DIA media release

What if? Website Reminder:
ORFU – Otago Rugby Football Union
TTCF (Inc) – The Trusts Charitable Foundation (being wound up; established as a Charitable Trust by deed in July 1989)
TTCF Ltd – The Trusts Community Foundation Ltd (set up and licensed on 11 June 2010)

Received yesterday.

[Begins]

Department of Internal Affairs
Media Release

25 May 2012

Sentenced for defrauding community of pokie grants

An Internal Affairs investigation uncovered a pokie machine rort that resulted in a significant loss of grant funding going to the community. The investigation revealed that numerous grant applications to gaming machine societies from Counties Manukau Bowls (CMB), an umbrella organisation for South Auckland bowling clubs, were fraudulent.

From late 2006 to September 2009 Counties Manukau Bowls employed Noel Henry Gibbons, 79, of Manurewa, to apply for gaming machine grants.

Mr Gibbons implemented a scheme whereby constituent clubs or CMB itself would invest indirectly in purchasing pubs where pokie machines operated – so that in turn those clubs could benefit from grants of pokie machine proceeds.

Mr Gibbons also applied for grants from gaming machine societies for “bowling green maintenance” – but some of the money was used illegally to repay loans for the purchase of pubs. This money should have been distributed to local community purposes as grants. Paying off loans is a commercial and illegal use of funding generated from pokie machines.

Mr Gibbons fabricated quotes and invoices from “green keeping contractors” to support grant applications and the provision of services. None of those named in the invoices as billing for a service knew anything of the work they were supposed to have done.

He was sentenced in the Manukau District Court today to six months’ community detention for obtaining $605,550 by deception and of using forged documents.

Judge Charles Blackie said Gibbons’ offending was a “very elaborate” scam and an “unlawful scheme”. The defendant knew he acted dishonestly each time he made a false application and this was at the expense of the community.

Judge Blackie emphasised the need to hold the defendant accountable and responsible, to deter others who might be inclined to “rip off” the system, and to provide for the community’s interests as the victims of this offending. He adopted a starting point of two years six months’ imprisonment but imposed a lenient sentence because of Gibbons’ guilty plea, advanced age and poor health.

Maarten Quivooy, Internal Affairs’ General Manager of Regulatory and Compliance Operations said organisations cannot expect that buying into pokie machine venues will ensure favourable treatment for grant applications.

“It’s illegal and the Department works to ensure that pokie money, which belongs to the community, is protected,” he said. “We want to ensure that community groups have fair access to gambling-generated funds and will take action over any attempts to capture funding flows that are detected.

“We are very pleased that our investigation has led to Mr Gibbons being held accountable for fraud, and for defrauding his community. A clear message to the gambling sector is this: where we come across deliberate and wilful attempts to take community funding we will take strong and decisive action to hold people accountable”.

Media contact:
Trevor Henry, senior communications adviser, Department of Internal Affairs
Ph 04 495 7211; cell 021 245 8642

[ends]

Read it at the Department of Internal Affairs website
Other DIA News, Press Releases & Consultation (Link)

Posted by Elizabeth Kerr

23 Comments

Filed under Business, Economics, Media, Name, ORFU, People, Politics, Project management, Sport, Stadiums

23 responses to “DIA media release

  1. anonymous

    ‘Paying off loans is a commercial and illegal use of funding generated from pokie machines.’

    What did the ORFU misappropriate its trust funding on? Wasn’t some of it used to pay off monies owed? Isn’t that the same thing or is there is there a legal loophole they’ve abused?

    Funny old thing how the authorities appear reluctant to seek accountability and the DCC unwilling to question it.

  2. Russell Garbutt

    Seems like the DIA finally acted on a tipoff from the media on some 79 year old, but haven’t yet acted against organised and structured shennanigans by the ORFU. Why is an interesting question. Friends in high places?

    • Elizabeth

      I naively(!) suspect, Russell, it ties to RWC 2011 and how the National-led government didn’t want rumpled buy a professional rugby scandal between Auckland and Otago bruising the lead up to ‘our main event’. No idea why I would think that – just a hunch(!). Nah, would take a much brighter soul than me to explain the DIA hands-off stand.

  3. Hype O'Thermia

    Well perhaps they didn’t use it to pay off debt. Perhaps they used it on dinners and drinks for influential people besides themselves. They weren’t big on paying debts, remember. And some of those entertained courtesy of misdirected pokie money might not appreciate too much attention being paid to that sort of thing. It’s like accepting freebie tickets to matches, and pressies from the Casino, people get a bit sensitive – afterwards.

  4. Anonymous

    They’re pretty thick aren’t they? You accept gifts from questionable organisations during questionable events, just so you can rub shoulders with questionable people, while hoping nobody will uncover those gifts and then feeling a bit sensitive (arrogant National ministers and that Banks guy being exceptions) when the tax or ratepayer get pissy at you.

    Too much backslapping and boozing up on the public dollar and no care for consequences. There should be a law Drunk In Charge of a City to protect citizens against their reckless decisions…

  5. Anonymous

    Maarten Quivooy and DIA must be “high fiving” each other after taking the scalp of a 79 year old for stealing $600k of pokie money but it’s taken them nearly 3 years and they weren’t even the ones that uncovered the scam – it was the media. I bet Mr Gibbons didn’t have the community funds to access corporate lawyers or have political connections that have regular access to Senior DIA Mgt when there is trouble.

    It is pleasing to note however that Mr Quivooy states DIA will take action on such serious matters, so we can now expect and demand he and his Dept conduct a proper and serious investigation, using the extensive powers available to them, into ORFU, TTCF Inc, TTCF Ltd and hold the Trustees/ Directors accountable – just like they did with Noel Gibbons. ORFU, with the complicity of TTCF have fleeced not $600k but approx $6-7 million from community groups in South Auckland in the manner described in this case.

  6. Anonymous

    It’s a win but feels like a soft target in an attempt to appease the media attention. Anonymous’s comment about having access to corporate lawyers and political connections explains why the hard targets – the Stakeholders from here to Queenstown – continue to sit up high and laugh down at us while enjoying their black-tie rorts at the community’s expense. The stadium was a means for a few of the rich to get richer and the vision realised of the public paying for their entertainment centre. The OR F.U. has simply picked up on the attitude and gone along for the ride.

    Where at least are the sausage sizzles to pay for their rugby? They don’t need to raise money with a weak Mayor and enough Stadium Councillors still at the table. That’s the gift the stakeholders have given the professional rugby bludgers.

    It is time for the DIA to do the right thing and take on the bully boys too.

  7. Elizabeth

    ### ODT Online Sat, 2 Jun 2012
    Internal affairs to investigate ORFU, pokies
    By Hamish McNeilly
    The beleaguered Otago Rugby Football Union could be liable to pay back millions in pokie grants if its relationship with three Auckland bars and a gaming trust is proven unlawful.

    MP’s query sees ‘all hell’ break loose
    Determined to clean up gambling industry

    New Zealand Rugby Union (NZRU) representatives will meet Department of Internal Affairs (DIA) officials to hand over the file concerning the union’s involvement with pokies.
    Read more

    Interesting… (our italics)

    Dunedin City Council governance manager Sandy Graham said the council had co-operated with the New Zealand Rugby Union in its recent investigation of the union, and its involvement with pokies. “The DCC has provided any relevant information it has to the NZRU. DCC has subsequently been informed by the NZRU that it has found nothing to stop the recovery package proceeding. “The NZRU has arranged to meet with the Department of Internal Affairs to hand over its file, which the DCC supports…”

  8. Anonymous

    I believe I did mention that the Murray Acklin line needed to be investigated further…

  9. Russell Garbutt

    Hamish’s article deserves more answers than it has received so far. One of the issues that needs further exploration is the fact that the DIA concentrates on the distributor of the funds while the consumer of the funds is rarely looked at. It is also clear and apparent that if a user has an invoice as well as a grant and the two “line up” then nobody looks any further.

    There is clear evidence however that consumers use a variety of techniques to overcome this annoying bookwork, such as retrospective invoices, manufactured invoices, and worst of all complete collusion and pre-arrangement of how pokie money is to be divvied up between the parties. The ORFU have been shown to be heavily involved in the pokie fund industry, and yet to be explored or revealed are the ways in which other entities are set up and used as channels for pokie money. In the days to come I think it will become clearer who the identities of some of these people are and some might come as a surprise. Others are well known for their activities.

    Watch this space.

  10. Hype O'Thermia

    “The beleaguered Otago Rugby Football Union could be liable to pay back millions in pokie grants…” – does this translate to “DCC takes out even more loans” and “Rates rise kept to 18%”?
    “Stakeholder-owned travel company arranges cheap organ donation for cash trips for Otago ratepayers” whereupon Otago leaps up the list of provinces’ overseas earnings. Doesn’t that then mean we could borrow even more?
    For every challenge there’s an opportunity. Naysayers should remember this.

  11. ormk

    Can the DCC still call in all the ORFU debts? I think many of us were worried there would be further liabilities and here they are appearing. The union may have 140 years history but the scoundrels that have been running it have put it to shame. This just hammers home why the DCC should not be involved with ORFU.

    • Elizabeth

      I do hope NZRU aren’t acting holier than though, using their Tew thuggishness to influence DIA; or that the government won’t further interfere with or hamper DIA’s ability to do its investigation.

      And that DIA won’t fall by the wayside due to some dumb application and interpretation of the Gambling Act – in the past the statute of limitations has been boldly but erroneously cited by DIA as a reason to stop or limit investigation.

      What we see here is the gradual exposure of organised (white collar) crime by the home town boys and their wider ‘industry’ mates.

      The sums of money involved for ORFU far surpass, as Anonymous has already mentioned, the peanuts Mongrel Mob rorted Whanau ora for.

      Investigating TTCF is one thing, more chickens in the yard.

      Although I’ve used the word ‘crime’ here, I will clarify as others have done that DIA has considerable powers under the Act to clean up illicit activities and cease gambling operations. The cost to parties caught up in that process can be crippling, IF no blind eyes are turned. No doubt Martin Legge has seen it all. Whether there is anything that gets passed to NZ Police or SFO will be interesting.

      To Martin and Liz Legge, we’re very lucky you swung into the picture when you did, and with what skills, experience, persistence and diligence since to inform the system as well as the media and the general public. You have our full admiration and respect.

      Thanks to everyone who has assisted thus far.

      We note ODT managed to sink Hamish McNeilly’s three excellent connecting stories to page 32 of today’s print edition, general news – opposite Diversions. Extraordinary. The online placement fares substantially better.

  12. Amanda

    And we have Mayor Cull to thank for tying the city’s economic future to the fortunes of the fiscally challenged Corporate Rugby Bludgers. Thanks so very much Mayor Cull. Thanks so much for that. Keep on attacking Vandervis, if it makes you feel better. Remember, local body elections are next year.

    • Elizabeth

      Oh dear, I notice ODT Online has moved Hamish McNeilly’s interconnecting DIA/ORFU/TTCF/Dunne stories off the home page (headlined at Inside Today this morning) – you can find them at ‘Dunedin’ news via this link:

      http://www.odt.co.nz/news/dunedin/211669/internal-affairs-investigate-orfu-pokies

      Sink the professional rugby scandal… watch the positioning as events unfold. McNeilly has tweeted @whatifdunedin saying there’s more to come following official information requests.

      Watch for tomorrow’s Sunday Star Times. More from Steve Kilgallon.

      Department of Internal Affairs (DIA) is in the hot seat.

  13. Anonymous

    There should be no reason left for the Dunedin City Council to continue supporting the ORFU. There should now be enough public information to ascertain the DCC does not enter into any understanding or agreement with it. Mayor Dave Cull is at serious risk of compromising himself through that association.

    The unfolding truths will be uncomfortable for the Otago Daily Times too. As a consequence of their position on rugby and the stadium in this city, it has a firm grasp on their old boys too.

    It is coming unstuck for them all.

  14. Anonymous

    This is what the DIA stated about its own public role and in particular, in relation to TTCF in May 2010-

    …..” The Secretary has a clear and statutory duty to exercise care and due diligence when contemplating the grounds in section 52 of the Gambling Act (the grounds/criteria under which DIA may be permitted in issuing a gambling licence to a pokie trust or a pokie venue). It would be inappropriate for the Secretary not to exercise his powers with the utmost care and due diligence as the outcome would more likely be that a licence is issued unlawfully ”

    The fact is, a gambling licence issued by DIA is only valid for 1 year after which DIA must again exercise its statutory duty and care in consideration of a renewal. The “highest standards of proof” and “statute of limitations” are simply a red herring DIA are spinning the good people of Otago as an excuse for doing nothing!

    TTCF Inc was disestablished on 5 March 2012 as they transferred their business and assets to a new model that would enable them to continue giving huge sums to racing and sport, under the watchful eye and blessing of the DIA. They licensed the same blokes and associated parties into a new entity called The Trusts Community Foundation (TTCF Ltd).

    TTCF Ltd (the new entity) then gave over a further $800k to ORFU while still continuing to be aware of the ownership arrangements between ORFU and the Jokers group of bars from South Auckland, all under DIA’s nose.

    TTCF Ltd were licensed on June 2010 and are therefore up for a licence renewal in a matter of days. Will DIA risk issuing a licence unlawfully knowing what they have known since October 2010 ????

    • Elizabeth

      Love the last sentence.

      • Elizabeth

        In today’s SST, a supplement from The Lion Foundation, Community Grants April 2011 – April 2012.

        Page 9
        Otago Rugby Football Union Inc $20,000
        Harbour Rugby Football Club $4,000
        Kaikourai Rugby Football Club $10,000
        Pirates Football Club Inc $2,530 [rugby]
        Taieri District Pony Club $8,000 [not rugby – watch this space]
        Taieri Rugby Football Club Inc $6,000

  15. Hype O'Thermia

    Charities…… Pokies suck money out of (mainly) the poorest suburbs but that’s OK because they give back so much support to the community. It was always a self-serving load of shite even if the money had been going to daycare, clinics for kids with chronic ear infections, parenting courses, budget advisors, etc. After all there was always profit skimmed off for the operators of the pokie machines, it’s not the same as leaving ALL the money in the pockets of the people in those communities to spend on their own facilities.
    But now it has been revealed as a complete sham, rort, exploitation of the poor by the well-to-do for the most unnecessary purposes. Lowlife thieving scum in suits.

  16. Phil

    Quite right. It’s still a negative flow of money from those areas of our society who are the most vulnerable. Preying on desperation. No-one ends up better off, except for those owning the machines.

  17. Anonymous

    Yes and in the face of all these rorts the big trusts, Lion Foundation and Pub Charity are rallying support – encouraging their favoured grant applicants to make submissions to Govt on the new pokie bill which if passed intends doing away with all pokie trusts (and their rorts) within 12 months.

    When Francis Weavers, the ex CEO of the Community Gaming Association (CGA), an organisation set up by and for the benefit of Pokie Trusts, submits an official report to the Govt claiming endemic non compliance and corruption within the industry you have got to wonder just how bad it has all become and wonder why this Govt has not shown more leadership with DIA and the industry.

    Seriously, this has now grown into a serious law and order issue involving “white collar” criminals – something this Govt said it was tough on.

  18. Russell Garbutt

    Time for some more connections to be made by Hamish McNeilly as to the goings on of the ORFU. For a starter, it would be really advantageous to look closely at a strange little outfit called the Centre of Excellence in Amateur Sport. Now wound up after a bit of attention was paid to it, some interesting questions Mr McNeilly could ask of say, John Spicer and Ron Palenski for starters and then they could always go to Kereyn Smith who was a fellow Director, could include – just why was this little company employing people solely working for the ORFU? Did they apply for pokie funds from TTCF? What were those funds used for? Just why did Martin Legge point out that the Centre of Excellence was nothing other than a front for the ORFU? Why was TTCF told to just hide any applications from the Centre of Excellence? Whose name was on those applications? Did this person making these applications for the Centre actually work for the ORFU at the time? Has this person refused to discuss these matters with anyone? Is he now working for the City?

    Some other questions that the erstwhile Mr McNeilly could ask Maarten Quivooy of DIA could include – is he confident that the staff of DIA conducted a professional and rigorous examination of the Centre of Excellence, the ORFU and TTCF in, and from 2008? Does Mr Quivooy concur with his staff’s comments that the whole setup with these 3 entities “was quite smelly”? Does Mr Quivooy also concur with his staff’s comments that the ORFU and the Centre of Excellence got away with diddling the public?

    Finally, would Mr McNeilly care to write a further article on just how the whole deal actually worked including naming those people at the centre of this rort? Would the ODT be game enough to publish?

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