Alex Swney's victims eye up assets, $5m property portfolio

Alex Swney bows his head as he is sentenced to five years and seven months in prison.
ALEX BURTON/FAIRFAX NZ

Alex Swney bows his head as he is sentenced to five years and seven months in prison.

Experts say the tenacious tax department will not let a web of trusts stop it from going after jailed tax-dodger Alex Swney's assets.

The former Heart of the City boss was sentenced to five years and seven months' in prison on Wednesday.

Both the Auckland business group he founded and the Inland Revenue Department are now attempting to claw back the money he stole.

Swney has offered $331,000 of reparations, raised in part by selling a family bach, which helped earn him a discount on his sentence.

Swney's recently converted Ponsonby pad has a rateable value of $1.65 million.
John Anthony

Swney's recently converted Ponsonby pad has a rateable value of $1.65 million.

However, that is a tiny fraction of the amount owed.

The Inland Revenue Department is working to recover $4.6 million in tax, interest and penalties, while Heart of the City said its civil lawsuit would recover as much as possible of the $2.5m Swney stole using fake invoices.

Inland Revenue group tax counsel Graham Tubb said the agency was still in the "very early days" of uncovering Swney's assets, but it would pursue him.

He said the offending was among the most significant the department ha seen, especially given it involved public money.

Inland Revenue group tax counsel Graham Tubb says people commit tax crimes "at their peril", and the taxman will find them.
ALEX BURTON/FAIRFAX NZ

Inland Revenue group tax counsel Graham Tubb says people commit tax crimes "at their peril", and the taxman will find them.

READ MORE:
*Heart of the City founder Alex Swney sentenced to 5 years' jail
*Auckland's Heart of the City funding queried post-Swney

Judge Grant Fraser said Swney had used the stolen cash to acquire "valuable interests in exclusive properties", held in a network of trusts.

"One might assume there is some ability to unravel those and make further payments," the judge said.

Property records show the 57 year old has interests in a portfolio worth at least $5m.

That includes a house in his home town of Morrinsville, which he co-owns with his parents and another relative and a stake in two Auckland properties; one in Mount Eden and the other in Kohimarama.

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Swney's recently refurbished Ponsonby property, which is home to his wife and two daughters, has a rateable value of $1.65m.

He transferred ownership of the house to a trust just weeks before Inland Revenue laid the charges that began his fall from grace.

However, Baucher Consulting tax expert Terry Baucher said the taxman was nothing if not tenacious.

Going on past form, complex trusts structures would not be enough to put it off and there were various mechanisms for recovering money, he said.

EY tax partner Aaron Quintal said there was often no money to recover from white-collar criminals, as it was consumed by extravagant lifestyles.

"If he's got assets in trusts, the [Inland Revenue] commissioner will certainly be keen to get hold of those," he said.

"The courts have been very accommodating in getting the commissioner access to funds in tax evasion matters."

The flamboyant businessman and one-time mayoral candidate has never spoken publicly about what motivated his offending.

However, he told the Serious Fraud Office that he felt underpaid, and deserved more credit for creating and building up Heart of the City.

The ratepayer-funded group has not disclosed Swney's salary, but his old job was advertised on Seek in the highest salary bracket of over $200,000.

New chief executive Viv Beck begins next month.

Swney's only comment has been in the form of a letter sent to his hometown paper, the Piako Post.

He fondly recalled his childhood and praised the Waikato town's community spirit, while describing the charges he faced as a "rollercoaster of despair".

 - Stuff

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