$755,000 bribe in health board rip-off

Michael Swann pleaded builty yesterday to one charge under the Secret Commissions Act. Photo / Otago Daily Times

Otago District Health Board former chief information officer Michael Swann has admitted accepting a $755,000 bribe from long-time friend and business associate Robin Sew Hoy in exchange for more of the board's information technology work.

Swann, 48, appeared before Justice Lester Chisholm in the High Court at Dunedin yesterday and pleaded guilty to one charge under the Secret Commissions Act.

The allegation was that, in his capacity as board chief information officer, he corruptly received consideration of $755,153 from Sew Hoy between January 6, 2000, and September 11, 2006, as an inducement for favourable treatment in relation to the provision of help desk services.

The charge carries a maximum penalty of two years' jail or a fine not exceeding $1000.

Swann was convicted and remanded in custody for sentence on February 11 next year.

He is just over nine months into a nine-and-a-half-year prison sentence, with a minimum non-parole term of four years and three months, for defrauding the board of almost $17 million with another business associate.

Sew Hoy, who was sentenced to home detention after pleading guilty to paying a secret commission to Swann, had paid $325,000 reparation, Crown counsel Robin Bates told the court.

The Crown was seeking reparation of $430,153 from Swann.

The $755,153 from Sew Hoy was by way of separate payments to Swann.

The arrangement was that for every hour charged out at $95 plus GST for providing help-desk services, Swann would receive $25. Subsequent inquiries by a health board employee indicated the average hourly charge-out rate for similar services to other hospital boards at the time was about $56.

The payments to Swann were generally by cheques given to him personally then banked into the account of Computer South Ltd, a company under his total control.

Before Swann was employed in 1998, board employees operated the help-desk system "in-house", providing the various services required.

When the details of the Sew Hoy-Swann arrangement came to light in late 2006, Mr Bates said, the arrangement was terminated and the board made an immediate saving of about $500,000 a year by employing the same three people who had been providing the service on behalf of Sew Hoy.
- OTAGO DAILY TIMES