Police investigating attempts to defraud cyclone recovery grant scheme

Te Karaka in the aftermath of Cyclone Gabrielle, which devastated the region on February 14. File picture

Police are investigating alleged “shameful” attempts to defraud the Government’s cyclone recovery grant scheme here.

The regional economic development agency and community trust charged with distributing funds here confirmed the situation this morning.

“Trust Tairāwhiti is aware of four suspected fraudulent applications to the Government’s Cyclone Recovery Fund for the Tairāwhiti region.

“This matter has been referred to the police and the Ministry of Business, Innovation and Employment (MBIE),” a trust statement said.

A trust spokeswoman was unable to comment further when the Herald asked how the trust had been made aware of the issue and how much money had been involved.

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A police spokesperson said “a small number” of reports of this type of activity had been received in its Eastern District.

“Inquiries into those matters are ongoing, including connecting with other relevant agencies.”

Part of MBIE’s role through the delivery of the business support package is to support local delivery partners (including Trust Tairāwhiti) to be aware of, identify, report, and manage fraud. It is the local delivery partners’ responsibility to manage suspected fraud through their processes, including reporting to the police.

The Ministry was aware of instances of suspected fraud, said Portia McKenzie, director regional development (north) at Kānoa, the Regional Economic Development and Investment Unit at MBIE.

“As these matters are now before the police, MBIE will not be commenting further.”

Applications for business support grants closed on April 16. All have now been processed.

Successful applicants initially received 43 percent of the amount applied for, due to the demand for grants exceeding the first tranche of funding.

A total of 877 applications were received and processed, with about $7m paid out.

“This is extremely disappointing that people abuse a system set up to help those adversely affected by Cyclone Gabrielle,” Mayor Rehette Stoltz said.

'A huge disappointment'

“There is huge need in the community and this shameful behaviour saddens me.

“Hopefully a formal police investigation will bring them to account. I do know that Trust Tairāwhiti has robust processes to ensure a fair, transparent system to allocate funding.”

Mrs Stoltz said work to further aid those affected by the cyclone was ongoing.

“The council has been supporting businesses by getting the damage to the basic infrastructure fixed up and allowing businesses to operate as normal after roads and water supply were affected. This work is ongoing.

“We also had a period of free parking in the CBD to attract shoppers into town.

“We also have rates remissions available for cyclone-affected residents and business.”

Gisborne Chamber of Commerce president Tessa Allan said the news of fraudulent claims for the cyclone recovery grant was “a huge disappointment”.

“The purpose of the recovery grant was to provide immediate relief for those businesses that were under immense pressure following the cyclone. Without this funding, many businesses in the Tairāwhiti region wouldn’t have survived. It’s frustrating that time is now spent investigating these fraudulent claims instead of focusing on post-cyclone support”.