Operation Chestnut: DIA, SFO fluffing round the edges #TTCF #ORFU

“Operation Chestnut has been a significant investigation in the Class 4 sector and we’ve welcomed the opportunity to work in partnership with the SFO and OFCANZ.” –Maarten Quivooy, DIA

### NZ Herald Online 12:00 PM Monday Feb 2, 2015
Four in court charged with $30m pokie fraud
By Hamish Fletcher – Business reporter
A former chairman of Harness Racing New Zealand and three other people have been charged over an alleged $30 million pokie fraud. It is the biggest criminal case ever of its kind involving pokies outside of a casino. Four defendants have appeared in the Wellington District Court today over the alleged manipulation of grants which come from pokie machines, a Department of Internal Affairs spokeswoman said this morning. The defendants, charged by the Serious Fraud Office with obtaining by deception, are former HRNZ chairman Patrick O’Brien, his son Michael O’Brien, Paul Anthony Max and another person with interim name suppression. The alleged offending was uncovered during an investigation called Operation Chestnut which involved the DIA, SFO and the Organised and Financial Crime Agency of New Zealand.
Read more

*The name of the fourth defendant is known to What if? -Eds.

Related Posts and Comments:
22.1.15 ORFU chairman quits —no thanks to DCC for all its help *sniff
31.12.13 Martin Legge: Operation Chestnut [DIA’s PR exercise]

█ For more, enter the terms *operation chestnut*, *pokies*, *legge*, *whistleblower*, *rorts*, *dia*, *sfo*, *ttcf*, *gambling*, *orfu*, *rugby*, *jokers* and *racing* in the search box at right.

Posted by Elizabeth Kerr

13 Comments

Filed under Business, DCC, DCHL, Delta, DIA, DVML, Geography, Highlanders, Media, Name, New Zealand, NZRU, ORFU, People, Police, Politics, Project management, Property, SFO, Sport, What stadium

13 responses to “Operation Chestnut: DIA, SFO fluffing round the edges #TTCF #ORFU

  1. Russell Garbutt

    We know just how pathetic all enquiries have been into the rorts of gambling money going to organisations that should not have received them. The DIA and all subsequent investigations fulfill not a lot more than face-saving by a few really pathetic people more interested in covering up their own inadequacies than anything else.

  2. Martin Legge

    It’s incredible how the DIA and SFO have confined such a large investigation, initially reported to go back as far as 2006 and involving up to 5 pokie trusts, and yet now all we see is that just four men have been charged for activities in respect of The Bluegrass Trust, set up by them in late 2009.

    The DIA had serious concerns about issuing a licence to this trust and they had been well warned of the consequences and spent considerable time delaying the issue of a licence to Bluegrass. I was reliably informed that contact with the DIA and Racing Minister facilitated the speedy issuing of the licence. This raises serious questions as to how under these circumstances and the current gambling law DIA were satisfied enough to issue that licence, particularly when that decision has now resulted in an expensive operation and the inevitable loss of $30 million dollars of community funding.

    And what has happened to all the other large trusts that these men were involved with? Do they expect us to believe a 2-year investigation involving surveillance, phone taps and search warrants turned up just this or has it been deliberately contained to prevent the public seeing just how widespread this type of activity is with other groups and not just racing interests.

    You see Pokie bar owners, particularly those with multiple bars are very influential over pokie trusts whose management are constantly breaking the law to grow their “charitable business” by agreeing to the most common condition – to allow the bar owners influence over who will receive grants and for how much. To avoid scrutiny and prevent commercially jealous bars spilling the beans to DIA, the bar owners spread their bars across a number of pokie trusts and it keeps everyone happy. Irrespective of what the bar owner tries to get away with, the ultimate responsibility for complying with law falls back to the key persons within pokie trusts, they are the self-appointed gatekeepers of community funds and yet, as seen in so many cases reported in the media, rarely do we see the DIA going head to head with these old established and highly litigous trusts and their connected officials.

    Obtaining pokie money by deception and deceiving the DIA did not start and finish with the 4 men charged or their Bluegrass Trust. My experience has taught me that witnesses, whistleblowers and other good people have no place in the pokie industry because the interests of the sector are just too powerful to be messed with or stake your reputation on trying to clean it up.

    I was recently contacted by someone who was involved in “Operation Chestnut” and they said they and others were uneasy as to why other persons were not charged. The revelations only support my dealings with the DIA and SFO and why TTCF and ORFU were not investigated as part of Operation Chestnut for similar unlawful activity over a very long period of time. The DIA first lost the evidence, then ignored it and now choose to suppress it !!

    My view is that the DIA exist not to protect the community but a corrupt and lucrative industry !!!

    • Elizabeth

      Indeed, Martin.
      DIA’s business sponsors and ministerial fatcats are probably in need of a mechanic to disappear. Did I say that.

    • Anon in Auckland

      But how about the Trusts in Auckland, where the bars are owned by the Licensing Trusts. The bars are essentially owned by the politicians. There friend is in charge of TTCF. And the politicians and their colleagues also control key Charitable Trusts. Auckland Council’s in on it. Who also procure to the charities loaded with politicians which have few to no outcomes, dodgy contracts, and in one case $10 million dollars that appears to have been given to a charity despite the fact the charity wasn’t running or paying for the project – council was. Council unable to explain. The key trustee being head of a political party. Local Government, Pokies, Liquor, Charities, Politicians. Yes. I’ve blown the whistle with the Auditor and internally with Council. Auditor was useless. Council does have some concerned staff who can see what is going on but like you say the interests are too powerful. The cost to West Auckland is devastating. It’s not democracy that’s for sure.

      • Elizabeth

        Anon, thanks for this. Have you read other of Martin Legge’s comments/posts at What if? To do so, enter Legge in the search box at right to pull up more, including links to the Sunday Star-Times articles on TTCF that ran in 2011, 2012 and 2013 – read Steve Kilgallon (SST).

        Fact: Ross Clow is an Auckland City Councillor.

        • Anon

          Hi I just wanted to add the following. The charitable trusts delivering council projects in “partnership” with Council with elected members as trustees have serious issues. Olympic Park Trust -struck off, unusual accounts unaudited, and accounts done by trustee, not independent – struck off and unclear where the funds went, asset sheet? Lopdell Trust, again each year the accounts get less detailed. from normal accounts, to the most recent being unaudited draft accounts, with no name of accountancy firm, no financial notes, related party transactions or asset list etc. Lopdell Trust is not on the council’s awarded contracts list of contracts awarded over $100k. Total income 2014 $9 million total expenditrue $35k. Work in progress unknown.

        • Elizabeth

          Oh hey. Sympathies, Anon.
          The charitable trust issue hits us right between the eyes too, at Dunedin. Together with an appalling lack of financial reporting, from the beginning and to this day as the CARISBROOK STADIUM CHARITABLE TRUST continues to operate (why?).

          The extreme rort of public funds to build the RUGBY Stadium at Dunedin.
          Circa 53,000 ratepayers ONLY footing the bill. (although ratepayers have probably declined in number!)

  3. Elizabeth

    Grant money [to racing clubs] failed to compensate for earnings lost since casinos were set up and pokie machines allowed. –Patrick O’Brien

    ### NZ Herald Online 5:00 AM Tuesday Feb 3, 2015
    Ex Harness Racing boss accused of $30m pokie fraud speaks out
    By David Fisher – senior reporter
    Former Harness Racing NZ chairman Pat O’Brien, 82, told the Herald he set up the pokies trust [Blue Grass Trust] at the centre of the allegations to get cash for race stakes and other purposes after funding dried up.
    Politicians speaking on the issue “frightened trusts off making grants to clubs”. “So I thought, after talking to a solicitor in Auckland, set up a trust for a pure, only purpose to derive funds for racing which was a legitimate purpose. [Gambling regulator Department of Internal Affairs] never liked it from the word go.”
    Read more

  4. Martin Legge

    Good to see The Herald’s David Fisher attempting to influence public opinion before a criminal trial. It’s also good to see old man Patrick O’Brien state that the DIA did not like the set up of Bluegrass Trust, a statement which tends to support what I was told – there was political influence to issue the licence.

    Gambling Law places a clear statutory civil duty on the DIA, it must investigate and fully satisfy itself before issuing any gambling licence. The statute exists to protect community and not the interests of the industry.

    Here we are, six years on and the community have not only lost $30 million but are now footing the bill for “Operation Chestnut” and the massive trial to follow, it’s a fiasco that should have been stopped at the gate had DIA done what the law intended!!

  5. Elizabeth

    Glory be, the Pike River runner Martin Quivooy raises his head again like he might be useful. Nah.

    ### NZ Herald Online 5:30 AM Friday Jan 22, 2016
    Charges laid over misuse of pokie machine grants
    Seven people and two organisations are being prosecuted for misusing grants money from pokie machines. The accused faced a total of 26 charges after what the Department of Internal Affairs called a two-year investigation. The defendants appeared in Manukau District Court today and were all given name suppression, the department said.

    “…The misappropriation of funds is a serious offence and in effect is a crime against the community because grant funding is taken away from its intended community purpose,” said Maarten Quivooy, general manager for regulatory services. The intent of the Gambling Act is to make sure that the money from gambling benefits the community. It is important that the money that is distributed in the community as grants is used for the purpose for which the grant was made.”

    Internal Affairs said the next hearing was scheduled for February 17.
    NZH Link

  6. Calvin Oaten

    Righteous dude Quivooy had no qualms over covering the “crime against the community” by the ORFU and its ‘Three Jokers Bars in Auckland. That community was fleeced for the benefit of the Otago rugby mafia.

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