1 00:00:05,320 --> 00:00:05,720 Speaker 1: Kilda. 2 00:00:05,800 --> 00:00:09,360 Speaker 2: I'm Chelsea Daniels and This is the Front Page, a 3 00:00:09,480 --> 00:00:17,479 Speaker 2: daily podcast presented by the New Zealand Herald. For the 4 00:00:17,520 --> 00:00:21,280 Speaker 2: last few years, our headlines have been dominated by talk 5 00:00:21,400 --> 00:00:26,320 Speaker 2: of ram raids, robberies and gang members misbehaving. Those stories 6 00:00:26,360 --> 00:00:29,600 Speaker 2: have fared through to politics, with the governments making a 7 00:00:29,680 --> 00:00:33,519 Speaker 2: big deal about tackling gangs and cracking down on crime. 8 00:00:34,040 --> 00:00:37,000 Speaker 2: But while these crimes might make for a great photo 9 00:00:37,120 --> 00:00:41,240 Speaker 2: and deliver political sound bites, little is ever said about 10 00:00:41,240 --> 00:00:46,760 Speaker 2: the extent of white collar crimes like fraud and zed. 11 00:00:46,840 --> 00:00:51,640 Speaker 2: Herald investigative journalist Matt Knippett has been reporting on fraud 12 00:00:51,720 --> 00:00:55,000 Speaker 2: and corruption for much of his career. He joins us 13 00:00:55,040 --> 00:00:57,640 Speaker 2: now on the Front Page to discuss the extent of 14 00:00:57,680 --> 00:01:01,840 Speaker 2: it in New Zealand and peticians should pay more attention 15 00:01:01,960 --> 00:01:09,200 Speaker 2: to it. Matt, what are some of the biggest fraud 16 00:01:09,319 --> 00:01:11,960 Speaker 2: cases you've investigated over your career? 17 00:01:12,200 --> 00:01:14,160 Speaker 1: Well, I guess there's a couple of one hundred million 18 00:01:14,200 --> 00:01:16,640 Speaker 1: dollar plus ones. The Beggest was actually the first that 19 00:01:16,680 --> 00:01:18,640 Speaker 1: occurred in my Actually the first week I was a 20 00:01:18,640 --> 00:01:22,679 Speaker 1: business journalist covering the collapse of South Canterbury Finance, where 21 00:01:22,680 --> 00:01:25,560 Speaker 1: it turned out there were some sheneigans on their ballit 22 00:01:25,600 --> 00:01:28,120 Speaker 1: sheet hiding related party loans that you know, if the 23 00:01:28,120 --> 00:01:30,960 Speaker 1: government had known about it, they might not have guaranteed them. 24 00:01:31,160 --> 00:01:33,360 Speaker 1: And that company went under and triggered a one point 25 00:01:33,400 --> 00:01:38,080 Speaker 1: five billion dollar payer. Another particularly large one they covered 26 00:01:38,200 --> 00:01:41,399 Speaker 1: was there was a Clashtreage based an investment banker called 27 00:01:41,480 --> 00:01:46,120 Speaker 1: Kelly Tonkin. He ran an investment firm called Penrich. He 28 00:01:46,240 --> 00:01:48,200 Speaker 1: was said to be doing amazing things with currenty in 29 00:01:48,280 --> 00:01:50,720 Speaker 1: the Cayman Islands, but it turned out to be a 30 00:01:50,720 --> 00:01:53,560 Speaker 1: Ponzi scheme that left a whole bunch of retchless to 31 00:01:53,560 --> 00:01:57,080 Speaker 1: investors more than one hundred million down. Then there's another 32 00:01:57,160 --> 00:01:59,960 Speaker 1: handful that are a sort of fifty million dollar range. 33 00:02:00,280 --> 00:02:02,160 Speaker 1: I've had my finger on most of the big ones 34 00:02:02,160 --> 00:02:03,080 Speaker 1: over the last decade. 35 00:02:03,280 --> 00:02:07,080 Speaker 2: I reckon when it comes to financial cost and victims. 36 00:02:07,160 --> 00:02:11,880 Speaker 2: Does fraud compare with more violent direct crime like burglary 37 00:02:12,000 --> 00:02:12,600 Speaker 2: or assault? 38 00:02:13,120 --> 00:02:15,240 Speaker 1: Well, I mean, how do you work out what an 39 00:02:15,280 --> 00:02:18,320 Speaker 1: assault victim has lost? I mean, often it's not money, 40 00:02:18,520 --> 00:02:21,600 Speaker 1: and most file assaults are sort of occur late at 41 00:02:21,639 --> 00:02:23,440 Speaker 1: night when the parties are drunk, and usually it's not 42 00:02:23,480 --> 00:02:25,919 Speaker 1: over cash. A good point of comparison is one people 43 00:02:26,040 --> 00:02:29,200 Speaker 1: most think of financial crime, they think of bank robberies. Right, 44 00:02:29,520 --> 00:02:32,480 Speaker 1: the largest bank robbery in New Zealant history didn't even 45 00:02:32,480 --> 00:02:35,480 Speaker 1: get a million dollars, and it was twenty five years ago. 46 00:02:35,919 --> 00:02:37,440 Speaker 1: If you want to look at sort of the crimes 47 00:02:37,480 --> 00:02:40,480 Speaker 1: that sort of cost and dollar teams more, you're much 48 00:02:40,520 --> 00:02:44,560 Speaker 1: better looking at your investment hucksters and scammers. Who are 49 00:02:44,600 --> 00:02:46,880 Speaker 1: you know, even some of the smaller operators are pulling 50 00:02:46,960 --> 00:02:49,440 Speaker 1: in world more than a million. As I mentioned, you 51 00:02:49,480 --> 00:02:51,600 Speaker 1: know some even manusct up to nine figures. 52 00:02:51,919 --> 00:02:54,680 Speaker 2: When it comes to investigating fraud, I guess it's real 53 00:02:54,840 --> 00:03:00,560 Speaker 2: intricate because generally people who are committing financial fraud they 54 00:03:00,560 --> 00:03:03,400 Speaker 2: don't make it too easy for authorities to find out 55 00:03:03,440 --> 00:03:06,240 Speaker 2: what they're doing. So I bet you've printed out reams 56 00:03:06,240 --> 00:03:07,480 Speaker 2: of paper in your career. 57 00:03:08,840 --> 00:03:12,480 Speaker 1: Paperwork is often are the modus operandi. The thing about 58 00:03:12,520 --> 00:03:16,120 Speaker 1: financial crime is often at crime of consent, guns aren't 59 00:03:16,160 --> 00:03:19,400 Speaker 1: being drawn and people handing over their wallets or emptying 60 00:03:19,440 --> 00:03:23,040 Speaker 1: their purses. These crimes are committed by people who convince 61 00:03:23,080 --> 00:03:25,840 Speaker 1: them to hand it over, usually for an invalid or 62 00:03:25,919 --> 00:03:28,720 Speaker 1: untruthful reason. You know, they say they'll invested somewhere would 63 00:03:28,720 --> 00:03:31,119 Speaker 1: in fact it's just going to pay off the other 64 00:03:31,280 --> 00:03:34,000 Speaker 1: investors that want to get out it's upon this scheme, 65 00:03:34,200 --> 00:03:37,040 Speaker 1: or it's just being tally most appropriated. So that level 66 00:03:37,160 --> 00:03:40,760 Speaker 1: of trust, I mean, this is why they call convent 67 00:03:40,800 --> 00:03:44,120 Speaker 1: because they're confidence men. I haven't yet met at Fordster 68 00:03:44,120 --> 00:03:46,560 Speaker 1: who wasn't charismatic. I mean, you've got to be good 69 00:03:46,600 --> 00:03:50,240 Speaker 1: to convince people hand over the hard and pass. Then 70 00:03:50,280 --> 00:03:53,120 Speaker 1: of course that does complicate things because often people don't 71 00:03:53,160 --> 00:03:56,480 Speaker 1: want to acknowledge they've been tricked and lost money. Certainly 72 00:03:56,520 --> 00:03:58,600 Speaker 1: they don't want anyone else to know that they've been 73 00:03:58,760 --> 00:04:01,480 Speaker 1: foolish or taken in. There's a certain amount of shame. 74 00:04:03,280 --> 00:04:06,040 Speaker 3: Nationally, there'll be hundreds of cases a day being reported 75 00:04:06,080 --> 00:04:09,119 Speaker 3: to police, and we know that not all thought has reported, 76 00:04:09,920 --> 00:04:11,840 Speaker 3: so the scale of it is truly massive. 77 00:04:12,000 --> 00:04:14,400 Speaker 1: I never thought it never happened to me. I was 78 00:04:14,440 --> 00:04:17,760 Speaker 1: pretty upset. I didn't know which way to turn. That 79 00:04:17,839 --> 00:04:20,240 Speaker 1: money saved up with my grand order and the son 80 00:04:20,320 --> 00:04:21,880 Speaker 1: and his wife. 81 00:04:21,960 --> 00:04:24,760 Speaker 3: So how much money did you lose in this? 82 00:04:25,400 --> 00:04:32,320 Speaker 1: For and dearly there are commercial consequences, you know, if 83 00:04:32,320 --> 00:04:35,240 Speaker 1: your bank realizes that, you know you've lost a million 84 00:04:35,279 --> 00:04:38,320 Speaker 1: dollars of your businesses money they might want to take 85 00:04:38,320 --> 00:04:40,240 Speaker 1: a closer look at your finances to make sure you 86 00:04:40,279 --> 00:04:43,000 Speaker 1: can replace. There's lots of seven centers not to report 87 00:04:43,000 --> 00:04:45,440 Speaker 1: the sort of crime, which is the first big hurdle. 88 00:04:45,880 --> 00:04:49,119 Speaker 1: The second book hurdle we often come across is money 89 00:04:49,120 --> 00:04:51,000 Speaker 1: that goes offshore, and you know, we live in a 90 00:04:51,000 --> 00:04:54,520 Speaker 1: globalized world. People can set up bank accounts overseas. There 91 00:04:54,520 --> 00:04:57,039 Speaker 1: are supposed to be sort of anti money laundering checks 92 00:04:57,040 --> 00:05:00,600 Speaker 1: in place to ensure that valanci institutions know who are 93 00:05:01,160 --> 00:05:04,320 Speaker 1: setting up accounts for their institutions and where it's being 94 00:05:04,320 --> 00:05:09,039 Speaker 1: transferred to. But once money goes offshore, and it's extraordinarily 95 00:05:09,040 --> 00:05:12,480 Speaker 1: difficult to track, let alone recover. Once people realize that's 96 00:05:12,480 --> 00:05:15,479 Speaker 1: happened to them, often they can't see any prospect of 97 00:05:15,520 --> 00:05:18,279 Speaker 1: getting their money back. So why would you go through 98 00:05:18,640 --> 00:05:22,799 Speaker 1: all the pain that torment of a criminal investigation which 99 00:05:23,080 --> 00:05:25,279 Speaker 1: in all likelihood probably won't even get to trial, and 100 00:05:25,320 --> 00:05:27,560 Speaker 1: even if it does, it's going to drag out for years. 101 00:05:27,600 --> 00:05:29,200 Speaker 1: A lot of people just want to cut their losses, 102 00:05:29,400 --> 00:05:31,800 Speaker 1: and the losses are indeed quite substantial and sort of 103 00:05:32,440 --> 00:05:33,440 Speaker 1: international level. 104 00:05:33,680 --> 00:05:36,320 Speaker 2: When we talk about fraud in New Zealand, how many 105 00:05:36,320 --> 00:05:38,680 Speaker 2: millions of dollars are kiwis losing each year. 106 00:05:38,880 --> 00:05:41,760 Speaker 1: It's sort of a very fungible term fraud. I mean, 107 00:05:42,040 --> 00:05:43,520 Speaker 1: if we sort of look at the sort of the 108 00:05:43,520 --> 00:05:45,680 Speaker 1: economic costs of crime might be a good way to 109 00:05:45,720 --> 00:05:47,800 Speaker 1: look at it. There were some studies that maybe it 110 00:05:47,839 --> 00:05:50,720 Speaker 1: was about ten billion a year. However, it's worth noting 111 00:05:50,760 --> 00:05:53,880 Speaker 1: that the vast majority of that, probably seven or eight billion, 112 00:05:54,520 --> 00:05:57,920 Speaker 1: is just text to avoidance people not paying the tax 113 00:05:58,120 --> 00:06:02,039 Speaker 1: they're required to, either just not paying it and you know, 114 00:06:02,040 --> 00:06:04,320 Speaker 1: when the bills come due, or sort of massaging their 115 00:06:04,360 --> 00:06:06,320 Speaker 1: accounts to make a look as though they don't need 116 00:06:06,360 --> 00:06:09,240 Speaker 1: to pay as much. IOD does have a fairly big 117 00:06:09,360 --> 00:06:13,320 Speaker 1: investigations unit, and they humanly do about They poss get 118 00:06:13,360 --> 00:06:15,320 Speaker 1: about a billion dollars of that a year, so there 119 00:06:15,320 --> 00:06:17,799 Speaker 1: have been some researchers that's the amount that's missed us 120 00:06:17,839 --> 00:06:20,560 Speaker 1: considerably more, and we break it further down. I know 121 00:06:20,640 --> 00:06:22,640 Speaker 1: it's a lot in the news at the moment sort 122 00:06:22,640 --> 00:06:25,720 Speaker 1: of ram raids and retail crime that industry lobby reckons 123 00:06:25,720 --> 00:06:28,200 Speaker 1: that's about two and a half billion a year. So yes, 124 00:06:28,279 --> 00:06:30,479 Speaker 1: a very big number, but still you're looking at only 125 00:06:30,480 --> 00:06:33,120 Speaker 1: a third the amount of text that's going with thing 126 00:06:33,760 --> 00:06:36,160 Speaker 1: and then going way further down, you know, they're sort 127 00:06:36,160 --> 00:06:38,640 Speaker 1: of the scams and frauds are probably in the three 128 00:06:38,680 --> 00:06:41,080 Speaker 1: to four hundred million dollar range, but that number can 129 00:06:41,120 --> 00:06:44,640 Speaker 1: bounce around a lot. As I mentioned before, individual cases 130 00:06:44,680 --> 00:06:47,599 Speaker 1: can run to one hundred million, which can really skew 131 00:06:47,640 --> 00:06:50,400 Speaker 1: each year's figures. And finally, something that does get a 132 00:06:50,400 --> 00:06:53,680 Speaker 1: fair bit of coverage, but it's worth mentioning purely because 133 00:06:53,680 --> 00:06:57,200 Speaker 1: it's so meniscule, is a welfare fraud which you know, 134 00:06:57,279 --> 00:07:00,280 Speaker 1: only about two or three million dollars a year that 135 00:07:00,279 --> 00:07:04,400 Speaker 1: has prosecuted each year. It's a comparative pittance and you know, 136 00:07:04,720 --> 00:07:08,640 Speaker 1: in some total, just a fraction of one of the 137 00:07:08,760 --> 00:07:11,040 Speaker 1: sort of pondee type schemes that might get uncovered in 138 00:07:11,040 --> 00:07:11,360 Speaker 1: a year. 139 00:07:11,840 --> 00:07:15,080 Speaker 2: When we talk about fraud these days, online scams are 140 00:07:15,120 --> 00:07:18,720 Speaker 2: probably where most people's minds go, right. The latest New 141 00:07:18,800 --> 00:07:22,320 Speaker 2: Zealand Crime and Victim survey said that one in ten 142 00:07:22,440 --> 00:07:25,680 Speaker 2: kiw's experienced some level of fraud in the last year, 143 00:07:26,200 --> 00:07:31,200 Speaker 2: double the last period. How sophisticated have these scams become? 144 00:07:31,560 --> 00:07:33,640 Speaker 1: Yeah, this is what I've noticed this myself over the 145 00:07:33,720 --> 00:07:35,800 Speaker 1: last couple of years. You just draw a line between 146 00:07:35,840 --> 00:07:38,040 Speaker 1: the sort of work I normally do at the higher 147 00:07:38,120 --> 00:07:40,920 Speaker 1: end of the pondee is very sort of a narrow 148 00:07:41,000 --> 00:07:43,800 Speaker 1: and sort of deep fraud where a small group of 149 00:07:43,880 --> 00:07:47,000 Speaker 1: victims will get worked over over a number of years 150 00:07:47,040 --> 00:07:50,960 Speaker 1: by an individual, and often the sums involved could be 151 00:07:50,960 --> 00:07:53,480 Speaker 1: really large. What was common five years ago, and I'll 152 00:07:53,480 --> 00:07:56,000 Speaker 1: talk about how has evolved, is that there's also another 153 00:07:56,000 --> 00:07:59,400 Speaker 1: type of operator, usually operating internationally. They're just as a 154 00:07:59,520 --> 00:08:02,400 Speaker 1: very shallow and broad approach. You know, they will spam 155 00:08:02,560 --> 00:08:06,000 Speaker 1: every phone number they can find, every email address they 156 00:08:06,000 --> 00:08:08,800 Speaker 1: can find, and we're trying to get you to pay 157 00:08:09,280 --> 00:08:11,800 Speaker 1: your toll road bill or your parking ticket they claim 158 00:08:11,880 --> 00:08:14,000 Speaker 1: is overdrawn, but in fact the money is going to 159 00:08:14,000 --> 00:08:18,000 Speaker 1: their accounts. I have noticed that that approach has adapted. 160 00:08:18,240 --> 00:08:21,400 Speaker 1: One of the most insidious ones I've seen is scammers 161 00:08:21,600 --> 00:08:25,520 Speaker 1: setting up websites and buying Google ads. So if you 162 00:08:25,720 --> 00:08:28,800 Speaker 1: people are gurgling where's the best place to invest my money, 163 00:08:29,040 --> 00:08:31,760 Speaker 1: they'll have their site comes up, which again doesn't like 164 00:08:31,800 --> 00:08:34,440 Speaker 1: a scam, and it's just a comparison side of interest rates, 165 00:08:34,880 --> 00:08:36,840 Speaker 1: and it allows you to register your email address and 166 00:08:36,880 --> 00:08:40,240 Speaker 1: phone number. If you're interested in talking about your options 167 00:08:40,240 --> 00:08:43,079 Speaker 1: with a financial advisor, and of course you'll soon receive 168 00:08:43,120 --> 00:08:45,079 Speaker 1: a call, but it won't be a financial advisor. It 169 00:08:45,080 --> 00:08:46,960 Speaker 1: will be a scammer. I think I've sprung one of 170 00:08:46,960 --> 00:08:48,600 Speaker 1: these guys along for a couple of months a couple 171 00:08:48,640 --> 00:08:52,040 Speaker 1: of years ago. Extremely well spoken. They're running a professional 172 00:08:52,080 --> 00:08:54,760 Speaker 1: call center and they're recording details and passing them on 173 00:08:54,800 --> 00:08:58,680 Speaker 1: to where it's manning the phones. They've got adopted prospective sys, 174 00:08:58,760 --> 00:09:01,920 Speaker 1: lined up, a whole bunch of official locking forms. You 175 00:09:02,080 --> 00:09:05,280 Speaker 1: fullen and because you haven't been spammed, in fact, you've 176 00:09:05,360 --> 00:09:09,200 Speaker 1: solicited this yourself. People's guards come down and I have 177 00:09:09,320 --> 00:09:12,240 Speaker 1: seen record, and I think the bank's noticing too. People 178 00:09:12,320 --> 00:09:14,240 Speaker 1: have been done out of hundreds of thousands of dollars 179 00:09:14,280 --> 00:09:17,240 Speaker 1: from that sort of approach, and it's quite remarkable. I 180 00:09:17,240 --> 00:09:19,079 Speaker 1: thought there'd be more red flags, but that's sort of 181 00:09:19,120 --> 00:09:21,880 Speaker 1: set up to be honest, and it's very difficult to 182 00:09:21,880 --> 00:09:25,199 Speaker 1: prosecute because although when you're called, your mobile number will 183 00:09:25,200 --> 00:09:27,440 Speaker 1: say it's a local number, perhaps they live in spoofed 184 00:09:27,520 --> 00:09:30,120 Speaker 1: the bank they're claiming to be from, that's all actually 185 00:09:30,200 --> 00:09:32,960 Speaker 1: based offshore. And so the prospect for the New Zealand 186 00:09:33,000 --> 00:09:35,440 Speaker 1: Police or ever the serious thought offers to find out 187 00:09:35,480 --> 00:09:37,400 Speaker 1: who's behind it, let alone and dragged them to New 188 00:09:37,480 --> 00:09:39,800 Speaker 1: Zealand jail. As close to zero. 189 00:09:51,080 --> 00:09:54,120 Speaker 2: Is New Zealand trailing behind in terms of technology and 190 00:09:54,240 --> 00:09:57,200 Speaker 2: education that could stop us falling victim to these kind 191 00:09:57,240 --> 00:09:58,240 Speaker 2: of crimes, Do you reckon? 192 00:09:58,320 --> 00:10:01,640 Speaker 1: I think there's a certain nature to New zeald society. 193 00:10:01,760 --> 00:10:05,760 Speaker 1: We're small. I think we're relatively community focused, and we 194 00:10:06,160 --> 00:10:09,360 Speaker 1: believe each other way too much. We will take sort 195 00:10:09,360 --> 00:10:13,400 Speaker 1: of word of mouth recommendations quite strongly. This leads us 196 00:10:13,440 --> 00:10:16,679 Speaker 1: to be particularly vulnerable to type of fraud called affinity fraud, 197 00:10:16,679 --> 00:10:19,440 Speaker 1: which is often where forster as will target their friends 198 00:10:19,440 --> 00:10:22,240 Speaker 1: and family, or they will recruit people who are then 199 00:10:22,360 --> 00:10:25,120 Speaker 1: drawing their friends and family, and often people's guard goes 200 00:10:25,120 --> 00:10:27,120 Speaker 1: down a bit. Then if your brothers said it's good, 201 00:10:27,120 --> 00:10:28,960 Speaker 1: and he's a lawyer, then I don't need to do 202 00:10:29,000 --> 00:10:31,760 Speaker 1: my own checking. That does leave you quite vulnerable. I'd 203 00:10:31,800 --> 00:10:35,200 Speaker 1: certainly know with the rise and the online investment scams 204 00:10:35,200 --> 00:10:37,800 Speaker 1: that these ones I was talking about where people think 205 00:10:37,800 --> 00:10:39,920 Speaker 1: they're investing money in the bank turned deposit, but actually 206 00:10:39,920 --> 00:10:43,640 Speaker 1: there sending it to dubious agents offshore. There are certain 207 00:10:43,679 --> 00:10:46,360 Speaker 1: steps the banks can take to ensure that when money 208 00:10:46,400 --> 00:10:48,400 Speaker 1: is paid by their clients to a foreign bank account 209 00:10:48,440 --> 00:10:52,360 Speaker 1: that indeed the payer and pay names match. They don't 210 00:10:52,360 --> 00:10:54,560 Speaker 1: do that presently, but it has been rolled out in 211 00:10:54,600 --> 00:10:57,480 Speaker 1: other jurisdictions, and I'm hopeful that New Zealand's banks will 212 00:10:57,520 --> 00:10:59,840 Speaker 1: eventually be able to update their own systems to divide 213 00:10:59,840 --> 00:11:01,760 Speaker 1: her similar extra level of protection. 214 00:11:06,320 --> 00:11:09,600 Speaker 3: Victim advocates say banks should be doing more to protect 215 00:11:09,600 --> 00:11:10,359 Speaker 3: their customers. 216 00:11:10,640 --> 00:11:14,400 Speaker 2: Don't rely on the one fact that just because the 217 00:11:14,400 --> 00:11:16,080 Speaker 2: customer says it makes it right. 218 00:11:16,440 --> 00:11:20,880 Speaker 3: She wants banks to slow the payments down consumer in ZSS. 219 00:11:21,000 --> 00:11:23,480 Speaker 3: Banks around the world are already doing this. 220 00:11:23,880 --> 00:11:27,040 Speaker 1: Yes, New Zealand's banking system is behind. 221 00:11:27,320 --> 00:11:29,559 Speaker 2: Given the pace the New Zealand banking system moves that 222 00:11:29,679 --> 00:11:32,880 Speaker 2: it could be some years before we see this introduced. 223 00:11:33,160 --> 00:11:36,600 Speaker 4: Well, first of all, I've urged them to put in 224 00:11:36,679 --> 00:11:39,839 Speaker 4: place confirmation of pay ye arrangements and the banks have 225 00:11:39,920 --> 00:11:44,040 Speaker 4: committed to them. 226 00:11:44,160 --> 00:11:46,400 Speaker 1: But on the whole it's been interesting in covering the sector. 227 00:11:46,800 --> 00:11:49,000 Speaker 1: It was about ten years ago a whole suite of 228 00:11:49,040 --> 00:11:51,880 Speaker 1: anti money laundering regulations came in which and I'm sure 229 00:11:51,880 --> 00:11:53,520 Speaker 1: people might have run into this when they over the 230 00:11:53,520 --> 00:11:55,720 Speaker 1: bank account. Something you need to prove that you are 231 00:11:55,800 --> 00:11:59,800 Speaker 1: and to bring along passports, best certificates, utility bills and 232 00:12:00,120 --> 00:12:02,120 Speaker 1: some as pain in the ass to be honest. But 233 00:12:02,200 --> 00:12:04,880 Speaker 1: all that was supposed to make it harder for scammers. 234 00:12:05,600 --> 00:12:07,360 Speaker 1: And the harder you make it for scammers, the harder 235 00:12:07,400 --> 00:12:10,319 Speaker 1: you make it for everyday business. So people should perhaps 236 00:12:10,360 --> 00:12:11,920 Speaker 1: be a little bit careful of what they wish for, 237 00:12:12,080 --> 00:12:14,640 Speaker 1: because you know that we're complaints if it's too easy, 238 00:12:14,640 --> 00:12:16,520 Speaker 1: and also complaints if it's too hard. 239 00:12:16,760 --> 00:12:20,640 Speaker 2: You mentioned overseas actors, but what about fraud here in 240 00:12:20,679 --> 00:12:24,720 Speaker 2: New Zealand. How widespread are negative actors in this country? 241 00:12:24,840 --> 00:12:27,000 Speaker 1: Oh? Pretty common. You know, as long as there's an economy, 242 00:12:27,000 --> 00:12:30,000 Speaker 1: there'll be fraud. It is interesting that se like waves 243 00:12:30,080 --> 00:12:35,640 Speaker 1: of fraud emerging usually just following a recession. That's when 244 00:12:35,720 --> 00:12:38,440 Speaker 1: people have asked for their money back. But things get 245 00:12:38,440 --> 00:12:40,960 Speaker 1: a bit tight elsewhere. You know, it's we're further than 246 00:12:41,000 --> 00:12:44,120 Speaker 1: the business traders. Where the tide goes out, you can 247 00:12:44,160 --> 00:12:48,240 Speaker 1: see who's not swimming with togs, and so I suspect 248 00:12:48,280 --> 00:12:50,760 Speaker 1: we will see a lot more of that get exposed 249 00:12:50,760 --> 00:12:53,480 Speaker 1: in the coming years. Look, kiwis have been scamming kiwis 250 00:12:53,480 --> 00:12:55,960 Speaker 1: for a long time. I mentioned the overseas stuff, because 251 00:12:56,480 --> 00:12:58,400 Speaker 1: if you're smart and want to get away with us 252 00:12:58,679 --> 00:13:01,440 Speaker 1: as a fraudster, you don't really want to be in 253 00:13:01,480 --> 00:13:04,320 Speaker 1: the same country as your victims because eventually they will complain. 254 00:13:04,440 --> 00:13:07,839 Speaker 1: And you know, while the jail sentences here aren't as 255 00:13:07,840 --> 00:13:09,960 Speaker 1: long as you get the United States, I think being 256 00:13:10,040 --> 00:13:12,080 Speaker 1: made off read upon Zeschiv in New York and got 257 00:13:12,080 --> 00:13:14,559 Speaker 1: put away for one hundred and fifty years some of 258 00:13:14,559 --> 00:13:17,280 Speaker 1: the bigger fraudsters here have you ended up with ten 259 00:13:17,320 --> 00:13:18,400 Speaker 1: or living your jail terms. 260 00:13:19,080 --> 00:13:22,280 Speaker 2: You mentioned benefit fraud as well, and it's something that 261 00:13:22,480 --> 00:13:25,160 Speaker 2: always gets people up in arms. We all remember what 262 00:13:25,280 --> 00:13:28,440 Speaker 2: happened to former Green Party co leader Mateia two day. 263 00:13:28,720 --> 00:13:31,840 Speaker 2: Is that the most common form of fraud against the 264 00:13:31,880 --> 00:13:35,280 Speaker 2: government or public services or is that a drop of. 265 00:13:36,400 --> 00:13:41,440 Speaker 1: It's just your old fashioned tax evasion. It's contractors taking 266 00:13:41,559 --> 00:13:45,840 Speaker 1: cash jobs and not reporting their income. It's people shunting 267 00:13:45,960 --> 00:13:52,319 Speaker 1: personal expenses into business and claiming deductions. It's not declaring 268 00:13:52,440 --> 00:13:55,880 Speaker 1: second or third incomes. The numbers there are is probably 269 00:13:55,920 --> 00:13:59,640 Speaker 1: you know, seven or eight billion dollars of taxtavation each year, 270 00:13:59,679 --> 00:14:03,000 Speaker 1: and is what two or three million dollars have benefit 271 00:14:03,040 --> 00:14:06,160 Speaker 1: Ford each year? So that's one two thousandth Matt. 272 00:14:06,200 --> 00:14:09,000 Speaker 2: Given how much you've reported on fraud in the past, 273 00:14:09,200 --> 00:14:12,679 Speaker 2: does it bother you that governments have not put as 274 00:14:12,880 --> 00:14:16,120 Speaker 2: much focus on this when they talk about tackling crime. 275 00:14:16,520 --> 00:14:20,040 Speaker 1: Yeah, it's a perennial problem. It is harder the prospect 276 00:14:20,080 --> 00:14:23,240 Speaker 1: to be fair. Unless I found one fraud. There wasn't 277 00:14:23,280 --> 00:14:27,000 Speaker 1: running a sort of an elaborate loan scam. He was 278 00:14:27,120 --> 00:14:30,080 Speaker 1: funding the money for breast and plants for his mistresses, 279 00:14:30,800 --> 00:14:34,280 Speaker 1: and it was bringing along like vintage bottles of French 280 00:14:34,360 --> 00:14:37,160 Speaker 1: champagne to work functions. There are some good stuff in there, 281 00:14:37,400 --> 00:14:40,520 Speaker 1: but it's usually it doesn't get people as outraged if 282 00:14:40,560 --> 00:14:42,040 Speaker 1: you lose a lot of money to a fraud, So 283 00:14:42,200 --> 00:14:44,160 Speaker 1: often you're seen as well, you had that much money 284 00:14:44,240 --> 00:14:46,960 Speaker 1: to begin with, why are we so worried. We did 285 00:14:46,960 --> 00:14:48,880 Speaker 1: see a bit of a sea change in this after 286 00:14:48,880 --> 00:14:51,640 Speaker 1: the global financial crisis, but a lot of the finance 287 00:14:51,640 --> 00:14:54,760 Speaker 1: companies were found to have some fraudulent activities and it 288 00:14:54,800 --> 00:14:56,520 Speaker 1: became clear then that you know, it wasn't just one 289 00:14:56,560 --> 00:14:59,560 Speaker 1: hundred million dollars lost. That was our ten thousand pensions 290 00:15:00,480 --> 00:15:03,560 Speaker 1: who lost their life savings, which is you know, when 291 00:15:03,600 --> 00:15:05,320 Speaker 1: you think of it, that way, that's a that's a 292 00:15:05,360 --> 00:15:08,400 Speaker 1: horrific crime. It's harder to prosecute because you've got to 293 00:15:08,440 --> 00:15:11,600 Speaker 1: build up and reassemble all the financial crimes. It's not 294 00:15:11,600 --> 00:15:14,240 Speaker 1: that we can easily catch, you know, on CCTV, So 295 00:15:14,320 --> 00:15:16,160 Speaker 1: it takes a lot more resources for police. And there's 296 00:15:16,160 --> 00:15:18,720 Speaker 1: also this real gap in the system. With a serious 297 00:15:18,760 --> 00:15:20,600 Speaker 1: Fraud Office which is tidy, you know, a couple of 298 00:15:20,640 --> 00:15:23,960 Speaker 1: dozen staff. They only look at sort of cases five 299 00:15:24,040 --> 00:15:27,600 Speaker 1: million dollars and up. The police often struggle to deal 300 00:15:27,640 --> 00:15:31,000 Speaker 1: with cases that one hundred thousand dollars and greater. So 301 00:15:31,120 --> 00:15:34,160 Speaker 1: there's this real sweet spot for mid level fraud where 302 00:15:34,160 --> 00:15:37,120 Speaker 1: it's too complicated police, it's too small for the CFO, 303 00:15:37,720 --> 00:15:39,480 Speaker 1: and it can take quite a bit of lobby to 304 00:15:39,480 --> 00:15:40,400 Speaker 1: get the action on that. 305 00:15:40,960 --> 00:15:42,920 Speaker 2: What do we do there, how do we get those 306 00:15:43,040 --> 00:15:46,240 Speaker 2: kind of mid level fraud cases more in the spotlight. 307 00:15:46,320 --> 00:15:49,080 Speaker 1: Well, it's probably a matter of either expanding the remitt 308 00:15:49,200 --> 00:15:52,760 Speaker 1: Serious Fraud Office or expanding the capabilities of the zelland police. 309 00:15:52,800 --> 00:15:56,160 Speaker 1: I mean it's as simple as that. I think. I mean, obviously, 310 00:15:56,200 --> 00:15:59,040 Speaker 1: at at the level of bank operations, requiring them to 311 00:15:59,120 --> 00:16:02,440 Speaker 1: keep more information transaction details might be useful. I think 312 00:16:02,440 --> 00:16:04,480 Speaker 1: at the moment they need to keep seven years worth, 313 00:16:04,520 --> 00:16:07,120 Speaker 1: which sounds like an all very long time, but at 314 00:16:07,120 --> 00:16:09,520 Speaker 1: the point where people can play and often these things 315 00:16:09,560 --> 00:16:12,360 Speaker 1: have been running for a considerable period of time, and 316 00:16:12,640 --> 00:16:17,120 Speaker 1: a lot of their big frauds sort of tap out 317 00:16:17,440 --> 00:16:19,480 Speaker 1: when they're trying to quantify them, because simply they don't 318 00:16:19,520 --> 00:16:22,600 Speaker 1: have any idea about what happened, you know, beyond that 319 00:16:22,640 --> 00:16:25,440 Speaker 1: seven year period. I do think it's a political will. 320 00:16:25,800 --> 00:16:29,640 Speaker 1: Oddly enough, well, I'm generally not a fan of harsher sentences. 321 00:16:29,960 --> 00:16:32,720 Speaker 1: A white collar crime does seem to be one of 322 00:16:32,760 --> 00:16:35,800 Speaker 1: the crime types that are affected. The people committing these 323 00:16:35,880 --> 00:16:39,040 Speaker 1: crimes are for just tend to be quite deliberate in 324 00:16:39,120 --> 00:16:40,960 Speaker 1: what they're doing. They're sober when they're doing it, they're 325 00:16:41,000 --> 00:16:42,880 Speaker 1: doing it over a long period, and they're doing it 326 00:16:42,920 --> 00:16:47,160 Speaker 1: for a very clear financial reward. So letting them become 327 00:16:47,200 --> 00:16:49,280 Speaker 1: aware that, you know, if they carry on down this path, 328 00:16:49,840 --> 00:16:51,880 Speaker 1: not only will you lose all the money you've stolen, 329 00:16:51,960 --> 00:16:54,800 Speaker 1: but you know you're facing the prospect of a decade 330 00:16:54,800 --> 00:16:57,680 Speaker 1: in jail may sort of trigger that rational part of 331 00:16:57,680 --> 00:16:59,800 Speaker 1: their brain more than it would in the case of 332 00:17:00,600 --> 00:17:01,680 Speaker 1: the set of a strict driver. 333 00:17:02,400 --> 00:17:09,840 Speaker 2: Thanks for joining us, Matt. That's it for this episode 334 00:17:09,920 --> 00:17:12,760 Speaker 2: of the Front Page. You can read more about today's 335 00:17:12,800 --> 00:17:17,080 Speaker 2: stories and extensive news coverage at enzedherld dot co dot nz. 336 00:17:17,920 --> 00:17:20,840 Speaker 2: The Front Page is produced by Ethan Siles with sound 337 00:17:20,880 --> 00:17:25,520 Speaker 2: engineer Patty Fox. I'm Chelsea Daniels. Subscribe to the Front 338 00:17:25,520 --> 00:17:28,879 Speaker 2: Page on iHeartRadio or wherever you get your podcasts, and 339 00:17:28,960 --> 00:17:32,160 Speaker 2: tune in tomorrow for another look behind the headlines.