Man fraudulently claimed Covid-19 wage subsidies and spent money on gambling, ‘adult entertainment’

The wage subsidy scheme was designed to keep people in their jobs during Covid-19 lockdowns. Photo / 123RF

A man who fraudulently obtained almost $200,000 by claiming Covid-19 wage subsidies, including for people who did not exist, spent some of the money on gambling and “adult entertainment”.

Nathan Peter Irvine Downey pleaded guilty in the Manukau District Court to 13 charges of dishonestly using a document.

He was sent to prison for 20-and-a-half months.

However, his counsel, Claire Farquhar, said that Downey repaid all of the money before January this year.

She also said that he had engaged in gambling counselling and other counselling on his own initiative.

The Ministry of Social Development (MSD), which administered the subsidy scheme, said that between March 23 and August 24, 2020 Downey submitted 19 fraudulent wage subsidy applications for his company Protective Systems Ltd, a company with its registered office in Wairoa.

At the time, he was the sole director and shareholder of the company, which uses contractors to provide painting and fireproofing services.

Thirteen of the 19 Covid-19 applications were successful, totalling $196,076.

Several people were named in applications as PSL employees, including Downey.

Subsequent checks by the MSD found that the company had no employees and was not a registered employer. Some of the people named in the applications did not exist.

The company’s bank statements showed it paid $74,364 to contractors during the period Downey received the wage subsidy funds, and about $17,896 of that went to his personal bank account.

The company was generating varying degrees of income during this period.

Downey spent the remaining $121,712 on company and personal use, including online gambling, adult entertainment clubs, and fast food, an MSD statement said.

Downey made several other unsuccessful wage subsidy applications totalling $66,781. Between March and June 2020, he was also receiving the wage subsidy as a full-time employee of a company run by his mother.

Judge Mina Wharepouri noted that the offending involved a high level of planning and premeditation, with Downey taking “whole hog advantage” of the system.

The offending was “more exploitative” than some other types of fraud given the Wage Subsidy Scheme was intended to address a national emergency, the judge said.

Downey has filed an appeal against his sentence, which will be heard in the High Court at Auckland in September.

Ric Stevens spent many years working for the former New Zealand Press Association news agency, including as a political reporter at Parliament, before holding senior positions at various daily newspapers. He joined NZME’s Open Justice team in 2022 and is based in Hawke’s Bay. His writing in the crime and justice sphere is informed by four years of front-line experience as a probation officer.