Economic crime

Written By: - Date published: 12:08 pm, February 13th, 2013 - 34 comments
Categories: benefits, class war, crime, law, scoundrels - Tags:

Yes, the Nat’s economic policies are a crime against common sense and the vast majority of the people. But currently in the news is the other kind of economic crime – white collar crime – fraud and tax evasion. We have a new report on the impact:

Economic crime costs NZ billions each year, Govt reveals

White collar frauds and economic crime costs the country billions of dollars each year, government officials have concluded.

Minister for the Serious Fraud Office Anne Tolley said many Ministries had been working for two years on a Cost of Economic Crime report that was due to be presented to cabinet soon.

Tolley, speaking at the inaugural Economic Crime Action Network meeting in Auckland yesterday, said: “Economic crime can range from pro forma invoicing schemes that drain the resources of small businesses and charities, to Ponzi schemes, to fraudulent finance companies that destroy the retirement savings of a generation.”

She said the report was unable to generate a firm methodology to precisely calculate the annual cost, but officials had concluded the cost was “likely to be in the region of many billion of dollars per year.”

Billions. Per. Year. (Similar to previous estimates of $1 to $6 Billion.) And where does National put its energies? Into chasing the comparatively insignificant problem of welfare fraud ($22 Million in a typical year). Where does the court system put its priorities? They like to jail welfare fraudsters more often than the (150 times more damaging) tax dodgers.

Our priorities as a country are completely screwed. If we put as much energy into cracking down on economic crime as we did chasing welfare cheats – we could afford a proper welfare system…

34 comments on “Economic crime”

  1. Tiresias 2

    “Where does the court system put its priorities? ”

    The Courts can only act on what is brought to them.

    ““Economic crime can range from pro forma invoicing schemes that drain the resources of small businesses and charities, to Ponzi schemes, to fraudulent finance companies that destroy the retirement savings of a generation.” – Tolley.

    None of these represent a direct loss to the Exchequor – or even the country. They’re merely a re-distribution of wealth from the worthy to the unworthy. On the other hand Welfare fraud is direct theft from the Exchequor – although that doesn’t cost “New Zealand” anything either.

    While I’m all in favour of cracking down on financial fraud as much as welfare fraud the only thing that can be said to cost “New Zealand” billions is tax avoidance as this represents income lost to the Exchequor.

    • Draco T Bastard 2.1

      The Courts can only act on what is brought to them.

      But why do they jail someone for a few thousand dollars of benefit fraud while white-collar criminals who steal millions get community service?

      • Colonial Weka 2.1.1

        What do the sentencing guidelines say?

        • aerobubble 2.1.1.1

          More context please. A person eligible for a benefit may mislead to get more than their fair entitlement. They are then asked to repay the full amount include what they were entitled too plus tax (brought in by Labour to boost the cost of welfare and so beat up on them). So its unfair to say that people who screw themselves by defrauding the Exchequer of a small percentage of their entitlement and yet lose their full entitlement for the period of the fraud are actually costing the exchequer, in fact its a saving the exchequer who has a vested interest in create and catchin gthe fraud and lowering the obligation to the exchequer. Pushes the cost on to family of the fraudster (who pick up the slake), crime, and poverty (disease). So really in some cases its looks like a bookkeeping windfall but actually is a long term additional cost, even generational hole (and we haven’t even started on the cost of imprisoning the poor sap). I mean a person lies and to get a few extra dollars a week, and has pay back thousands (which courts then stretch out over their lifetime or wipe off), and some idiot neo-liberal penny count thinks its a win.

          Please. People are now arguing that the crime of benefit fraud is meaningless by implication, as a negative income for everyone essentially makes the fraud impossible to commit.

          So I laugh when I hear some National voting, ponsi investor who lost their shirt, who was worried about benefit fraud and let National and Labout ignore the white collar crime binge
          that is the hallmark of the last 30 years of western capitalism. Its a giant pyramid scheme,
          to get in you argue that all that matters are profits, if you got in early you walked away with countless millions, as everyone below you gave up wages, borrowed, and funneled their money into the financial system – without any extra wealth creation, just booking keeping bubble markets.

        • QoT 2.1.1.2

          Who wrote the sentencing guidelines?

  2. Rogue Trooper 3

    read about the high, actual “body count” implications of ponzi financial fraud, ala Madoff, the other day.; These frauds take livesfar less cleanly than “crimes of passion”.

  3. infused 4

    It’s say because they are very hard to crack and take huge amounts of time / resources.

    Macleans IT did a Phoenix last year (most probably, illegally) and the serious fraud office said they had no time to investigate.

    http://computerworld.co.nz/news.nsf/news/maclean-computing-sells-assets-to-maclean-technology

    Whole thing stinks.

    • quartz 4.1

      Ha! The liquidator in that dodgy deal was Damien Grant. Classic.

    • fatty 4.2

      It’s say because they are very hard to crack and take huge amounts of time / resources.

      But if we are talking billions of dollars – surely the time & resources argument would mean that we can’t afford to ignore it?

  4. tc 5

    Oz learned that lesson in the 90’s after Skase/Bondy etc and recruited top talent, paid them, gave them sweeping powers and went after them hard. Ex WA premier Brian Bourke being a good example.

    Shonkey’s mob will never go after mates, Feeny’s paid to talk a good game with no players and a new rule book, as ineffective as the last one, the corporate crooks laugh at.

    The white collar crooks influence &/or are the rule makers via various groups and report writers so they’re always one step ahead, they can also afford the better resources to keep the authorities at bay.

    Trolley gets whelled out to perform for the crowd again.

  5. just saying 6

    Didn’t this government reduce resources available to the Serious Fraud Office?

    Must have been another example of reducing the costs for their mates, of doing business in NZ 🙂

    Some of the statements made by the judicary when sentencing benefit fraudsters recently should have drawn the attention of the Human Rights Commission, (if we actually had such a watchdog, rather than the facade of one.) It is, in theory, unlawful to discrimate against people on the grounds of employment status. The sentences given to beneficiaries, compared to those given to big league fraudsters, provide further evidence of discrimination.

  6. I appear to have a theme going on today:

    “But what is liberty without wisdom and without virtue? It is the greatest of all possible evils; for it is folly, vice, and madness, without tuition or restraint. Those who know what virtuous liberty is, cannot bear to see it disgraced by incapable heads, on account of their having high-sounding words in their mouths.”
    ― Edmund Burke (1729-1779)

  7. Rogue Trooper 8

    at least it’s not burqa 😉
    anyway, from over at Hedge (junk bonds are piling up)
    http://www.zerohedge.com/contributed/2013-02-12/warning-eu-crisis-back-and-will-be-worsening-coming-weeks

    • RedLogix 8.1

      An interesting and “why am I not surprised” read there RT. The bedrock of any economic system, indeed of all human affairs, is trustworthiness. Without it everything grinds to a halt.

      This is also the reason why major economic crimes are downplayed and minimised … the establishment instinctively understands that these stories of white collar fraud and bank fraud undermine this essential trust … and that there is a tipping point (no-one knows exactly where) when the system collapses.

      And I wouldn’t discount the collusion of ordinary people in this either. Most people understand at some level that if the system collapses everything changes … and probably not in a good or comfortable way. So most people are quite willing to be outraged at some beneficiary diddling a few thousand, while remaining apathetic about billions looted by bankers.

      • Rogue Trooper 8.1.1

        your work is consistently outstanding Red (any feedback for a mutt like me?)

        • RedLogix 8.1.1.1

          RT … thanks. But I’m so humourless about it. Not my strong point; which is why it’s a team effort.

          And along the way I’ve been handed my arse by a few masters.

  8. johnm 9

    This shit sit now reflecting on ordinary kiwis who continue to vote for the key fantasy of wealth while ignoring the poverty of their brothers and sisters. The beginning of a shit society of alienation and inequality. Well done you kiwi fools. You want to fuck the key fantasy but’ll disappear soon enough you stupid fucks. 🙁

    • Mary 9.1

      “The beginning of a shit society of alienation and inequality.”

      Maybe a bit further on now than merely the beginning but yes, what’s been going on for the last 30 years or so has alienated and increased inequality. The market will decide thinking that’s caused much of this ignores everything about humans – how we think, act, react, decide, make mistakes, care, love, value and so on. Ignoring this basic premise makes what Key et al are doing, as well as former Labour governments, of course, morally wrong. But I guess when greed’s involved there’s no room for morality or what’s right, regardless of the truest truth. It’s so interesting looking at Key’s eyes when he’s talking in front of a camera. He’s just got no idea about people, which I suppose may account for thow he comes across as just not caring.

      • xtasy 9.1.1

        Mary:

        “The market” is so often cited and quoted, in media, and certainly by government.

        But what does “the market” really mean. I any case, there is not, nor has there ever been a totally free and equal “global” market. It is all much talk about hypothetical and pseudo idealistic scenarios that never eventuated, nor will they ever do so.

        “Market” means anything, like a small market, a selected market, a larger market, a regional market, a town market, a trade related market, a social market, and then of course the “global market”.

        We get this “market” argument drummed down our throats day and night, as the final and total elixier of beneficial development, to make us all better off.

        In reality it is a farce, a slogan, an empty phrase in many cases, as few “markets” are real fair and free markets.

        NZ is part of a global market where it sold so many rights and restrictions, the other players have more clout and can demand what they want, while little NZ is having to bend and buckle all the time, to justify a trade relationship.

        It has become idiotic, but we have governments still tell us, we must do this, we must sell assets, land and lower workers rights, otherwise we will not survive as an economy. That is in a world hanging out for food, sound and clean environment, where millions of workers and entrepreneurs would love to come and migrate here.

        Tell us another story dumb Hone Key, you are not convincing. NZ will never starve or suffer, it will be in high demand even with fair and good wages and salaries, because too many other countries have been stuffed up, so many want to come her, no matter how expensive it is.

        Your argument is BS, John Key, same as your government, what NZ needs is a fair solution, so locals also get a fair chance and life, that is what Kiwis ask you and others for.

        And last not least, you run an oligopoly economy, where a few players suck us all dry, while we are ripped off with over above average world prices for consumer goods, food and housing. F that, thank you, JK!

  9. Afewknowthetruth 10

    Barclays rigging LIBOR

    HSBC laundering Mexican drug money.

    HSBC, Barclays, Lloyds, RBS selling fraudulent financial packages.

    Fraud at the top is the new norm.

    • pollywog 10.1

      Double Dipton is the new black…which is the same as the old black.

      Nzers need to aspire to being greedy and selfish. Fuck being middle class. It’s the predator class we should aspire to become.

  10. tracey 11

    when the courts or kangaroo tribunals get their chance… they let us down

    http://nzhpremiumcontent.blogspot.co.nz/2005/12/brian-rudman-cullens-jungle-law-antics.html?m=1

  11. tc 12

    We should add the billions this govt is about to rip off kiwis by selling the assets on the block.

  12. Afewknowthetruth 13

    Ned Kelly was right.

    That’s why they hanged him.

  13. xtasy 14

    White collar crime – trivial side issue

    Welfare “fraud” (usually overpayment due to failure to report change of circumstances on time) – SERIOUS!

    That is the equation, and it will not change. Tolley is a hypocrite, same as Key, going on about this stuff, she only talks about it, because her job requires her to show her face and say something.

    It is the international organisations that are more forceful and honest. They should actually conduct a major, independent, internationally staffed investigation in the corruption that involves the Key government here!

    They may come across some surprising results after all.

    Given deals like the convention centre to be built by Sky City Casino for a good return perk, the Hollywood deal for allowing movie companies here to get tax credits and favourable working conditions, the dodgy deal about refugees to be accepted from Australia, the dealings Mr joyless Joyce made re Mediaworks, the peculiar workings about how to assist Hollywood and the US agencies to prosecute outside of the law a Dotcom entrepreneur, the bizarre way the Southern China Airways deal was allowed with Sky City Casino (compromising immigration rules), the Crafar Farm deal, the other various “foreign investment” consents, and much, much more, I think NZ has a heck of a lot to answer to, but where is the bloody accountability?

    Key is not the PM I ever wanted, but sadly a majority of emotionally “drunk” public voters voted the great shownman in. That kind of event is usually the first warning sign for any society, where Transparency International starts taking a serious focus.

  14. BLiP 15

    .

    . . . Given deals like the convention centre to be built by Sky City Casino for a good return perk, the Hollywood deal for allowing movie companies here to get tax credits and favourable working conditions, the dodgy deal about refugees to be accepted from Australia, the dealings Mr joyless Joyce made re Mediaworks, the peculiar workings about how to assist Hollywood and the US agencies to prosecute outside of the law a Dotcom entrepreneur, the bizarre way the Southern China Airways deal was allowed with Sky City Casino (compromising immigration rules), the Crafar Farm deal, the other various “foreign investment” consents, and much, much more, I think NZ has a heck of a lot to answer to, but where is the bloody accountability? . . .

    Righteous rant, comrade, and you have, fer sure, picked up some of the headline issues that need closer inspection, and asked the right question. Thing is, there is no accountability. These days, being able to “game” the system and rort the punters is looked upon as being sharp business practise, carried out every day by John Key’s aspirational neophytes, complete with knowing winks, sly smiles and a firm “fuck you” to anyone who might complain about it. Get in while you can, is the rallying cry. Even our farmers have taken John Key’s message to heart and, in their haste to be ashpurashnul have tried their hand at the financial derivatives market. Of course, John Key was just delivering the naive into the hands of the venal.

    The aspiration message from John Key ignores the fact that he managed to accumulate $50 million without producing a single widget or millking a single cow. His first three years in office have resulted in the under-resourcing and under-mining all regulatory authorities to the point of stasis. Right now, its game on for every to come up with their own wangle and this latest report ain’t gonna change a thing.

  15. Afewknowthetruth 16

    By the way, THE ECONOMY, as presently constituted (looting of fossil fuel resources by corporations and converting them into CO2, thereby progressively destroying the habitability of the Earth) IS A CRIME against the next generation, who a decade from now will have to attempt to scratch a living on a resource=depleted and overheated planet.

    The economy is a crime and it is run by criminals.

  16. ChrisH 17

    Check out the theory of “control fraud” on Wikipedia, http://en.wikipedia.org/wiki/Control_fraud. Foxes guarding the henhouse. One hopeful sign is that the IMF has appointed George Akerlof, an expert on what he calls “looting”: http://www.imf.org/external/pubs/ft/fandd/2011/06/people.htm

    • Colonial Viper 17.1

      Yep, I learnt about the phenomena of Control Fraud by listening to William (Bill) Black online. He was a prosecutor during the S&L crisis of the 1990s.

  17. Red Rosa 18

    The NBR has some interesting comments on Dame Shipley and Mainzeal

    http://www.nbr.co.nz/article/jenny-shipley-denies-conflict-ch-135859

    Trading while insolvent?

    Conflict of interest?

    Sure as hell looks like both.

    And say what you like about Winnie (mostly justified of course!) he again seems to be onto it.

Links to post

Recent Comments

Recent Posts

  • All Kiwis to have same standard of cancer care
    Labour is promising that all New Zealanders will have access to the same level of cancer care no matter where they live in the country, says Leader of the Opposition Andrew Little.   “As someone who has survived cancer I ...
    9 hours ago
  • Infrastructure announcement too long coming
    “What took you so long?” is Labour’s response to the Government’s announcement of a new infrastructure investment vehicle. Labour’s Auckland Issues spokesperson Phil Twyford says Labour announced its policy in 2015 to debt-finance infrastructure and service that debt with targeted ...
    9 hours ago
  • Time for a breather on immigration
    National has no idea how to house the record number of people entering New Zealand, let alone cope with the pressure on health, education, and transport from this record population growth, says Labour’s Immigration spokesperson Iain Lees-Galloway. ...
    2 days ago
  • Labour to invest $4 billion in education
    Labour’s Education Manifesto will bring positive change across the education sector and is backed by a massive investment, says Labour’s Education Spokesperson Chris Hipkins.  “Labour’s plan will see an extra $4 billion invested over the next four years. It’s organised ...
    2 days ago
  • National’s shame: worst homelessness in the OECD
    National’s legacy is a housing crisis that has given New Zealand the worst homeless rate in the developed world, says Labour’s Housing spokesperson Phil Twyford. ...
    3 days ago
  • Labour taking action on school donations
    Labour will end so-called voluntary school donations for the majority of parents across the country under its $4 billion plan to revitalise the education sector, says Labour Leader Andrew Little. “Labour has always been committed to a world-class free education ...
    3 days ago
  • Labour to work with Queenstown to build more houses
    Labour will work with Queenstown-Lakes District Council, iwi, and the Community Housing Trust to build the modern, affordable housing Queenstown desperately needs, says Leader of the Opposition Andrew Little. ...
    3 days ago
  • Nats blow the Budget on motels after bowling state houses
    National is spending $140,000 a day putting homeless families in motels, the legacy of nine years of selling off and knocking down state houses, says Labour Housing spokesperson Phil Twyford. ...
    3 days ago
  • New revelations in Joanne Harrison report
    The State Services Commission’s report into the treatment of whistle-blowers by Joanne Harrison has revealed new accusations against the convicted fraudster, says Labour MP Sue Moroney.  “The report found that four staff inside the Ministry of Transport who had raised ...
    3 days ago
  • Snafu at Princess Margaret
    Jonathan Coleman has to stop the stalling over a new building for mental health services in Christchurch to replace the quake damaged Princess Margaret Hospital, says Labour’s Health spokesperson David Clark. “The Government must accept that Christchurch is still recovering ...
    4 days ago
  • Labour’s fiscal plan to build a fairer New Zealand
    Labour will re-build our housing, health and education while responsibly managing New Zealand’s finances, says Leader of the Opposition Andrew Little.  “Under Labour’s Fiscal Plan we will deliver big investments in the services we all need and care about, invest ...
    4 days ago
  • Nats show they’re the tax dodgers’ best friends
    The government is taking the knife to IRD at a time when we need a highly skilled department to ensure that multinationals and speculators don’t get away with dodging tax, says Labour’s Revenue spokesperson Michael Wood. ...
    4 days ago
  • Labour secures the future for NZ Super
    A Labour Government will secure the future for New Zealand Superannuation so we can continue to provide superannuation to those retiring at age 65, says Leader of the Opposition Andrew Little. “One of the first things a Labour-led Government will ...
    5 days ago
  • Multinationals must pay fair share of tax
    A Labour Government will crack down on multinational companies that are dodging paying their fair share of tax, says Labour Leader Andrew Little. “New Zealanders are missing out by hundreds of millions according to the IRD because multinational companies can ...
    6 days ago
  • ACT’s approach to children backward and ill informed
    Act’s new deputy leader’s claim that Labour’s support for families could “extend the misery of child poverty and even child abuse” is ill informed and offensive, says Labour’s Deputy Leader Jacinda Ardern. ...
    1 week ago
  • Canterbury hatchet job a disgrace
    The Government’s glib acceptance of advice that the Canterbury District Health Board doesn’t need more money is a hatchet job and a disgrace, says Labour’s Health Spokesperson David Clark. “To claim that the DHB was using tactics to leverage more ...
    1 week ago
  • Quality for Kiwi kids at ECE
    After more than a decade of rapid growth in the number of children participating in Early Childhood Education (ECE), it’s time to take stock and map out a clear plan for the future, says Labour’s Education spokesperson Chris Hipkins. ...
    1 week ago
  • Labour to boost ECE quality
    Labour will ensure kids get the best start in life by boosting funding for Early Childhood Centres to employ 100 per cent qualified and registered teachers, says Leader of the Opposition Andrew Little. ...
    1 week ago
  • Labour will stump up a million dollars for Maniototo Hospital
    A Labour led Government will make a million dollars available to rebuild the Maniototo Base hospital in Ranfurly, says the Leader of the Opposition Andrew Little.  “This will be a much needed boost for a long overdue rebuild that has ...
    1 week ago
  • No vision for the West Coast
    The West Coast welcomes any Government investment in our region but the lack of any real alternative vision for the West Coast’s economy is disappointing, says Damien O’Connor Labour’s West Coast-Tasman MP.  “The establishment of a Mining Research Unit will ...
    1 week ago
  • National’s youth work scheme too little too late
    After nine years, National’s belated attempt to provide work opportunities for unemployed youth should be seen for what it is, a half-hearted, election gimmick from a party that’s ignored the problem till now, says Leader of the Opposition Andrew Little. ...
    2 weeks ago
  • Kiwis won’t fall for Joyce’s spin
    Steven Joyce’s embarrassingly obvious spin on Labour’s Families Package won’t fool anyone, says Labour’s Finance spokesperson Grant Robertson. ...
    2 weeks ago
  • Labour prioritises families and public services
    Labour’s Families Package delivers a bigger income boost to more than 70 per cent of families with children than Budget 2017. By not spending $1.5 billion a year on tax cuts, Labour is able to do more for lower and ...
    2 weeks ago
  • Kiwis can’t sleep in your ghost houses, Nick
    The Government’s housing infrastructure announcement is another Nick Smith special – over-promising with no detail on delivery, says Labour’s Housing spokesperson Phil Twyford. ...
    2 weeks ago
  • Labour helps older New Zealanders and low income families with winter heating bills
    Labour will further boost its commitment to warm, healthy housing with a Winter Energy Payment for superannuitants and people receiving main benefits, says Leader of the Opposition Andrew Little. “Everyone deserves a warm, healthy home to live in. But that’s ...
    2 weeks ago
  • National must rule out retrospective override for Ruataniwha
    National must categorically rule out using retrospective legislation to override the Supreme Court’s decision that the land swap of conservation land flooded by the proposed Ruataniwha Dam was illegal, says Labour’s Shadow Attorney General David Parker. “Having not got their ...
    2 weeks ago
  • Flavell’s failure a win for Māori landowners
    The Māori Development Minister’s admission that his unpopular Ture Whenua Māori Bill won’t pass into law prior to the election is a victory for Māori landowners, but only a change of government will keep the Bill gone for good, says ...
    2 weeks ago
  • Stats confirm growing housing shortfall
    National’s failure to fix the housing shortage has been starkly illustrated by new statistics, says Labour Housing spokesperson Phil Twyford. ...
    2 weeks ago
  • Systemic abuse of kids in state care
    After admitting there was systemic abuse of children in State care the Government must do the right thing and launch an independent inquiry, says Labour’s Deputy Leader Jacinda Ardern. ...
    2 weeks ago
  • Migrant worker exploitation needs sharper focus
    The astonishing number of employers found guilty of exploiting migrants shows that migrant exploitation is a serious problem in New Zealand, says Labour Workplace Relations and Safety spokesperson Iain Lees-Galloway. “A total of 53 companies have been banned from recruiting ...
    2 weeks ago
  • Minister faces questions over dam debacle
    Today’s Supreme Court ruling dismissing an appeal to allow a land swap for the controversial Ruataniwha Dam is a victory for our conservation estate and Hawke’s Bay ratepayers, but leaves the Conservation Minister with serious questions to answer, says Ikaroa-Rāwhiti ...
    2 weeks ago
  • Too little too late on Wellington housing
    The announcement today on social housing in Wellington by the National Government is a pitiful and cynical election ploy, says Labour’s Wellington Central MP Grant Robertson. “In 2012 Housing New Zealand emptied out the Gordon Wilson Flats, taking 130 places ...
    3 weeks ago
  • Foreign trusts wilt in the sunlight, but more transparency needed
    The fact that the numbers of foreign trusts registered in New Zealand has plummeted after the Government’s belated and reluctant imposition of a new reporting regime, in the wake of the Panama Papers scandal, shows the need for a transparent, ...
    3 weeks ago
  • Speech by Grant Robertson: The Future of Work and Labour’s Economic Vision
    At the election in September voters will face a choice between a government led by Andrew Little with a fresh approach to give every New Zealander a fair share in prosperity or the continuation of a tired government, out of ...
    3 weeks ago