Six people have been arrested, and search warrants or other activities undertaken at over 25 locations in the North and South Islands, in a major joint enforcement agency operation lead by the Serious Fraud Office (SFO).
‘Operation Audit,’ was also supported by New Zealand Police, Organised and Financial Crime Agency of New Zealand, Commerce Commission, New Zealand Customs, and Inland Revenue.
SFO and these agencies formed a multi-agency task force in May 2012.
The operation, first of its type, targeted an advertising invoice scam allegedly operated by the group, which sold advertising in magazines that were either never printed, or the number printed and circulated was grossly exaggerated.
The magazines were generally titled in a way that suggested worthwhile causes such as road safety, parenting or drug addiction.
It is alleged that the scam has generated up to $1.6 million since 2008.
The five-month investigation followed initial coverage by TV3’s ‘Campbell Live,’ and involved covert investigation, detailed analysis of banking records and numerous victim interviews.
While more than one of the agencies involved had been aware of the group’s activities for some time, the joint agency approach enabled a detailed and multi-faceted investigation to be completed in a relatively short time.
Five accused have been charged with multiple fraud offences and with participating in an organised criminal group. A sixth accused has been charged with participating in an organised criminal group.
The arrests were made in Auckland, Picton and Port Waikato with over 60 staff from the various agencies involved in the operation.
Costly business
SFO Acting Chief Executive Simon McArley said that invoicing scams cost New Zealand businesses hundreds of thousands of dollars a year and small businesses and charities are often the target.
“While the dollar amount of alleged offending is not huge, taking action in relation to high volume/low value fraud is important. Overall there can be a significant impact on the economy.”
According to him, ‘Operation Edit,’ was an excellent example of government agencies working together to prevent crime.
“The agencies were able to each contribute specialist skills and achieve a result that none working alone would have been able to. High volume/low value fraud is particularly difficult to address effectively, and this is a good example of agencies bringing together their skills,” he said.
Source: Serious Fraud Office
