SFO fraud warning over quake rebuild

ANDREA VANCE
Last updated 12:37 28/11/2012

Relevant offers

Politics

Gerry Brownlee security details differ Whale Oil blogger Cameron Slater wins quote of the year $38.7b for roads, public transport - Government Stuff's top videos of 2014 Phillip Smith escape report highlights lack of information sharing between agencies Judge orders handover of Nicky Hager raid documents Police ordered to hand over Nicky Hager search documents Brownlee declares war on defence jargon Flag needs to 'scream NZ': John Key Forum advises clampdown on alcohol ads and sponsorship

Financial crime from the Christchurch rebuild could top $4.5 billion, experts predict.

Acting chief executive of the Serious Fraud Office Simon McArley said international trends in the wake of events like Hurricane Katrina in the US and last year's earthquake and tsunami in Japan show a rash of scams and fraud often follow natural disasters.

The agency expects "fraud leakage" from the $30b rebuild of the city to be between 7 and 15 per cent, after consulting with specialists from accountancy firm Deloitte.

Potential losses will come from "fraudulent [insurance] claims, charity fraud ... recovery fraud, procurement fraud, construction fraud and even... investment fraud as capital is raised to fund the rebuild," McArley said.

The SFO has already begun working with other agencies and insurance companies to gather data to counter financial crime, McArley told MPs on Parliament's law and order select committee this morning.

"We have already picked up one two or maybe three investigations around that area," he said.

McArley denied the agency is under-resourced - despite a 250 per cent increase in its workload and only modest budget increases - and said it has the "skills and capacity" to cope.

Labour MP Phil Goff estimated the total cost of financial crime was around $8b - or between 3 and 9 per cent of the country's $170b gross domestic product.

"I don't think the actual number is really that significant," McArley said.

"I think what we have to recognise is that it is a big issue, it is a big amount of our economy ... it is going to parts of the economy which we don't intend it to."

Ad Feedback

- (Live Matches)

Special offers
Opinion poll

Should the speed limit be raised to 110kmh on some roads?

Yes

No

Vote Result

Related story: 110kmh limit moves closer

Featured Promotions

Sponsored Content