23 charged after charity network allegedly siphoned $3.2 million gambling grants
More than 20 people have been charged after it was discovered that a network of organizations has obtained NZD 3.2 million ($ 1.9 million) in fraudulent gambling grant funds.
The network included six charities and incorporated societies, found to have fraudulently gained $ 3.2 million in gambling grant funds. 23 people were charged in the Auckland District Court on Thursday (February 12), with more than 500 charges levelled against them in total under the Crimes Act, including multiple alleged counts related to money laundering, receiving, and using forged documents.
It’s been described as the region’s “largest ever prosecution” by the Department of Internal Affairs gambling director Vicki Scott, coming after a far-reaching investigation. Under the Gambling Act, gambling machine operators are required to give a minimum of 40% of their profits back to the community via grants to community groups and charities.
However, these groups obtained the grants for salaries for employees that didn’t exist.
“Taking its name from a Latin term meaning ‘to track down’, ‘Operation Indago’, probed a network of six charities and incorporated societies used to obtain $ 3.2 million of gambling grant funds for personal gain. It’s been a mammoth and complex investigation,” said Scott in a press release.
Gambling grant funds used to launder money through gaming venues
Some of the defendants also allegedly ran gambling venues using these poker machines, laundering the grant funds through the venue’s bank accounts to repay gambling machine profits back to the operators in what Scott describes as a “cynical abuse of the gambling system”.
“We will continue to respond strongly to any attempts to undermine the important measures that ensure gambling profits go back into the community, not into individuals’ back pockets,” Scott said.
All of the defendants’ identities are being kept anonymous until their next court date on April 9. In Auckland, money laundering and related offences have a maximum penalty of seven years’ imprisonment, while using a forged document has a maximum penalty of 10 years in prison. Similar schemes have taken place elsewhere around the world, including the US and the UK.
Featured image: Unsplash
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