Jami-Lee Ross is one of four people being prosecuted by the Serious Fraud Office over political donations. Photo: RNZ / Craig McCulloch
The Serious Fraud Office is back in the news once again taking up two big headline-grabbing cases.
Compared with previous famous finance company collapses involving hundreds of millions of dollars the numbers are small; sitting MP Jami-Lee Ross and three Auckland businessmen face SFO charges relating to two donations of $100,000 to the National Party. All have pleaded not guilty. The agency is also investigating the New Zealand First Foundation's handling of donations.
National Business Review senior journalist Maria Slade says the cases don't necessarily fit into the SFO's remit of investigating serious and complex fraud but there is a big public interest factor.
"Have we got people who are allegedly linked to the Chinese state funnelling money into the New Zealand National Party? If that's the case that's an issue of huge public interest and it is the sort of thing the SFO should be getting down on. This is the integrity of our political system and the authorities may be wanting to make an example of this case," says Slade.
The government agency runs on an annual budget of just under $10 million. It employs former police officers, lawyers and forensic accountants to dig into cases. By necessity it is secretive and it has extraordinary powers. It can force people to give evidence against themselves.
In the last two years the SFO has had 100 percent success with the cases it has taken to court. However, it does get flak for leaving the more sophisticated fraudsters alone while targeting the "low hanging fruit".
"Some people argue it’s only the idiots who leave a paper trail, or their accomplices dob them in, are the types of people they go for," says Slade.
In recent years the agency has tended to target mortgage fraudsters, dodgy sole practise financial advisers in provincial centres, charities where money has embezzled, officials taking backhanders. But by not taking the complex cases the SFO is not testing the law, says Slade.
It successfully tackled Ross Asset Management run by financial adviser David Ross whose ponzi scheme failed in 2012, owing $115 million. He was jailed after he pleaded guilty to charges laid by the SFO and the Financial Markets Authority.
Slade says the agency did "quite good work" on several finance companies that collapsed during the Global Financial Crisis but it dropped its investigation against Hanover Finance, run by high profile businessmen Mark Hotchin and Eric Watson - a decision which surprised Slade, who was covering the story at the time.
