Complaints to New Zealand's Serious Fraud Office (SFO) climbed 40% over two years, reaching 1,364 in the fiscal year ending June 30, as the agency prosecuted cases worth a combined NZ$174.5 million involving everything from COVID relief schemes to multimillion-dollar kickbacks.

Fraud Office Complaints Rise 40% in New Zealand

The office handled 54 defendants across 23 separate prosecutions during the year, securing 10 convictions on 140 charges. Most complaints came from the public, though the agency also opened 10 cases on its own initiative based on intelligence and received 10 referrals from other government organizations.

The 13% year-over-year jump in complaints adds pressure to an agency that cut a dozen positions this year to meet government budget targets. Most complaints fell outside the fraud office's mandate to investigate serious or complex fraud, but each still requires evaluation and response.

“This year’s results reflect the dedication and agility of our team in responding to increasingly complex threats to New Zealand’s financial and economic wellbeing,” SFO Chief Executive and Director Karen Chang, said. “These are difficult cases which are of critical importance. We strive to direct our specialist resources towards the cases that will achieve the greatest impact.”

Biggest Cases Target Government Funding

The country's largest private-sector corruption case resulted in three-year prison terms for two IT contractors. Sean Bryan paid Mark Lester NZ$4.1 million in kickbacks between 2014 and 2017 in exchange for NZ$20.7 million in contract work at Spark, the country's largest telecommunications provider.

Lester held a senior technology role managing platform upgrades at Spark. He recommended Bryan's company, Victory IT Ltd, for testing work without disclosing their relationship. Bryan made 32 payments to Lester ranging from NZ$10,500 to NZ$379,500 with no legitimate commercial purpose.

Another major case involved Auckland resident Hun Min Im, who faced 91 charges after attempting to claim NZ$2.3 million through COVID-19 relief programs. He received almost NZ$624,000 before authorities caught on. Im pleaded guilty to 54 charges during his May trial and was found guilty on 34 additional charges.

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Im submitted 42 fraudulent applications through eight companies and four sole traders, none operating in New Zealand or employing staff. He forged signatures, filed false tax returns, and stole personal information from tenants and job applicants to use as company directors and employees.

Investigation Pipeline Shows Corruption Focus

The fraud office opened seven new investigations during the year, all falling within its published focus areas. Four dealt with fraud perpetrated by trusted professionals. One involved foreign bribery allegations.

The office also commenced 22 preliminary inquiries, which allow limited investigation before committing full resources. About one-third of those inquiries related to corruption allegations, including the foreign bribery case.

The agency received 30 protected whistleblower disclosures during the year, up from 23 the previous year. These confidential reports help detect fraud that might otherwise go unnoticed.

The office concluded 12 active investigations during the year. Seven new ones opened, four advanced to prosecution, and five closed without charges. An investigation may not lead to prosecution for various reasons, including insufficient evidence of criminal conduct.

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Budget Cuts Hit Detection Capabilities

Government directives in early 2024 required the fraud office to reduce baseline spending by 3.5 percent, down from an initial 6.5 percent target. The agency launched an efficiency review in June 2024, ultimately cutting 12 positions while creating six new ones focused on intelligence and detection.

The office employed 72 people at the time of the assessment. Workforce changes concentrated on strengthening detection capabilities as fraud grows more complex. Frontline investigators were spared from cuts.

The review merged evaluation and prevention teams under a single manager and created an Intelligence/Detection Lead position to enhance fraud detection and strengthen connections with domestic and international agencies.