KEY POINTS:
Wayne Thomas Patterson fleeced the taxpayer of $3.4 million - but he invested the money so well that the Government will get it all back, plus a tidy profit.
The $3,418,000 Patterson obtained in his benefit frauds is now - with interest - worth $4,085,000.
With $200,000 deducted for costs, that's a return of $467,000 for the Government.
"We've done very well. He invested very wisely," Social Development Ministry chief executive Peter Hughes said yesterday.
"We're about $400,000 in profit. That goes back to the Crown ... If this had been his own money, even half of it, he would have been set up for life and beyond."
Even while awaiting sentence for his record-breaking benefit scam, career fraudster Patterson was trying from his jail cell to get access to money stashed overseas.
The 48-year-old was sentenced yesterday to eight years in prison.
But as late as last month, he was trying through the post to get back money in an Austrian bank.
The attempts were made from Auckland Central Remand Prison, even though he knew authorities had frozen the bank account.
Social Development Ministry officials yesterday revealed details of Patterson's financial dealings, carried out from his rented West Auckland home for three years from July 2003.
He made about $56,000 a fortnight, and was busy accumulating cash until about June 2005.
Patterson then went property hunting, at one point almost buying a $2.4 million Matakana property.
That November he tried to open a jewellery business, an art gallery and a gold shop.
The ministry does not know if they were to be legitimate businesses or fronts for money-laundering.
He also bought gold for sums such as $265,000, $725,000 and $592,000. By the time he was finished, he owned 73.3kg in ingots, dust, bars and coins.
At one stage, he considered buying a cabin on board the cruise ship The World.
But though it was a busy life, it was not a particularly happy one, Mr Hughes said.
"Getting each fortnight more money than many people earn in a year, Patterson hoarded the cash and lived a lonely life few would envy," he said.
"With no friends, in a rented unit fortressed by high-tech security, his primary contact with the outside world was via internet chat-rooms."
Patterson created four companies and two discretionary trusts. He incorporated three firms in the Seychelles and one in Panama, and set up bank accounts in Austria and Switzerland.
Mr Hughes said Patterson was a loner who had wasted his life and his intelligence on failed fraud schemes.
"The tragedy for him is that if he had used his skills for legitimate purposes, he could be the millionaire he has always wanted to be.
"He is a very, very skilled man and if you could trust him I would hire him. You can't, and I won't."
Forensic accountant Barry Jordan, who was brought in to help investigate Patterson's crimes, said the fraudster would have been half to three-quarters of the way through realising his scheme when he was caught.
Mr Jordan said a Kiwibank staff member noticed several banking transactions from the same internet service provider and notified the Ministry of Social Development.
Activity on the account of "Wayne Peterson" was traced, and after Patterson filled his car with petrol and paid by eftpos, police obtained security camera images of their suspect and began trailing him.
Mr Hughes said the false identities Patterson set up in his benefit scams were supported by an extensive array of false paperwork.
Each identity had a birth certificate, with features such as the correct price from when the certificate would have been issued, a serial number from the series allocated at the time, and the period typeface.
The paper the forged certificate was printed on weighed the same as the paper used at the time.
"Our staff are trained to scrutinise these documents, they know to look for certain things, but they were very, very high-quality forgeries," Mr Hughes said.
The ministry had commissioned an independent review of controls on the benefit system. Mr Hughes said that found it had strong controls, but those alone could not protect against a determined fraudster.
The ministry had introduced a system of checking all benefit applicants' details against the births register.
Mr Hughes said that would prevent fraudsters using false identities, but would not prevent identity theft.
