18 Nov 2008

Lawyers for fraud accused address court

9:37 pm on 18 November 2008

The defence lawyers for two men accused over a $17 million Otago District Health Board fraud case briefly addressed the jury on Tuesday.

The health board's former chief information officer, Michael Swann, and his friend, Queenstown surveyor Kerry Harford, deny three joint fraud charges in the High Court at Dunedin.

The Crown alleges that two companies headed by Mr Harford invoiced the health board for IT services that were never provided.

The companies were paid $16.9 million between 2000 and 2006 - 10% of which was kept by Mr Harford and the remainder forwarded to Mr Swann.

Mr Swann's lawyer, John Haigh, QC, told the jury those facts are not disputed, but said there was no intent to defraud.

Ross Black, the former chairman of Healthcare Otago, which later became Otago District Health Board, told the court he had no knowledge of the contracts.

Mr Black, Healthcare Otago's chairman between 1998 and 2001, said that at the time, Dunedin Hospital was running at a deficit, and there was a public crisis of confidence in its management.

Mr Black introduced rules so that expenditure could be authorised only by the board of directors.

He said he had no knowledge of the 16 contracts with Mr Harford's businesses that Mr Swann signed on behalf of the board.