MEDIA RELEASE

19 August 2012

Gaming machine trustee convicted for theft

A former South Auckland gaming machine society trustee has been convicted of stealing almost $364,000 of pokie machine money that should have gone to the community.

Alvin Shane Cosgrave, 66, of Hunua, a former trustee of the defunct South Auckland Charitable Trust (SACT), changed his plea to guilty on seven charges of theft on day three of his trial (15 Aug) in the Manukau District Court. He will be sentenced on 28 September.

In September 2007 the Department of Internal Affairs decided not to renew SACT’s gambling operator’s licence because the trust’s financial viability was doubtful and Mr Cosgrave was conflicted by managing the trust’s day-to-day activities while maintaining his role as a trustee. The trust sold its operation to the Lion Foundation and said it would stop operating on 30 June 2008. On 30 November 2007, aware that its gambling licence was not going to be renewed, the trust entered into a management agreement with Mr Cosgrave’s company, Integrated Commercial Solutions Ltd (ICS). The agreement was drawn up, under Mr Cosgrave’s instructions, on favourable terms to ICS providing for compensation of $681,584.10 should the trust cease gambling operations.

An Internal Affairs’ forensic accountant reviewed the trust’s financial statements for the last 13 months of its gaming activities and found that many of the costs paid to Mr Cosgrave and ICS were not actual, reasonable and necessary expenses incurred in conducting gambling, the court was told. They also included costs for Mr Cosgrave’s pub and restaurant, the Clendon Inn in Manukau City, and the lease of a vehicle by ICS.

Internal Affairs’ Gambling Compliance Director, Debbie Despard, welcomed the conviction:
“Gaming machine society trustees are responsible for ensuring that the maximum amount possible is returned to the community. The money involved in this case should have been distributed as grants to the community. The Gambling Act makes it clear that the purpose of gambling is to benefit communities and those involved with running gaming machines in pubs and clubs are entitled only to costs that are actual, reasonable and necessary.”

In April 2011 a High Court Judge ordered Mr Cosgrave and ICS to repay to the Secretary of Internal Affairs $975,629.39 after the Department took a civil action under section 112 of the Gambling Act 2003 to recover money improperly paid.

ENDS

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