The Serious Fraud Office is working with other government departments to prevent COVID-19 relief funds from being defrauded.

The SFO is providing guidance to ensure counter-fraud measures across government are aligned to international best practice in terms of the provision of emergency relief and associated services. The agency is also establishing an advisory group made up of fraud experts within agencies to support the government’s COVID-19 counter-fraud response.

The counter-fraud guidance the SFO has been sharing is based on its expertise in investigating and prosecuting public sector fraud and from its membership of the International Public Sector Fraud Forum, where the agency has access to the collective experience of its Five Eyes partners.

The Director of the SFO, Julie Read, says, “We are aware from our international counterparts that other countries have seen a significant rise in fraudulent activity generally as a result of COVID-19. This has reflected both the opportunistic targeting of those in need and the redeployment of established criminal activity to defraud government relief programmes. There is no reason to believe that New Zealand would be any different in this regard.”

The SFO understands that the government agencies responsible for disbursement of relief funds are aware of the risks and have in place measures to counter them.

Ms Read says, “In times of emergency it is particularly important to ensure that every dollar of public funding reaches the intended beneficiaries not those who would fraudulently line their own pockets. New Zealand government agencies are generally well placed to restrict any rise in fraudulent activities by being alert to the risks. However, the SFO is under no illusion that financial crime will almost certainly increase as a result of COVID-19.”

Background information

According to SFO guidance, government agencies responsible for the design and administration of COVID-19 relief programs should:

• Accept there is an inherent risk of fraud and it is likely to happen.
• Where possible, integrate fraud control personnel into the policy and process design to build the awareness of fraud risks.
• Work together with fraud control personnel to implement low friction countermeasures to prevent fraud where possible.
• Carry out targeted post-event assurance to check for instances of fraud.
• Be mindful of the shift from emergency payments to more targeted relief and revisit the control framework at this point.

About the SFO

The Serious Fraud Office (SFO) was established in 1990 under the Serious Fraud Office Act.

The SFO is the lead law enforcement agency for investigating and prosecuting serious or complex financial crime, including bribery and corruption.

The presence of an agency dedicated to white collar crime is integral to New Zealand’s reputation for transparency, integrity, fair-mindedness and low levels of corruption.

This work contributes to a productive and prosperous New Zealand and the SFO’s collaborative efforts with international partners also reduce the serious harm that corrupt business practices do to the global economy.

The SFO has two operational teams: the Evaluation and Intelligence team and the Investigations team.

The SFO operates under two sets of investigative powers.

Part 1 of the SFO Act provides that it may act where the Director “has reason to suspect that an investigation into the affairs of any person may disclose serious or complex fraud.”

Part 2 of the SFO Act provides the SFO with more extensive powers where: “…the Director has reasonable grounds to believe that an offence involving serious or complex fraud may have been committed…”

In considering whether a matter involves serious or complex fraud, the Director may, among other things, have regard to:

• the suspected nature and consequences of the fraud and/or;
• the suspected scale of the fraud and/or;
• the legal, factual and evidential complexity of the matter and/or;
• any relevant public interest considerations.

The SFO’s Annual Report 2019 sets out its achievements for the past year, while the Statement of Intent 2014-2018 sets out the SFO’s strategic goals and performance standards. Both are available online at www.sfo.govt.nz

The SFO Twitter feed is @SFO_NZ

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