21 March 2013

Serious Fraud Office focus on Christchurch

The Serious Fraud Office (SFO) has confirmed various measures they are taking to address the risks of fraud and corruption during the Christchurch rebuild.

SFO Acting Chief Executive, Simon McArley confirmed that SFO had been working closely with the New Zealand Police, CERA and a number of other agencies with key roles in Christchurch. He explained that part of this work has also involved educating a range of stakeholders, insurers and construction companies to be alert for fraud and not be complacent about risks.

“We are also part of a Christchurch Fraud Prevention Working Group involving a number of government agencies, as well as another working group led by the Office of the Auditor General. These working groups meet regularly to share information and ensure agencies are well coordinated about potential rebuild risks. In October last year we arranged for Peter Dent, an overseas recovery fraud expert from Deloitte, to speak to a range of stakeholders about international disaster recovery fraud experiences,” he said.

He added that the Office currently has two investigations relating to the Christchurch rebuild and that these are progressing well.

SFO team members are in regular contact with insurers about the level of fraud being experienced by them, and recently attended the Insurance Fraud Working Group. Working together with other agencies is key to staying on the case and they also meet regularly with the Earthquake Commission and Southern Response.

Learnings so far show that the majority of insurance fraud being reported does not meet the criteria for investigation by the SFO, however Simon McArley emphasises it is important that the SFO are vigilant for any serious and complex fraud that will likely occur as the rebuild develops.

“Early intervention will minimise the scale and impact of such offending,” he said.

"An essential element in early intervention is the willingness of the business community and public to come forward with information. SFO encourages anyone with information that they believe may indicate fraudulent or illegal conduct in relation to the rebuild effort, to get in contact with either SFO or the Christchurch Police."

Role of the SFO
The Serious Fraud Office (SFO) was established in 1990 under the Serious Fraud Office Act in response to the collapse of financial markets in New Zealand at that time.

The SFO operates three investigative teams:
• Evaluation & Intelligence;
• Financial Markets & Corporate Fraud; and
• Fraud & Corruption.

The SFO operates under two sets of investigative powers.

Part I of the SFO Act provides that it may act where the Director “has reason to suspect that an investigation into the affairs of any person may disclose serious or complex fraud.”

Part II of the SFO Act provides the SFO with more extensive powers where: “…the Director has reasonable grounds to believe that an offence involving serious or complex fraud may have been committed…”

The SFO’s Annual Report 2012 sets out its achievements for the past year, while the Statement of Intent 2012-2015 sets out the SFO’s three year strategic goals and performance standards. Both are available online at: www.sfo.govt.nz

ENDS

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