11 Mar 2009

Pair jailed for $16.9m fraud of Otago DHB

5:43 pm on 11 March 2009

Two men who defrauded the Otago District Health Board of almost $17 million have been jailed.

It is believed to be the largest case of employee fraud in New Zealand history.

From 2000 to 2006, the men filed 196 false invoices to the district health board totalling $16.9 million.

The DHB's former IT manager, Mike Swann, was sentenced to nine-and-a-half years in jail, with a minimum non-parole period of four-and-a-half years.

His friend and co-offender, Queenstown surveyor Kerry Harford, was jailed four years and three months.

The pair have been in custody since they were convicted of three joint charges of fraud late last year.

Harford kept 10% of the money and forwarded the remaining 90% to Swann, who spent it on luxury cars, boats and property.

Justice Stevens told the High Court in Dunedin on Wednesday it was by no means a victimless crime, saying the offending was on a grand scale and affected not only the hospital, but the wider community.

Justice Stevens told Swann and Harford their offending has had devastating effects, including an erosion of confidence in the public health system.

The judge said in Swann's case, it was hard to think of a more serious and cynical breach of an employer's trust, as he was a a manager with significant power, influence and responsibility.

Justice Stevens said the case may be the largest fraud in New Zealand history and arose in an area of public health where financial resources are particularly scarce.