broken down by type of benefit received?
Hon STEVE MAHAREY (Acting Minister for Social Development and Employment) Link to this
I am advised that Wayne Thomas Patterson used 123 unique, unlinked, and totally internally consistent identities to defraud the ministry of $3.4 million. He stole $608,347.25 in unemployment benefits, and $2,808,395.66 in New Zealand superannuation. As the judge in the case said, Mr Patterson was involved in what amounted to “a full time occupation of serious dishonesty. It is very far removed from what is commonly called benefit fraud.”
Can the Minister confirm that a bank officer, not Work and Income staff, detected Wayne Patterson’s benefit fraud; and that if the bank officer had not picked up this suspicious activity there is every chance that Wayne Patterson would still be getting away with these crimes?
Hon STEVE MAHAREY Link to this
My information is that, yes, that was the case. The bank officer did that because Mr Patterson made a mistake. But I want to point out, as the judge did, that this is an extraordinary case of a person who put his heart, mind, and intelligence into 123 different identities to defraud the State.
Lesley SoperWhat steps has the Government taken to recover the money and ensure that cases like this one do not happen again in the future?
Hon STEVE MAHAREY Link to this
Mr Patterson’s assets have been seized, and I am advised that the Ministry of Social Development expects to recover over $4 million—$3.4 million was defrauded, but over $4 million will come back. I want to stress that there is a zero tolerance to benefit fraud. The ministry has implemented a new system of daily checks against the birth register, strengthened the photographic identification requirements, and established an intelligence unit to deal specifically with fraud cases. Departments are working together to identify issues of identity fraud. However, even the most robust system will be vulnerable to the most determined fraudster. But as Mr Patterson’s case shows, even the most able fraudster eventually gets caught.
Why did the ministry not consult the Serious Fraud Office when it realised it was dealing with a fraud of well over $1 million; and why were the police not involved to the usual extent in a fraud of such magnitude, despite a previous assurance from the ministry that it was policy to refer any significant fraud investigations to either the police or the Serious Fraud Office—why did the ministry keep it in-house?
Hon STEVE MAHAREY Link to this
One thing I would point out, in relation to the end of the question, is the highly successful conclusion of this investigation that resulted in the State getting back in excess of $4 million when it had lost $3.4 million, which says that the way this was handled was obviously very effective. The operation included senior staff from the Ministry of Social Development, its investigators, the New Zealand Police, the Department of Internal Affairs, the Crown Law Office, Crown-warranted criminal prosecutors, and forensic accountants, and was done in liaison with the Inland Revenue Department. The member is right. The Serious Fraud Office was not involved in this investigation but, as I said before, the investigation was highly successful.
Is it not the case that after the ministry gave away $3.4 million, it then got lucky—the bank found the fraud, the gold price went up, the currency rate went up, Apple computer shares went up, and the fraudster wrote incriminating letters from prison and then pleaded guilty—and surely the Director of the Serious Fraud Office was correct when he wrote: “The role adopted by the ministry as the investigator, the prosecutor, and the political adviser of this significant fraud, in which it was also the victim, raises perception issues that would have been avoided had the police or the Serious Fraud Office been responsible for the investigation and prosecution.”?
Hon STEVE MAHAREY Link to this
No one gave any money away. This person, as the judge said, was a unique fraudster and outstanding in his own field—literally, because no one else has ever done this. There were 123 unique, unlinked, absolutely different identities used by this person, so no one gave money away; this person stole it. Of course I want to point out, as I said before, that the investigation was successful, to the extent that over $4 million will be returned.
Does the Minister believe that if the powers of the Serious Fraud Office had been used rather than ignored by his ministry, his chief executive would not have written to the sentencing judge: “I acknowledge that Mr Patterson has now agreed to allow the proceeds of crime orders to proceed and I appreciate his cooperation in this.”; and why are we relying on the good graces of a criminal rather than using the laws that have been designed for this very situation?
Hon STEVE MAHAREY Link to this
The answer is no. I just repeat that the success of this investigation is that we are sitting here today, as taxpayers of New Zealand, looking at a uniquely outstandingly different form of fraud that has now been defeated. The person has been prosecuted, and in excess of $4 million will come back.
I raise a point of order, Madam Speaker. There is no way that the House would know the contents of that report, or even what it is about.
Madam SPEAKERI seek leave to table the report of the general manager of Benefit Integrity Services that recommends—