$1m pokie fraudster faces jail

A bankrupt former pokie boss who owes Internal Affairs nearly $1 million from misused community funds now faces jail after changing his plea to guilty three days into his theft trial.

After pleading not guilty, Shane Alvin Cosgrave, 66, admitted stealing $364,000 from the South Auckland Community Trust. In return, Internal Affairs dropped two of nine charges of theft by a person in a special relationship. It is unlikely the money will be recovered.

Internal Affairs gambling compliance director Debbie Despard said it was an important result because it sent a message to those in the business who might contemplate doing anything other than funding the community.

Last week Internal Affairs said it was disappointed at weak sentences for pokie fraudsters, but Despard would not say if the department would seek a substantial jail term in its submissions before Cosgrave's sentencing at the Manukau District Court on September 28. The charges carry a maximum sentence of seven years.

The trust was denied a new gaming licence in 2007, partly because Cosgrave was both a trustee and was being paid to run it through his company, ICS. It sold out to the Lion Foundation for $2.1m, and Lion agreed to pay Cosgrave $217,000 for a year, although an Internal Affairs audit report quoted Lion as saying he did nothing for them.

A forensic accountant found Cosgrave used $75,000 of trust money for running expenses at his own pub, the Clendon Inn, $64,000 on renovating the pub, and $24,000 to lease a car. Cosgrave also admitted giving himself personal loans from the trust.

Internal Affairs won a court order to make Cosgrave and ICS repay $975,000, but yesterday confirmed it had received nothing. Last August Cosgrave was adjudged bankrupt. Court documents list him as a labourer.

Sunday Star Times