September 22, 2024 • 17 mins
For the last few years, our headlines have been dominated by talk of ram raids, robberies, and gang members misbehaving.
Those stories have fed through to politics, with governments making a big deal about tackling gangs and cracking down on crime.
But while these crimes may make for a great photo and deliver political soundbites, little is ever said about the extent of white collar crimes like fraud.
NZ Herald investigative journalist Matt Nippert has been reporting on fraud and corruption for much of his career. He joins The Front Page to discuss the extent of it in New Zealand, and if our politicians should pay more attention to it.
Follow The Front Page on iHeartRadio, Apple Podcasts, Spotify or wherever you get your podcasts.
You can read more about this and other stories in the New Zealand Herald, online at nzherald.co.nz, or tune in to news bulletins across the NZME network.
Host: Chelsea Daniels
Sound Engineer: Paddy Fox
Producer: Ethan Sills
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:05):
Kilda.
Speaker 2 (00:05):
I'm Chelsea Daniels and This is the Front Page, a
daily podcast presented by the New Zealand Herald. For the
last few years, our headlines have been dominated by talk
of ram raids, robberies and gang members misbehaving. Those stories
(00:26):
have fared through to politics, with the governments making a
big deal about tackling gangs and cracking down on crime.
But while these crimes might make for a great photo
and deliver political sound bites, little is ever said about
the extent of white collar crimes like fraud and zed.
(00:46):
Herald investigative journalist Matt Knippett has been reporting on fraud
and corruption for much of his career. He joins us
now on the Front Page to discuss the extent of
it in New Zealand and peticians should pay more attention
to it. Matt, what are some of the biggest fraud
(01:09):
cases you've investigated over your career?
Speaker 1 (01:12):
Well, I guess there's a couple of one hundred million
dollar plus ones. The Beggest was actually the first that
occurred in my Actually the first week I was a
business journalist covering the collapse of South Canterbury Finance, where
it turned out there were some sheneigans on their ballit
sheet hiding related party loans that you know, if the
government had known about it, they might not have guaranteed them.
And that company went under and triggered a one point
(01:33):
five billion dollar payer. Another particularly large one they covered
was there was a Clashtreage based an investment banker called
Kelly Tonkin. He ran an investment firm called Penrich. He
was said to be doing amazing things with currenty in
the Cayman Islands, but it turned out to be a
Ponzi scheme that left a whole bunch of retchless to
(01:53):
investors more than one hundred million down. Then there's another
handful that are a sort of fifty million dollar range.
I've had my finger on most of the big ones
over the last decade.
Speaker 2 (02:03):
I reckon when it comes to financial cost and victims.
Does fraud compare with more violent direct crime like burglary
or assault?
Speaker 1 (02:13):
Well, I mean, how do you work out what an
assault victim has lost? I mean, often it's not money,
and most file assaults are sort of occur late at
night when the parties are drunk, and usually it's not
over cash. A good point of comparison is one people
most think of financial crime, they think of bank robberies. Right,
the largest bank robbery in New Zealant history didn't even
get a million dollars, and it was twenty five years ago.
(02:35):
If you want to look at sort of the crimes
that sort of cost and dollar teams more, you're much
better looking at your investment hucksters and scammers. Who are
you know, even some of the smaller operators are pulling
in world more than a million. As I mentioned, you
know some even manusct up to nine figures.
Speaker 2 (02:51):
When it comes to investigating fraud, I guess it's real
intricate because generally people who are committing financial fraud they
don't make it too easy for authorities to find out
what they're doing. So I bet you've printed out reams
of paper in your career.
Speaker 1 (03:08):
Paperwork is often are the modus operandi. The thing about
financial crime is often at crime of consent, guns aren't
being drawn and people handing over their wallets or emptying
their purses. These crimes are committed by people who convince
them to hand it over, usually for an invalid or
untruthful reason. You know, they say they'll invested somewhere would
in fact it's just going to pay off the other
(03:31):
investors that want to get out it's upon this scheme,
or it's just being tally most appropriated. So that level
of trust, I mean, this is why they call convent
because they're confidence men. I haven't yet met at Fordster
who wasn't charismatic. I mean, you've got to be good
to convince people hand over the hard and pass. Then
of course that does complicate things because often people don't
(03:53):
want to acknowledge they've been tricked and lost money. Certainly
they don't want anyone else to know that they've been
foolish or taken in. There's a certain amount of shame.
Speaker 3 (04:03):
Nationally, there'll be hundreds of cases a day being reported
to police, and we know that not all thought has reported,
so the scale of it is truly massive.
Speaker 1 (04:12):
I never thought it never happened to me. I was
pretty upset. I didn't know which way to turn. That
money saved up with my grand order and the son
and his wife.
Speaker 3 (04:21):
So how much money did you lose in this?
Speaker 1 (04:25):
For and dearly there are commercial consequences, you know, if
your bank realizes that, you know you've lost a million
dollars of your businesses money they might want to take
a closer look at your finances to make sure you
can replace. There's lots of seven centers not to report
the sort of crime, which is the first big hurdle.
(04:45):
The second book hurdle we often come across is money
that goes offshore, and you know, we live in a
globalized world. People can set up bank accounts overseas. There
are supposed to be sort of anti money laundering checks
in place to ensure that valanci institutions know who are
setting up accounts for their institutions and where it's being
transferred to. But once money goes offshore, and it's extraordinarily
(05:09):
difficult to track, let alone recover. Once people realize that's
happened to them, often they can't see any prospect of
getting their money back. So why would you go through
all the pain that torment of a criminal investigation which
in all likelihood probably won't even get to trial, and
even if it does, it's going to drag out for years.
A lot of people just want to cut their losses,
(05:29):
and the losses are indeed quite substantial and sort of
international level.
Speaker 2 (05:33):
When we talk about fraud in New Zealand, how many
millions of dollars are kiwis losing each year.
Speaker 1 (05:38):
It's sort of a very fungible term fraud. I mean,
if we sort of look at the sort of the
economic costs of crime might be a good way to
look at it. There were some studies that maybe it
was about ten billion a year. However, it's worth noting
that the vast majority of that, probably seven or eight billion,
is just text to avoidance people not paying the tax
they're required to, either just not paying it and you know,
(06:02):
when the bills come due, or sort of massaging their
accounts to make a look as though they don't need
to pay as much. IOD does have a fairly big
investigations unit, and they humanly do about They poss get
about a billion dollars of that a year, so there
have been some researchers that's the amount that's missed us
considerably more, and we break it further down. I know
it's a lot in the news at the moment sort
(06:22):
of ram raids and retail crime that industry lobby reckons
that's about two and a half billion a year. So yes,
a very big number, but still you're looking at only
a third the amount of text that's going with thing
and then going way further down, you know, they're sort
of the scams and frauds are probably in the three
to four hundred million dollar range, but that number can
bounce around a lot. As I mentioned before, individual cases
(06:44):
can run to one hundred million, which can really skew
each year's figures. And finally, something that does get a
fair bit of coverage, but it's worth mentioning purely because
it's so meniscule, is a welfare fraud which you know,
only about two or three million dollars a year that
has prosecuted each year. It's a comparative pittance and you know,
(07:04):
in some total, just a fraction of one of the
sort of pondee type schemes that might get uncovered in
a year.
Speaker 2 (07:11):
When we talk about fraud these days, online scams are
probably where most people's minds go, right. The latest New
Zealand Crime and Victim survey said that one in ten
kiw's experienced some level of fraud in the last year,
double the last period. How sophisticated have these scams become?
Speaker 1 (07:31):
Yeah, this is what I've noticed this myself over the
last couple of years. You just draw a line between
the sort of work I normally do at the higher
end of the pondee is very sort of a narrow
and sort of deep fraud where a small group of
victims will get worked over over a number of years
by an individual, and often the sums involved could be
really large. What was common five years ago, and I'll
(07:53):
talk about how has evolved, is that there's also another
type of operator, usually operating internationally. They're just as a
very shallow and broad approach. You know, they will spam
every phone number they can find, every email address they
can find, and we're trying to get you to pay
your toll road bill or your parking ticket they claim
is overdrawn, but in fact the money is going to
(08:14):
their accounts. I have noticed that that approach has adapted.
One of the most insidious ones I've seen is scammers
setting up websites and buying Google ads. So if you
people are gurgling where's the best place to invest my money,
they'll have their site comes up, which again doesn't like
a scam, and it's just a comparison side of interest rates,
(08:34):
and it allows you to register your email address and
phone number. If you're interested in talking about your options
with a financial advisor, and of course you'll soon receive
a call, but it won't be a financial advisor. It
will be a scammer. I think I've sprung one of
these guys along for a couple of months a couple
of years ago. Extremely well spoken. They're running a professional
call center and they're recording details and passing them on
to where it's manning the phones. They've got adopted prospective sys,
(08:58):
lined up, a whole bunch of official locking forms. You
fullen and because you haven't been spammed, in fact, you've
solicited this yourself. People's guards come down and I have
seen record, and I think the bank's noticing too. People
have been done out of hundreds of thousands of dollars
from that sort of approach, and it's quite remarkable. I
thought there'd be more red flags, but that's sort of
(09:19):
set up to be honest, and it's very difficult to
prosecute because although when you're called, your mobile number will
say it's a local number, perhaps they live in spoofed
the bank they're claiming to be from, that's all actually
based offshore. And so the prospect for the New Zealand
Police or ever the serious thought offers to find out
who's behind it, let alone and dragged them to New
Zealand jail. As close to zero.
Speaker 2 (09:51):
Is New Zealand trailing behind in terms of technology and
education that could stop us falling victim to these kind
of crimes, Do you reckon?
Speaker 1 (09:58):
I think there's a certain nature to New zeald society.
We're small. I think we're relatively community focused, and we
believe each other way too much. We will take sort
of word of mouth recommendations quite strongly. This leads us
to be particularly vulnerable to type of fraud called affinity fraud,
which is often where forster as will target their friends
(10:19):
and family, or they will recruit people who are then
drawing their friends and family, and often people's guard goes
down a bit. Then if your brothers said it's good,
and he's a lawyer, then I don't need to do
my own checking. That does leave you quite vulnerable. I'd
certainly know with the rise and the online investment scams
that these ones I was talking about where people think
they're investing money in the bank turned deposit, but actually
(10:39):
there sending it to dubious agents offshore. There are certain
steps the banks can take to ensure that when money
is paid by their clients to a foreign bank account
that indeed the payer and pay names match. They don't
do that presently, but it has been rolled out in
other jurisdictions, and I'm hopeful that New Zealand's banks will
eventually be able to update their own systems to divide
her similar extra level of protection.
Speaker 3 (11:06):
Victim advocates say banks should be doing more to protect
their customers.
Speaker 2 (11:10):
Don't rely on the one fact that just because the
customer says it makes it right.
Speaker 3 (11:16):
She wants banks to slow the payments down consumer in ZSS.
Banks around the world are already doing this.
Speaker 1 (11:23):
Yes, New Zealand's banking system is behind.
Speaker 2 (11:27):
Given the pace the New Zealand banking system moves that
it could be some years before we see this introduced.
Speaker 4 (11:33):
Well, first of all, I've urged them to put in
place confirmation of pay ye arrangements and the banks have
committed to them.
Speaker 1 (11:44):
But on the whole it's been interesting in covering the sector.
It was about ten years ago a whole suite of
anti money laundering regulations came in which and I'm sure
people might have run into this when they over the
bank account. Something you need to prove that you are
and to bring along passports, best certificates, utility bills and
some as pain in the ass to be honest. But
all that was supposed to make it harder for scammers.
(12:05):
And the harder you make it for scammers, the harder
you make it for everyday business. So people should perhaps
be a little bit careful of what they wish for,
because you know that we're complaints if it's too easy,
and also complaints if it's too hard.
Speaker 2 (12:16):
You mentioned overseas actors, but what about fraud here in
New Zealand. How widespread are negative actors in this country?
Speaker 1 (12:24):
Oh? Pretty common. You know, as long as there's an economy,
there'll be fraud. It is interesting that se like waves
of fraud emerging usually just following a recession. That's when
people have asked for their money back. But things get
a bit tight elsewhere. You know, it's we're further than
the business traders. Where the tide goes out, you can
see who's not swimming with togs, and so I suspect
(12:48):
we will see a lot more of that get exposed
in the coming years. Look, kiwis have been scamming kiwis
for a long time. I mentioned the overseas stuff, because
if you're smart and want to get away with us
as a fraudster, you don't really want to be in
the same country as your victims because eventually they will complain.
And you know, while the jail sentences here aren't as
long as you get the United States, I think being
(13:10):
made off read upon Zeschiv in New York and got
put away for one hundred and fifty years some of
the bigger fraudsters here have you ended up with ten
or living your jail terms.
Speaker 2 (13:19):
You mentioned benefit fraud as well, and it's something that
always gets people up in arms. We all remember what
happened to former Green Party co leader Mateia two day.
Is that the most common form of fraud against the
government or public services or is that a drop of.
Speaker 1 (13:36):
It's just your old fashioned tax evasion. It's contractors taking
cash jobs and not reporting their income. It's people shunting
personal expenses into business and claiming deductions. It's not declaring
second or third incomes. The numbers there are is probably
you know, seven or eight billion dollars of taxtavation each year,
(13:59):
and is what two or three million dollars have benefit
Ford each year? So that's one two thousandth Matt.
Speaker 2 (14:06):
Given how much you've reported on fraud in the past,
does it bother you that governments have not put as
much focus on this when they talk about tackling crime.
Speaker 1 (14:16):
Yeah, it's a perennial problem. It is harder the prospect
to be fair. Unless I found one fraud. There wasn't
running a sort of an elaborate loan scam. He was
funding the money for breast and plants for his mistresses,
and it was bringing along like vintage bottles of French
champagne to work functions. There are some good stuff in there,
(14:37):
but it's usually it doesn't get people as outraged if
you lose a lot of money to a fraud, So
often you're seen as well, you had that much money
to begin with, why are we so worried. We did
see a bit of a sea change in this after
the global financial crisis, but a lot of the finance
companies were found to have some fraudulent activities and it
became clear then that you know, it wasn't just one
hundred million dollars lost. That was our ten thousand pensions
(15:00):
who lost their life savings, which is you know, when
you think of it, that way, that's a that's a
horrific crime. It's harder to prosecute because you've got to
build up and reassemble all the financial crimes. It's not
that we can easily catch, you know, on CCTV, So
it takes a lot more resources for police. And there's
also this real gap in the system. With a serious
Fraud Office which is tidy, you know, a couple of
(15:20):
dozen staff. They only look at sort of cases five
million dollars and up. The police often struggle to deal
with cases that one hundred thousand dollars and greater. So
there's this real sweet spot for mid level fraud where
it's too complicated police, it's too small for the CFO,
and it can take quite a bit of lobby to
get the action on that.
Speaker 2 (15:40):
What do we do there, how do we get those
kind of mid level fraud cases more in the spotlight.
Speaker 1 (15:46):
Well, it's probably a matter of either expanding the remitt
Serious Fraud Office or expanding the capabilities of the zelland police.
I mean it's as simple as that. I think. I mean, obviously,
at at the level of bank operations, requiring them to
keep more information transaction details might be useful. I think
at the moment they need to keep seven years worth,
which sounds like an all very long time, but at
(16:07):
the point where people can play and often these things
have been running for a considerable period of time, and
a lot of their big frauds sort of tap out
when they're trying to quantify them, because simply they don't
have any idea about what happened, you know, beyond that
seven year period. I do think it's a political will.
Oddly enough, well, I'm generally not a fan of harsher sentences.
(16:29):
A white collar crime does seem to be one of
the crime types that are affected. The people committing these
crimes are for just tend to be quite deliberate in
what they're doing. They're sober when they're doing it, they're
doing it over a long period, and they're doing it
for a very clear financial reward. So letting them become
aware that, you know, if they carry on down this path,
not only will you lose all the money you've stolen,
(16:51):
but you know you're facing the prospect of a decade
in jail may sort of trigger that rational part of
their brain more than it would in the case of
the set of a strict driver.
Speaker 2 (17:02):
Thanks for joining us, Matt. That's it for this episode
of the Front Page. You can read more about today's
stories and extensive news coverage at enzedherld dot co dot nz.
The Front Page is produced by Ethan Siles with sound
engineer Patty Fox. I'm Chelsea Daniels. Subscribe to the Front
(17:25):
Page on iHeartRadio or wherever you get your podcasts, and
tune in tomorrow for another look behind the headlines.
Kilda.
Speaker 2 (00:05):
I'm Chelsea Daniels and This is the Front Page, a
daily podcast presented by the New Zealand Herald. For the
last few years, our headlines have been dominated by talk
of ram raids, robberies and gang members misbehaving. Those stories
(00:26):
have fared through to politics, with the governments making a
big deal about tackling gangs and cracking down on crime.
But while these crimes might make for a great photo
and deliver political sound bites, little is ever said about
the extent of white collar crimes like fraud and zed.
(00:46):
Herald investigative journalist Matt Knippett has been reporting on fraud
and corruption for much of his career. He joins us
now on the Front Page to discuss the extent of
it in New Zealand and peticians should pay more attention
to it. Matt, what are some of the biggest fraud
(01:09):
cases you've investigated over your career?
Speaker 1 (01:12):
Well, I guess there's a couple of one hundred million
dollar plus ones. The Beggest was actually the first that
occurred in my Actually the first week I was a
business journalist covering the collapse of South Canterbury Finance, where
it turned out there were some sheneigans on their ballit
sheet hiding related party loans that you know, if the
government had known about it, they might not have guaranteed them.
And that company went under and triggered a one point
(01:33):
five billion dollar payer. Another particularly large one they covered
was there was a Clashtreage based an investment banker called
Kelly Tonkin. He ran an investment firm called Penrich. He
was said to be doing amazing things with currenty in
the Cayman Islands, but it turned out to be a
Ponzi scheme that left a whole bunch of retchless to
(01:53):
investors more than one hundred million down. Then there's another
handful that are a sort of fifty million dollar range.
I've had my finger on most of the big ones
over the last decade.
Speaker 2 (02:03):
I reckon when it comes to financial cost and victims.
Does fraud compare with more violent direct crime like burglary
or assault?
Speaker 1 (02:13):
Well, I mean, how do you work out what an
assault victim has lost? I mean, often it's not money,
and most file assaults are sort of occur late at
night when the parties are drunk, and usually it's not
over cash. A good point of comparison is one people
most think of financial crime, they think of bank robberies. Right,
the largest bank robbery in New Zealant history didn't even
get a million dollars, and it was twenty five years ago.
(02:35):
If you want to look at sort of the crimes
that sort of cost and dollar teams more, you're much
better looking at your investment hucksters and scammers. Who are
you know, even some of the smaller operators are pulling
in world more than a million. As I mentioned, you
know some even manusct up to nine figures.
Speaker 2 (02:51):
When it comes to investigating fraud, I guess it's real
intricate because generally people who are committing financial fraud they
don't make it too easy for authorities to find out
what they're doing. So I bet you've printed out reams
of paper in your career.
Speaker 1 (03:08):
Paperwork is often are the modus operandi. The thing about
financial crime is often at crime of consent, guns aren't
being drawn and people handing over their wallets or emptying
their purses. These crimes are committed by people who convince
them to hand it over, usually for an invalid or
untruthful reason. You know, they say they'll invested somewhere would
in fact it's just going to pay off the other
(03:31):
investors that want to get out it's upon this scheme,
or it's just being tally most appropriated. So that level
of trust, I mean, this is why they call convent
because they're confidence men. I haven't yet met at Fordster
who wasn't charismatic. I mean, you've got to be good
to convince people hand over the hard and pass. Then
of course that does complicate things because often people don't
(03:53):
want to acknowledge they've been tricked and lost money. Certainly
they don't want anyone else to know that they've been
foolish or taken in. There's a certain amount of shame.
Speaker 3 (04:03):
Nationally, there'll be hundreds of cases a day being reported
to police, and we know that not all thought has reported,
so the scale of it is truly massive.
Speaker 1 (04:12):
I never thought it never happened to me. I was
pretty upset. I didn't know which way to turn. That
money saved up with my grand order and the son
and his wife.
Speaker 3 (04:21):
So how much money did you lose in this?
Speaker 1 (04:25):
For and dearly there are commercial consequences, you know, if
your bank realizes that, you know you've lost a million
dollars of your businesses money they might want to take
a closer look at your finances to make sure you
can replace. There's lots of seven centers not to report
the sort of crime, which is the first big hurdle.
(04:45):
The second book hurdle we often come across is money
that goes offshore, and you know, we live in a
globalized world. People can set up bank accounts overseas. There
are supposed to be sort of anti money laundering checks
in place to ensure that valanci institutions know who are
setting up accounts for their institutions and where it's being
transferred to. But once money goes offshore, and it's extraordinarily
(05:09):
difficult to track, let alone recover. Once people realize that's
happened to them, often they can't see any prospect of
getting their money back. So why would you go through
all the pain that torment of a criminal investigation which
in all likelihood probably won't even get to trial, and
even if it does, it's going to drag out for years.
A lot of people just want to cut their losses,
(05:29):
and the losses are indeed quite substantial and sort of
international level.
Speaker 2 (05:33):
When we talk about fraud in New Zealand, how many
millions of dollars are kiwis losing each year.
Speaker 1 (05:38):
It's sort of a very fungible term fraud. I mean,
if we sort of look at the sort of the
economic costs of crime might be a good way to
look at it. There were some studies that maybe it
was about ten billion a year. However, it's worth noting
that the vast majority of that, probably seven or eight billion,
is just text to avoidance people not paying the tax
they're required to, either just not paying it and you know,
(06:02):
when the bills come due, or sort of massaging their
accounts to make a look as though they don't need
to pay as much. IOD does have a fairly big
investigations unit, and they humanly do about They poss get
about a billion dollars of that a year, so there
have been some researchers that's the amount that's missed us
considerably more, and we break it further down. I know
it's a lot in the news at the moment sort
(06:22):
of ram raids and retail crime that industry lobby reckons
that's about two and a half billion a year. So yes,
a very big number, but still you're looking at only
a third the amount of text that's going with thing
and then going way further down, you know, they're sort
of the scams and frauds are probably in the three
to four hundred million dollar range, but that number can
bounce around a lot. As I mentioned before, individual cases
(06:44):
can run to one hundred million, which can really skew
each year's figures. And finally, something that does get a
fair bit of coverage, but it's worth mentioning purely because
it's so meniscule, is a welfare fraud which you know,
only about two or three million dollars a year that
has prosecuted each year. It's a comparative pittance and you know,
(07:04):
in some total, just a fraction of one of the
sort of pondee type schemes that might get uncovered in
a year.
Speaker 2 (07:11):
When we talk about fraud these days, online scams are
probably where most people's minds go, right. The latest New
Zealand Crime and Victim survey said that one in ten
kiw's experienced some level of fraud in the last year,
double the last period. How sophisticated have these scams become?
Speaker 1 (07:31):
Yeah, this is what I've noticed this myself over the
last couple of years. You just draw a line between
the sort of work I normally do at the higher
end of the pondee is very sort of a narrow
and sort of deep fraud where a small group of
victims will get worked over over a number of years
by an individual, and often the sums involved could be
really large. What was common five years ago, and I'll
(07:53):
talk about how has evolved, is that there's also another
type of operator, usually operating internationally. They're just as a
very shallow and broad approach. You know, they will spam
every phone number they can find, every email address they
can find, and we're trying to get you to pay
your toll road bill or your parking ticket they claim
is overdrawn, but in fact the money is going to
(08:14):
their accounts. I have noticed that that approach has adapted.
One of the most insidious ones I've seen is scammers
setting up websites and buying Google ads. So if you
people are gurgling where's the best place to invest my money,
they'll have their site comes up, which again doesn't like
a scam, and it's just a comparison side of interest rates,
(08:34):
and it allows you to register your email address and
phone number. If you're interested in talking about your options
with a financial advisor, and of course you'll soon receive
a call, but it won't be a financial advisor. It
will be a scammer. I think I've sprung one of
these guys along for a couple of months a couple
of years ago. Extremely well spoken. They're running a professional
call center and they're recording details and passing them on
to where it's manning the phones. They've got adopted prospective sys,
(08:58):
lined up, a whole bunch of official locking forms. You
fullen and because you haven't been spammed, in fact, you've
solicited this yourself. People's guards come down and I have
seen record, and I think the bank's noticing too. People
have been done out of hundreds of thousands of dollars
from that sort of approach, and it's quite remarkable. I
thought there'd be more red flags, but that's sort of
(09:19):
set up to be honest, and it's very difficult to
prosecute because although when you're called, your mobile number will
say it's a local number, perhaps they live in spoofed
the bank they're claiming to be from, that's all actually
based offshore. And so the prospect for the New Zealand
Police or ever the serious thought offers to find out
who's behind it, let alone and dragged them to New
Zealand jail. As close to zero.
Speaker 2 (09:51):
Is New Zealand trailing behind in terms of technology and
education that could stop us falling victim to these kind
of crimes, Do you reckon?
Speaker 1 (09:58):
I think there's a certain nature to New zeald society.
We're small. I think we're relatively community focused, and we
believe each other way too much. We will take sort
of word of mouth recommendations quite strongly. This leads us
to be particularly vulnerable to type of fraud called affinity fraud,
which is often where forster as will target their friends
(10:19):
and family, or they will recruit people who are then
drawing their friends and family, and often people's guard goes
down a bit. Then if your brothers said it's good,
and he's a lawyer, then I don't need to do
my own checking. That does leave you quite vulnerable. I'd
certainly know with the rise and the online investment scams
that these ones I was talking about where people think
they're investing money in the bank turned deposit, but actually
(10:39):
there sending it to dubious agents offshore. There are certain
steps the banks can take to ensure that when money
is paid by their clients to a foreign bank account
that indeed the payer and pay names match. They don't
do that presently, but it has been rolled out in
other jurisdictions, and I'm hopeful that New Zealand's banks will
eventually be able to update their own systems to divide
her similar extra level of protection.
Speaker 3 (11:06):
Victim advocates say banks should be doing more to protect
their customers.
Speaker 2 (11:10):
Don't rely on the one fact that just because the
customer says it makes it right.
Speaker 3 (11:16):
She wants banks to slow the payments down consumer in ZSS.
Banks around the world are already doing this.
Speaker 1 (11:23):
Yes, New Zealand's banking system is behind.
Speaker 2 (11:27):
Given the pace the New Zealand banking system moves that
it could be some years before we see this introduced.
Speaker 4 (11:33):
Well, first of all, I've urged them to put in
place confirmation of pay ye arrangements and the banks have
committed to them.
Speaker 1 (11:44):
But on the whole it's been interesting in covering the sector.
It was about ten years ago a whole suite of
anti money laundering regulations came in which and I'm sure
people might have run into this when they over the
bank account. Something you need to prove that you are
and to bring along passports, best certificates, utility bills and
some as pain in the ass to be honest. But
all that was supposed to make it harder for scammers.
(12:05):
And the harder you make it for scammers, the harder
you make it for everyday business. So people should perhaps
be a little bit careful of what they wish for,
because you know that we're complaints if it's too easy,
and also complaints if it's too hard.
Speaker 2 (12:16):
You mentioned overseas actors, but what about fraud here in
New Zealand. How widespread are negative actors in this country?
Speaker 1 (12:24):
Oh? Pretty common. You know, as long as there's an economy,
there'll be fraud. It is interesting that se like waves
of fraud emerging usually just following a recession. That's when
people have asked for their money back. But things get
a bit tight elsewhere. You know, it's we're further than
the business traders. Where the tide goes out, you can
see who's not swimming with togs, and so I suspect
(12:48):
we will see a lot more of that get exposed
in the coming years. Look, kiwis have been scamming kiwis
for a long time. I mentioned the overseas stuff, because
if you're smart and want to get away with us
as a fraudster, you don't really want to be in
the same country as your victims because eventually they will complain.
And you know, while the jail sentences here aren't as
long as you get the United States, I think being
(13:10):
made off read upon Zeschiv in New York and got
put away for one hundred and fifty years some of
the bigger fraudsters here have you ended up with ten
or living your jail terms.
Speaker 2 (13:19):
You mentioned benefit fraud as well, and it's something that
always gets people up in arms. We all remember what
happened to former Green Party co leader Mateia two day.
Is that the most common form of fraud against the
government or public services or is that a drop of.
Speaker 1 (13:36):
It's just your old fashioned tax evasion. It's contractors taking
cash jobs and not reporting their income. It's people shunting
personal expenses into business and claiming deductions. It's not declaring
second or third incomes. The numbers there are is probably
you know, seven or eight billion dollars of taxtavation each year,
(13:59):
and is what two or three million dollars have benefit
Ford each year? So that's one two thousandth Matt.
Speaker 2 (14:06):
Given how much you've reported on fraud in the past,
does it bother you that governments have not put as
much focus on this when they talk about tackling crime.
Speaker 1 (14:16):
Yeah, it's a perennial problem. It is harder the prospect
to be fair. Unless I found one fraud. There wasn't
running a sort of an elaborate loan scam. He was
funding the money for breast and plants for his mistresses,
and it was bringing along like vintage bottles of French
champagne to work functions. There are some good stuff in there,
(14:37):
but it's usually it doesn't get people as outraged if
you lose a lot of money to a fraud, So
often you're seen as well, you had that much money
to begin with, why are we so worried. We did
see a bit of a sea change in this after
the global financial crisis, but a lot of the finance
companies were found to have some fraudulent activities and it
became clear then that you know, it wasn't just one
hundred million dollars lost. That was our ten thousand pensions
(15:00):
who lost their life savings, which is you know, when
you think of it, that way, that's a that's a
horrific crime. It's harder to prosecute because you've got to
build up and reassemble all the financial crimes. It's not
that we can easily catch, you know, on CCTV, So
it takes a lot more resources for police. And there's
also this real gap in the system. With a serious
Fraud Office which is tidy, you know, a couple of
(15:20):
dozen staff. They only look at sort of cases five
million dollars and up. The police often struggle to deal
with cases that one hundred thousand dollars and greater. So
there's this real sweet spot for mid level fraud where
it's too complicated police, it's too small for the CFO,
and it can take quite a bit of lobby to
get the action on that.
Speaker 2 (15:40):
What do we do there, how do we get those
kind of mid level fraud cases more in the spotlight.
Speaker 1 (15:46):
Well, it's probably a matter of either expanding the remitt
Serious Fraud Office or expanding the capabilities of the zelland police.
I mean it's as simple as that. I think. I mean, obviously,
at at the level of bank operations, requiring them to
keep more information transaction details might be useful. I think
at the moment they need to keep seven years worth,
which sounds like an all very long time, but at
(16:07):
the point where people can play and often these things
have been running for a considerable period of time, and
a lot of their big frauds sort of tap out
when they're trying to quantify them, because simply they don't
have any idea about what happened, you know, beyond that
seven year period. I do think it's a political will.
Oddly enough, well, I'm generally not a fan of harsher sentences.
(16:29):
A white collar crime does seem to be one of
the crime types that are affected. The people committing these
crimes are for just tend to be quite deliberate in
what they're doing. They're sober when they're doing it, they're
doing it over a long period, and they're doing it
for a very clear financial reward. So letting them become
aware that, you know, if they carry on down this path,
not only will you lose all the money you've stolen,
(16:51):
but you know you're facing the prospect of a decade
in jail may sort of trigger that rational part of
their brain more than it would in the case of
the set of a strict driver.
Speaker 2 (17:02):
Thanks for joining us, Matt. That's it for this episode
of the Front Page. You can read more about today's
stories and extensive news coverage at enzedherld dot co dot nz.
The Front Page is produced by Ethan Siles with sound
engineer Patty Fox. I'm Chelsea Daniels. Subscribe to the Front
(17:25):
Page on iHeartRadio or wherever you get your podcasts, and
tune in tomorrow for another look behind the headlines.
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