by: Matt Nippert
The Serious Fraud Office is pushing to update New Zealand’s 103-year-old law criminalising bribery and is probing a rare complaint of bribes paid to overseas officials by a New Zealand company. The call came during the New Zealand Institute of Accountant’s forensic conference in Auckland today, where insurance industry executives also outlined what they said was a growing problem of fraudulent claims related to the Christchurch earthquakes.
The SFO’s general manager of fraud and corruption Nick Paterson said he was “hopeful” this year the Secret Commissions Act 1910 would be beefed up with more substantial penalties.
Maximum penalties under the Act amounted to only a $2000 fine and two years in prison, and Paterson said a sentence of that level was likely to result only in home detention.
“You can carry out a corrupt act, get found guilty, and spend seven months with your feet up in front of the television,” he said.
“You may as well be fining someone a peppercorn and sending them off on their horse.”
Paterson also said his office was focusing on cracking down on bribes paid by New Zealand companies to secure access to overseas markets, despite a lack of complaints, prosecutions or convictions.
“There’s a trillion dollars of bribes being paid around the world,” he said, adding none were allegedly paid by New Zealanders or New Zealand companies.
“I’m absolutely staggered and actually – worse than that, I simply don’t believe it.”
Paterson said his office had received a complaint of foreign bribery two weeks ago and said he would be liaising with the Australian Federal Police on how to proceed.
“It will be extremely hard to investigate,” he said.
“We haven’t got much experience, well I mean clearly none, at investigating these sorts of allegations.”
While the SFO said it was concentrating on bribery offshore, the forensic conference also heard Christchurch’s post-quake spirit of camaraderie had dissolved and insurance industry leaders were concerned of a growing spate of fraudulent claims.
Paterson said international studies indicated as much as 15 per cent of the expected $40 billion cost for Christchurch could “leak” due to fraud.
“Understandably fraud management wasn’t the top priority in that environment – in the immediate aftermath,” an insurance executive said.
Accommodation benefits for those with uninhabitable homes had been abused, the executive said.
“A woman claimed for two nights at a Queenstown resort at $1000 a night, including golf and spa,” the executive said
It was later discovered the Queenstown holiday had been booked before the earthquake, and the claim was rejected.
In another example a developer had padded a legitimate claim for $1.5 million with $30,000 of false property losses, and the matter had been referred to the police.
This article was written by Matt Nippert and originally published on stuff
