Alex Swney jailed for fraud, tax evasion

6:33 pm on 24 June 2015

The Auckland District Court has been told the disgraced former head of the city's downtown promotion agency defrauded the agency of $2.5 million because he felt he wasn't paid enough.

Alex Swney at Auckland District Court on 24 June 2015.

Alex Swney at Auckland District Court, where he was sentenced today. Photo: RNZ / Kim Baker Wilson

Alex Swney has been sentenced to a total of five years and seven months in prison for fraud and tax evasion.

Judge Grant Fraser told the Auckland District Court the sentences were near the maximum available, and were a condemnation of Swney's conduct with public money.

"No tangible reasoning could be provided in relation to the Heart of the City offending, apart from a justification on your part that your actions occurred because you felt you were being underpaid by Heart of the City."

Swney has been sentenced to three-and-a-half years for creating and approving false invoices, which were used to obtain $2.5 million from the ratepayer-funded agency.

He has been given a further two years and one month for evading personal tax and GST of $1.8 million.

Auckland CBD

Alex Swney spent two decades in the spotlight as the promoter of Auckland's CBD. Photo: SUPPLIED

A lawyer for the Serious Fraud Office also told the court Swney's motivation had been that he felt underpaid and that his contribution hadn't been fully recognised by Heart of the City, which he founded nearly 20 years ago.

The court was told Swney had repaid, or had the funds available to repay, $331,000 - just 8 percent of the money involved - but there was little possibility of getting much more back.

Judge Fraser said the balance was tied up in trusts, which were legal entities separate from Swney.

He said all of Swney's dishonesty had been for personal gain, with spending which included buying exclusive properties, held in a network of trusts.

Swney's lawyer Murray Gibson told the court his client had been effective and hard-working, and that Auckland was better for the work done by Heart of the City.

He listed achievements under Swney's leadership, including the installation of closed-circuit television cameras in the inner city, which helped reduce petty crime and violence.

Outside the court, Inland Revenue group tax counsel Graham Tubb said the department would pursue more of what Swney owed, saying it already had a court judgement for the sum owed.

Swney's offending was at the top end of the scale, he said.

"A significant abuse of trust and it's right up there in terms of the more significant end of offending that we've seen in terms of people entrusted with public monies.

"It is very serious."

Graham Tubb, Inland Revenue's group tax counsel.

Inland Revenue group tax counsel Graham Tubb speaks to media today outside court. Photo: RNZ / Kim Baker Wilson

Judge explains length of sentence

Judge Fraser said the starting point for the two sets of charges added up to 10 years however, when looking at the offending as a whole, eight years was more appropriate.

He said he deducted 10 months for the remorse shown, Swney's co-operation and limited reparation. A further 19 months was allowed for Swney's early guilty pleas.

Swney was also fined $500 for allowing the warrant of fitness to lapse on a building he owned.

Judge Fraser set no minimum period before parole could be considered.

Terry Gould, chair of Heart of the City.

Heart of the City chair Terry Gould said in December that civil proceedings against Swney had started in the High Court. Photo: RNZ / Todd Niall

Heart of the City, which is partly publicly funded, has previously said it was angry at the level of deceit and the scale of the theft.

The troubles with its former chief executive led Heart of the City to pull funding from several events by suspending sponsorships.

One of the larger items to go from the agency was Auckland's six-storey high Santa, which had been part of Christmas in Auckland for 54 years.

Heart of the City said last year it could no longer afford the $180,000 cost, and the private sector stepped in to save the Santa.

Swney led the agency for nearly two decades. It has launched separate civil proceedings against him.

Fall from grace

Alex Swney enjoyed two decades in the spotlight as the promoter of Auckland's CBD, including a series of unsuccessful attempts to break into politics.

The 57-year-old became the "go-to guy" for national and local media wanting a colourful take on everything from the proposed extension of the city's wharves to re-paving downtown footpaths.

Swney was an easily-recognised figure around town, commuting on a Vespa motor scooter.

He was one of the founders of Auckland Now, the centre-right local body ticket which won two seats on the Auckland City Council, although Mr Swney himself failed to be elected.

In 1999, he stood unsuccessfully for ACT in the Tamaki electorate and the following year missed out on a seat on the Auckland Energy Consumers Trust, which owns 75 percent of lines company Vector.

Other failed tilts at city politics included a run for the Hobson ward seat in 2001, the mayoralty in 2007 and the Waitemata and Gulf Ward in 2010, when the amalgamated Auckland Council was created.

The repeated failures to enter politics did not dent the enthusiasm with which he led Heart of the City, an incorporated society which initially represented downtown firms.

It has grown to become one of 48 business associations in the Auckland region.

Mr Swney's public life had continued unchanged while the court proceedings continued against him, until his name suppression was lifted in October.