The Department of Internal Affairs

The Department of Internal Affairs

Te Tari Taiwhenua

Building a safe, prosperous and respected nation

 

Third man sentenced in pokie fraud case


27 July 2017

The third defendant in the multi-million dollar gaming machine fraud case was sentenced to 12 months’ home detention in the Wellington High Court today.

Paul Anthony Max (60), of Nelson, the final defendant in the Operation Chestnut case had been found guilty on three charges of obtaining by deception. Justice Dobson considered Mr Max’s role in deceiving the Department of Internal Affairs a subsidiary one.

His co-defendants were sentenced on 13 July – Michael O’Brien (58) of Blenheim, to 4-1/2 years’ prison on five charges and Kevin Coffey (57) of Hastings, to 12 months’ home detention on one charge.

The long-running inquiry into the manipulation of gambling licences and grants was prosecuted by the Serious Fraud Office (SFO) and involved the SFO, the Police’s Organised and Financial Crime Agency of New Zealand (OFCANZ), and Internal Affairs (DIA).

Internal Affairs’ Gambling Compliance Director Gareth Bostock, said the court has made clear that misleading the regulator is a serious issue.

“New Zealand communities should expect the highest integrity from the gambling sector,” he said. “Community organisations must be able to access grants from gambling societies without the concern that funding is being directed unlawfully.

“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.”

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.