Over $3 million was allegedly won through fraudulent gambling grants

More than 20 people have been charged after a network of organizations was found to have received NZ$3.2 million ($1.9 million) in fraudulent gambling subsidies.

The network includes six charities and registered companies that were found to have fraudulently won $3.2 million in gambling grants. 23 people were charged in Auckland District Court on Thursday (February 12) with a total of more than 500 charges under the Crimes Act, including numerous alleged charges related to money laundering, obtaining and using false documents.

It was described as the « biggest prosecution in the region » by Home Office director of gambling Vicky Scott, coming after a wide-ranging investigation. Under the Gambling Act, operators of gambling machines are required to return a minimum of 40% of their winnings back to the community through grants to community groups and charities.

However, these groups received wage subsidies for employees that did not exist.

« Operation Indago, named after a Latin term meaning ‘to track,’ investigated a network of six charities and incorporated companies used to obtain $3.2 million in gambling subsidies for personal gain. This was a huge and complex investigation, » Scott said in a press release.

Gambling grants used to launder money through gaming venues

Some of the defendants are also alleged to have operated gambling establishments using these poker machines, laundering the handouts through the establishments’ bank accounts to funnel winnings from the gambling machines back to the operators in what Scott described 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 and not into people’s back pockets, » Scott said.

The identities of all defendants are being kept anonymous until their next court date on April 9. In Oakland, money laundering and related offenses carry a maximum penalty of seven years in prison, while using a false document carries a maximum penalty of 10 years in prison. Similar schemes are run elsewhere in the world, including the US and the UK.

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