Ex-MP accused of pokie fraud

A former MP and a prominent Auckland businessman are facing criminal charges over a $1.8 million pokie scam that police say was a "fraudulent money-go-round".

Four people are charged with the swindle involving Auckland tennis clubs, a charity donating books to children and a variety of companies set up around gaming machines between 2003 and 2005.

The businessman is also accused of accepting trips to Australia in return for obtaining a grant for Mt Albert Rugby League Club.

Suppression orders prohibit the naming of the accused, who appeared in Auckland District Court yesterday. They are a long-serving former politician, an Auckland businessman and his wife, and a Christchurch businessman.

The Auckland businessman is accused of arranging for the tennis clubs and children's charity to take grants of money raised by the pokie machines. They are then said to have paid money back to him through a series of companies involving his wife and his fellow accused.

"In other words, the court is looking at a fraudulent money-go-round," Serious Fraud Office senior prosecutor John Upton said in his opening address at a depositions hearing.

The Auckland businessman is also accused of obtaining commissions from gaming machine makers and promising grants from his machines in return for "gifts" and "inducements". He faces eight charges of accepting gifts under the 1910 Secret Commissions Act.

In 2003 and 2004 he, his family and friends attended the National Rugby League grand final in Australia.

"The trips were paid for by the Mt Albert Rugby League Club from funds obtained from [the businessman's charitable trust]," Mr Upton, QC, said. "[He] agreed to accept the services as an inducement or reward for his part in ensuring that the grant applications were successful."

The patron of the club, known as the Mt Albert Lions, is former prime minister Helen Clark.

The SFO says the ex-MP and his wife - who has not been charged - ran companies through which $512,000 in grants was siphoned back from the children's charity, with some going to the MP and $67,000 to the Auckland businessman's creditors. When the former MP became aware of the SFO investigation, he allegedly tried to put them off the scent by faking a receipt book.

"Evidence called by the prosecution will show that Mr [suppressed] deliberately produced a receipt book to the SFO which had been backdated in an attempt to show that monies paid to Mr [suppressed] were a loan," Mr Upton said.

Investigations showed the receipt book had not been sold to the former MP until years after the alleged loans, shortly after he was contacted by the SFO, Mr Upton said.

The Auckland businessman faces 11 fraud charges for the whole $1.8m. His wife and the Christchurch man face two charges each of fraud involving the tennis clubs and $1.3m.

The former MP faces a fraud charge and a charge of obstructing the course of justice involving the children's charity and $512,000.

The court was told the Auckland businessman had already conceded there was a prima facie case to answer on eight charges and he would appear in the High Court for trial in early November. He will contest three further charges in Auckland District Court in December.

The three other accused are contesting the charges against them.

THE CHARGES

The SFO has charged the four with 17 offences:

The Auckland businessman: One charge of conspiring to use documents with intent to defraud, two of conspiring to use documents dishonestly with intent to obtain a pecuniary advantage, and eight of accepting gifts as an inducement or reward for acts done as an agent.

His wife, a businesswoman: One charge of conspiring to use documents with intent to defraud and one of conspiring to use documents dishonestly with intent to obtain a pecuniary advantage.

The former MP: One charge of conspiring to use documents dishonestly with intent to obtain a pecuniary advantage and one of attempting to obstruct the course of justice.

The Christchurch businessman: One charge of conspiring to use documents with intent to defraud and one of conspiring to use documents dishonestly with intent to obtain a pecuniary advantage.