Guilty verdicts against Blenheim racing man Mike O'Brien for pokie machine fraud

Michael Joseph O'Brien had denied being significantly involved in the management of a gambling industry trust.
ROBERT KITCHIN/FAIRFAX NZ

Michael Joseph O'Brien had denied being significantly involved in the management of a gambling industry trust.

Prominent Marlborough racing personalty Michael (Mike) Joseph O'Brien​​​ has been found guilty of gambling machine frauds.

A judge at the High Court in Wellington on Thursday issued a decision running to more than 100 pages, detailing O'Brien's hidden involvement in the operation of gambling machines, and venues hosting the machines.

The decision also detailed the way he used his influence over grants from gambling profits to produce an income for himself and related entities of more than $1 million a year.

Paul Max has had his sentencing delayed until late July.
ROBERT KITCHIN/STUFF

Paul Max has had his sentencing delayed until late July.

O'Brien, 58, of Blenheim, was remanded in custody until sentencing next month.

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Name suppression has now ended for Kevin Martin Coffey, 60, formerly of Masterton, a former Internal Affairs gambling inspector who was found guilty of one charge of making false representations to deceive Internal Affairs.

Patrick O'Brien appeared from Blenheim via video link, until the charges against him were stopped early in the trial. ...
ROBERT KITCHIN/FAIRFAX NZ

Patrick O'Brien appeared from Blenheim via video link, until the charges against him were stopped early in the trial. (File photo)

Coffey was found not guilty of obtaining control of gaming proceeds for the Bluegrass Trust with intent to deceive Internal Affairs.

Paul Anthony Max, 60, a bar owner and operator of Nelson, was found guilty of three charges of fraudulently obtaining gambling licences for three venues, in Stokes Valley, Nelson, and Palmerston North, by concealing that Mike O'Brien was the "true owner" of the venues.

Coffey and Max were also remanded in custody until sentencing.

Justice Robert Dobson delivered his verdicts after a judge-alone trial he heard over about two months. (File photo)
KEVIN STENT/FAIRFAX NZ

Justice Robert Dobson delivered his verdicts after a judge-alone trial he heard over about two months. (File photo)

At the heart of the charges was the allegation that O'Brien wanted to raise funds for the racing industry, and in the process raised money for himself.

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But his involvement with pokie machine gambling, and the distribution of the profits, was concealed from the regulating body, the Department of Internal Affairs, because it considered him unsuitable to be involved.

Both the bars and clubs where gambling machines operate, and the organisations that own the machines and distribute the profits, have to be licensed. People cannot be "key" in both the operating organisations and the running of the venues.

O'Brien was found guilty of five charges of deceiving Internal Affairs, two for Blenheim-based Bluegrass Trust and three relating to gaming machine venues. The charges related to dates between 2009 and 2013, when Bluegrass made grants to various organisations, including racing clubs, of $11.8m.

The court heard that O'Brien was earning more than $1m a year lobbying on behalf of racing clubs wanting grants from gaming money. 

He invoiced the clubs for his services at the start of the season, and the Crown alleged he would then influence or control the grants process so that the clubs received about three times the amount they paid him.

The Crown alleged Mike O'Brien wanted to control pokie machine profits. (File photo)
FAIRFAX

The Crown alleged Mike O'Brien wanted to control pokie machine profits. (File photo)

However, there were no charges relating to the lobbying or the money received. The Crown alleged that, during the period the charges covered, O'Brien and related entities received $6.8m, and in a longer period from 2007 to 2013, $11.57m was received for lobbying. 

In his decision on the charges Justice Robert Dobson found Mike O'Brien was the driving force behind Bluegrass, which appeared to have been set up by his father Pat, a retired accountant and former New Zealand Harness Racing chairman.

Pat O'Brien, 83, was also charged, but removed from the trial due to his ill-health.

Mike O'Brien with horse Tique's Daughter. (File photo)
NIC GIBSON/STUFF

Mike O'Brien with horse Tique's Daughter. (File photo)

Mike O'Brien sometimes used his father's email address, and signed his father's name on documents, including writing a letter to Internal Affairs denying his involvement but completed in his father's name.

As well as influencing grants from Bluegrass, the judge found O'Brien also had some success in getting grants from gaming trusts other than Bluegrass.

"There was no direct evidence as to how Michael O'Brien had obtained that influence, but those other trusts operated machines in venues in respect of which Michael O'Brien was able to influence which operators' machines were installed," the judge said.

Coffey had deliberately downplayed O'Brien's involvement when he was talking to Internal Affairs but the judge found there was no evidence that Coffey knew O'Brien charged racing clubs to obtain grants, let alone tried to conceal O'Brien's role in the grants process. Coffey had very limited involvement after Bluegrass got Internal Affairs approval.

All four defendants had pleaded not guilty. 

 - Stuff

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