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Pair found guilty in Otage DHB fraud scam

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Fri, 05 Dec 2008 12:00a.m. UPDATED: 11.40PM

Two men accused of defrauding Otago District Health Board of almost $17 million have been found guilty.

Michael Swann 47, the board's former chief information officer, and Kerry Harford, 48, a Queenstown surveyor, have both denied acting dishonestly or fraudulently.

The Crown said they had used 198 invoices from Sonnford Solutions, a company formed by Harford, to charge the board $16.9 million for IT-related services that were never provided.

After retiring at 10.30am today, the jury returned to the High Court at Dunedin 12 hours later to find the pair guilty on three counts of fraud, One News reported.

The prosecution said that Swann received just over $15 million in six years, while the board was paying him an annual salary of $145,000 in his role as head of IT.

The remaining $1.8 million went to Harford.

Swann's lawyer, John Haigh QC, argued his client had "abysmal" business acumen, but that did not make him a criminal.

For Harford, Greg King suggested it was absurd that a person would embark on a dishonest course of conduct to defraud $17 million and take only 10 percent.

The pair will be sentenced early next year.

NZPA

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Comments

06 Dec 2008 11:24a.m.

karl wrote:


Now that the criminal case has finished, an internal inquiry must now be run to determine how such gross mismanagement over such a long period of time has aloud this type of fraud to go undetected, it is hypocritical of Richard Thompson and Brian Rousseau to be condemning of these two, and to be saying it has deprived the elderly, the sick etc of much needed funding, when it is these two who have largely, been in control of the hospital and have failed to detect the loss, especially when Mr Swann only had signing authority of 200k, but they continued to accept invoices from him far in excess of this amount.
A more robust stewardship from the top would have seen this offending stopped long before the figure got to this extent.
These two now need to be investigated as well and sacked accordingly if for nothing else but gross mismanagement, im sure if this had occurred in a private company that would be the likely outcome, but as we have come to expect from the public sector authority with no responsibility.