Heart of the City founder Alex Swney sentenced to 5 years' jail

Alex Swney submitted fictitious invoices to Heart of the City which netted him over $2.5m.
ALEX BURTON/FAIRFAX NZ

Alex Swney submitted fictitious invoices to Heart of the City which netted him over $2.5m.

Disgraced former Heart of the City boss Alex Swney stole millions of dollars from the business group because he felt he was not paid enough.

"New Zealanders can be confident that people like Swney will be caught," said IRD tax counsel Graham Tubb outside the court.
ALEX BURTON/FAIRFAX NZ

"New Zealanders can be confident that people like Swney will be caught," said IRD tax counsel Graham Tubb outside the court.

The 57-year-old was sentenced to five years and seven months' jail on Wednesday, bringing a conclusion to what he has described as a "rollercoaster of despair".

The Inland Revenue Department said it would try to recover $4.6 million stolen by Swney, which included outstanding tax, interest and penalties.

Swney had previously admitted to both the tax evasion and defrauding the organisation he founded. In the dock at the Auckland District Court, he bowed his head as he awaited his sentence.

The court heard he had stolen the money for his own personal use, and had justified it because he believed he was not paid enough.

Judge Grant Fraser's starting point was a sentence of eight years in jail, as the premeditated offending was "grave and culpable".

"The aggravating factors relating to the offending are the abuse of trust and authority," the judge said.

However, the sentence was reduced because of Swney's guilty pleas, remorse, and limited good character.

The judge did not impose a minimum non-parole period, suggesting Swney could walk free in less than two years.

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A lawyer for the Serious Fraud Office (SFO) said Swney had voluntarily given an interview and been very co-operative.

He said the motivation for his offending was that he felt underpaid and should have been given more credit for creating and building up Heart of the City.

Swney's lawyer Murray Gibson said he had shown genuine remorse, and sold the family bach to help raise $331,000 of reparations.

"He will never appear again in this capacity," Gibson said. "We shouldn't lose sight of all that has been achieved under the defendant's watch at Heart of the City."

Swney was fired last year after the Inland Revenue Department filed charges over $1.8m of unpaid taxes, a scandal which triggered the SFO investigation.

He pleaded guilty to the SFO charges, admitting he had submitted fictitious invoices to Heart of the City which netted him over $2.5m.

UNDONE BY A ROUTINE CHECK

IRD group tax counsel Graham Tubb said outside the court that the sentence was the result of work by investigators from several agencies.  

"New Zealanders can be confident that people like Swney will be caught," Tubb said.
 
"Swney deliberately tried to cheat the system and not pay his fair share of tax – tax that funds vital services like schools, hospitals and welfare services.
 
"The small minority who try to evade paying tax take every step to hide their actions. Swney was no exception. But thanks to the hard work of Inland Revenue's investigators, he has been caught. He has not got away with it."

The flamboyant businessman and one-time mayoral candidate's undoing was the result of a routine check-up into a GST receipt.

He did not provide tax forms over extended periods during the 12 years to July 2012 and had not registered for GST despite providing taxable services.

The scandal has raised questions about Auckland Council's checks and balances, with close to $20m of ratepayer cash pumped into the lobby group over the last five years.

Swney has refused to publicly defend his actions.

In a recent letter to the Piako Post, Swney fondly recalled his childhood in Morrinsville, and praised the Waikato town's community spirit.

He said people all too often forgot the devastating effect on families and friends "through the rollercoaster of despair that goes with this sort of charge".

Swney said his family had been unwaveringly supportive, especially his parents Claire and Gordon.

"From a place north of the Bombays I send a sincere thanks to all of those who have reached out in support of my parents," he said.

Swney was also involved with the Auckland Children's Christmas Parade Trust and the Pathways Steering Group, which was set up for a project to add a cycle path and walkway to the Auckland Harbour Bridge.

He unsuccessfully ran for Auckland mayor in 2007 and was previously a one-time list candidate for the ACT Party.

 - Stuff

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