DHB fraudster ordered to pay Crown $6m

Michael Swann. Photo / Otago Daily Times

Convicted fraudster Michael Swann has been told to pay $6 million to the Crown and forfeit $4.4 million worth of property bought with money stolen from the Otago District Health Board.

Justice Graham Panckhurst's decision on the Crown's Proceeds of Crime Act application for $15.1 million from Swann was released this week.

The $15.1 million was Swann's share of the $16.9 million he and Queenstown man Kerry Harford were convicted of defrauding the Otago health board while Swann was its IT manager between 2000 and 2006.

Property valued at about $4.4 million which Justice Panckhurst ordered forfeited, and already resolved third-party claims, were deducted from the order the Crown sought.

The sum to be recovered falls about $5 million short of the total sought.

But Justice Panckhurst noted although an offender's ability to pay was not a relevant consideration under the act, he believed making a payment order that was beyond the reach of an offender was an exercise in futility.

Health board chief executive Brian Rousseau said he was still pleased with the outcome. "It sounds like a good decision was made."

The $6 million, plus the sale of assets, seemed like a significant order, he said. "I guess if any other assets are found we can always get them back, but I seriously doubt anything that might be out there would amount to that much anyway."

The health board initially pursued a civil case to recover money from Swann, but that case was stayed and overtaken by the Crown's application under the Proceeds of Crime Act.

Under that act, any money recovered from the pecuniary penalty order and the sale of assets goes to the government's consolidated fund, not the health board.

Mr Rousseau had "no idea" of the chances of recouping the $6 million.

Justice Panckhurst ordered the forfeiture of 33 items of property Swann bought with the tainted funds.

They include six pieces of real estate, 22 high-end cars and 4WDs, two motorcycles, eight boats, a vintage steam engine and various amounts of cash raised from the sale of assets bought with tainted funds. The items are valued in total at $3,492,583.

The judge also declared a further 15 items, valued in total up to $800,000, were available to part-satisfy the pecuniary penalty order. All the items of property are being held by the official assignee until any sale.

- OTAGO DAILY TIMES