Big benefit fraudsters back on dole

WAYNE PATTERSON: At his peak was stealing $56,000 a week.

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Seven of New Zealand's top 10 benefit fraudsters are still receiving welfare payments – and are using the cash to pay back their fraud debts.

In the past five years, the country's worst fraudsters have racked up a total debt of more than $5.7 million, figures obtained by The Dominion Post under the Official Information Act show.

Two of the convicted criminals are in jail, one is working and seven are continuing to receive a benefit while their fraud debts – ranging in value from $571,000 down to $182,600 – are deducted in instalments from their payments.

The jailed fraudsters are the notorious Wayne Patterson, who racked up $3.4m before being caught in 2007, and "face of greed" Jeanette Ford, jailed last week for stealing $231,000 over 13 years.

The convicted individual who is no longer on a benefit is living and working in New Zealand, with debt payments being deducted from their salary.

The law does not prevent people with criminal convictions receiving a benefit, providing they have met the eligibility criteria.

Social Development Minister Paula Bennett admitted there was "no logic" to legislation that allowed someone to commit benefit fraud, be prosecuted for it and then continue to receive the benefit.

"I personally have issues with it, and think it needs to be addressed. This Government is looking very hard at the welfare system and, rather than making piecemeal adjustments, we're likely to be making very substantial changes."

But former Green Party MP Sue Bradford said there was always going to be an element that took advantage of the system, and most people on benefits were just "trying to survive".

"It's terrible to tar the rest of the benefit population with the same brush as benefit fraudsters when it's actually just a small percentage and, of that, some of them are just out-and-out criminals."

It was natural that benefit fraudsters would end up paying their debts out of the benefit, she said.

"People who commit fraud, whether in the benefit system or anywhere else, are probably going to end up on the benefit because no-one is going to want to employ them."

The documents show the total amount of money stolen from taxpayers in benefit fraud is now $74.1m, with only $1.5m recovered in the 2009 financial year.

Although prosecutions have fallen since 2006, the amount stolen each year had almost doubled by 2009, to $15.9m.

Ms Bennett did not respond to questions about whether such a level of fraud was acceptable.

The ministry said in a statement that fraud debt represented one-tenth of 1 per cent of the total benefit spend each year.

Very few people convicted of benefit fraud had assets or cash and, when they did, these were seized, it said. Otherwise a repayment regime was considered for each person. If this was too severe, innocent families would suffer.

In 2009, the ministry bumped up the number of fulltime benefit fraud investigators from 79 to 95.

ACT MP Heather Roy said it was obvious further changes needed to be made. "The question is, how much was the system allowing this to happen? It seems to me if we've got that much money going west ... there's something going wrong."

THE WORST OF THE BLUDGERS

Top of the blacklist is Wayne Patterson, who was jailed in 2007 for multiple frauds that – at their peak – netted him a total of $56,000 a week.

He created 123 false identities to secure welfare payments, stealing a total of $3.4 million. His assets were seized and the ministry made a $400,000 gain from the sale of his overseas investments.

The most recent high-profile case is that of Auckland woman Jeanette Ford, labelled the "face of greed" by Social Development Ministry fraud head Graeme Carruthers.

She was jailed for three years last Friday for using stolen identities, forged driving licences and birth certificates to steal $231,000 over 13 years.

- © Fairfax NZ News