SFO fraud warning over quake rebuild

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

Relevant offers

National business

Milk made in laboratories to hit shelves How to spot a fraudster Beware: Google's golden goose may lay a rotten egg Coup for Epic co-founder Big city office rents on the rise It's business time again Self-discipline is key to manage money Auction site Wheedle closes Arm injury costs Sollys Freight $67K Strong NZD not bad for all

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

Featured Promotions

Sponsored Content