SFO fraud warning over quake rebuild

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

Relevant offers

National business

Wellington mayor takes a swipe at landbankers on city fringes, lowers rates increase No smokes without fire: Philip Morris' 'Heat not burn' tobacco sales under scrutiny House investors hit record in Auckland, first home buyers fall: CoreLogic What's the deal with Facebook and tax? Rob Stock: I'm not saving for a stranger Chart of the day: Auckland's ageing population Financial advisers cluster around wealth, Financial Markets Authority Census shows Importers and exporters expect dollar to tread water Business outlook brighter in Wellington than nationwide, local bosses believe Digital talent takes flight with Air New Zealand

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