Pair used corrupt scheme to defraud North Shore City Council

Pair used corrupt scheme to defraud North Shore City Council

Hemant Kumar Maharaj and Suresh Din have been found guilty today of charges laid by the Serious Fraud Office (SFO) in the Auckland District Court.

The SFO laid charges in September 2010 against Mr Maharaj and Mr Din for their corrupt scheme within the North Shore City Council. The scheme involved using their roles as an employee and a contractor to obtain approximately $849,000 in illegal funds.

Mr Maharaj and Mr Din were found guilty of 4 joint counts of using a document with intent to defraud and 7 counts of dishonestly using a document, over a period of approximately 10
years.

Mr Maharaj has also been found guilty of two counts of attempting to pervert the course of justice in relation to the alteration and provision of a diary and the creation of a receipt book.

Mr Din has been found guilty of one count of using a document with intent to defraud and six counts of dishonestly using a document in relation to the use of income tax returns that claimed expenditure he had not incurred.

While Mr Maharaj was working for the North Shore City Council in 1999, the pair formed an agreement to invoice the Council for road and berm maintenance work. However this work was never completed. They used 151 invoices in their scheme, with Mr Din submitting the invoices under the name of S Din Family Trust. After the invoices were submitted by Mr Din, Mr Maharaj would sign off the work as being completed and forward the invoice for payment.

While New Zealand has a very clean record of corruption within the public sector, Acting SFO Chief Executive, Simon McArley says that only vigilance and robust internal processes will enable New Zealand to maintain this reputation.

"Addressing abuse of public funds by corrupt public employees is one of SFO's highest priorities. The impact of the schemes can best be addressed by the earliest possible intervention. It may take courage but we strongly encourage people to bring matters to our attention as soon as they suspect unethical practices," he said.

Mr Maharaj and Mr Din will be sentenced on 25 July.

ENDS

For further information

Andrea Linton
Serious Fraud Office
027 705 4550

Note to editors

Background to investigation

Hemant Kumar Maharaj is a qualified civil engineer and was employed by the North Shore City Council since 1990 (subsequently dismissed).

Suresh Din is self-employed and operates a food safety business that on occasion, did food safety work for the North Shore City Council.

Mr Maharaj and Mr Din had been friends for some considerable time, meeting when both were living in Fiji before immigrating to New Zealand.

Crimes Act offences

Section 117 Corrupting juries and witnesses
Every one is liable to imprisonment for a term not exceeding 7 years who-
(a) dissuades or attempts to dissuade a person, by threats, bribes, or other corrupt means, from giving evidence in any cause or matter (whether civil or criminal, and whether tried or to be tried in New Zealand or in an overseas jurisdiction); or
(b) influences or attempts to influence, by threats or bribes or other corrupt means, a member of a jury in his or her conduct as such (whether in a cause or matter tried or to be tried in New Zealand or in an overseas jurisdiction, and whether the member has been sworn as a member of a particular jury or not); or
(c) accepts any bribe or other corrupt consideration to abstain from giving evidence (whether in a cause or matter tried or to be tried in New Zealand or in an overseas jurisdiction); or
(d) accepts any bribe or other corrupt consideration on account of his or her conduct as a member of a jury (whether in a cause or matter tried or to be tried in New Zealand or in an overseas jurisdiction, and whether the member has been sworn as a member of a particular jury or not); or
(e) wilfully attempts in any other way to obstruct, prevent, pervert, or defeat the course of justice in New Zealand or the course of justice in an overseas jurisdiction.

Section 228 Dishonestly taking or using document
Every one is liable to imprisonment for a term not exceeding 7 years who, with intent to obtain any property, service, pecuniary advantage, or valuable consideration,-
(a) dishonestly and without claim of right, takes or obtains any document; or
(b) dishonestly and without claim of right, uses or attempts to use any document.

Section 229 Being in possession of instrument for conversion
Pre-2003 amendments
(1) Every one is liable to imprisonment for a term not exceeding one year who-
(a) Has in his possession by night any instrument, being an instrument capable of being used for taking or converting any of the things mentioned in paragraphs (a) to (d) of subsection (1) of section 228 of this Act, in circumstances that, prima facie, show an intention to use it for the taking or converting of any such thing as aforesaid:
(b) Has in his possession by day any such instrument as aforesaid with intent to take or convert any such thing as aforesaid.

(2) It is a defence to a charge under paragraph (a) of subsection (1) of this section if the person charged proves that he had lawful excuse for having the instrument in his possession.

About SFO

The Serious Fraud Office (SFO) was established in 1990 under the Serious Fraud Office Act in response to the collapse of financial markets in New Zealand at that time.

SFO's role is the detection, investigation and prosecution of serious or complex financial crime. SFO's focus is on investigating and prosecuting criminal cases that will have a real effect on:

• business and investor confidence in our financial markets and economy
• public confidence in our justice system and public service
• New Zealand's international business reputation.

SFO operates three investigative teams:

• Evaluation and Intelligence;
• Financial Markets and Corporate Fraud; and
• Fraud and Corruption.

SFO operates under two sets of investigative powers.

Part I of the SFO Act provides that it may act where the Director "has reason to suspect that an investigation into the affairs of any person may disclose serious or complex fraud."

Part II of the SFO Act provides the SFO with more extensive powers where: "...the Director has reasonable grounds to believe that an offence involving serious or complex fraud may have been committed..."

SFO's Annual Report 2012 sets out its achievements for the past year, while the Statement of Intent 2013-2016 sets out the SFO's three year strategic goals and performance standards. Both are available online at: www.sfo.govt.nz(external link)