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13 July 2017

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In this Gambits:

  • Two men sentenced for pokie related fraud

Two men sentenced for pokie related fraud

Internal Affairs has welcomed the sentences handed down in a multi-million dollar gaming machine fraud case today. 

Michael Joseph O’Brien (58), of Blenheim, was sentenced on five charges of ‘Obtaining by deception’ to 4-1/2 years’ imprisonment. Kevin Coffey (57), of Hastings, was sentenced on one charge to 12 months’ home detention. A third defendant Paul Anthony Max (60), of Nelson, will be sentenced on 27 July.

During sentencing Justice Dobson noted the offending “involved persistence and determined deception of a Government agency that is charged with regulating a business… The regulatory system depends on the integrity of applicants. It is conduct that needs to be denounced in the strongest terms, and deterred in the strongest terms the law allows".

Gambling Compliance Director Gareth Bostock said the sentences reflect how seriously the court views the misappropriation of community money and sends a strong message over corrupt practices in the gambling sector.

“We want to ensure that the right people with the right motives enter the sector and that their activities are consistent with the law,” Gareth said. “Operation Chestnut was necessary because gambling grant funding was being diverted away from the communities it was meant to serve.  The sector needs to create a culture of integrity where this type of behaviour is not tolerated and everyone involved in the industry ‘does the right thing’ by communities.”

The major investigation named Operation Chestnut and prosecuted by the Serious Fraud Office (SFO), involved the SFO, the Police’s Organised and Financial Crime Agency of New Zealand (OFCANZ), and Internal Affairs (DIA).

“This multi-agency approach was necessary to break through the criminal behaviour that had developed in some parts of the class 4 gambling sector,” Gareth said. “New Zealand communities should expect the highest integrity from the gambling sector so that community organisations can access grants from gambling societies without the concern that funding is being directed unlawfully. The Department has a specialist team of investigators and continues to investigate fraudulent activity in the sector.  We have developed an enduring model for working together with the SFO and the Police and will do it again if the need arises.”

Through the Chestnut investigation the Department cancelled the licences of two gambling societies and took steps to ensure that a number of unsuitable people were unable to continue working for societies or the pubs which house pokie machines. The Department is applying a high level of scrutiny to societies before licences are granted or renewed.