Swney fraud tops $4 million

Former Heart of the City chief executive Alex Swney has been told to expect a jail term when sentenced on four charges next week. Photo / Jason Oxenham

Former Heart of the City boss admits new charge, SFO counts ‘cost to community’.

Auckland businessman Alex Swney's actions have reflected poorly on the country, the Serious Fraud Office says.

This comes after Swney admitted a new charge yesterday, taking his total fraud to more than $4 million.

The 57-year-old former Heart of the City boss appeared in Auckland District Court yesterday afternoon on a new representative charge, which was laid by the Serious Fraud Office (SFO).

Court documents show he dishonestly used false invoices to obtain $2,527,005 from the company between February 2004 and October 2014.

The charge carries a maximum prison term of seven years.

Speaking after Swney's court appearance, the SFO said his actions had caused lasting problems for Heart of the City, and reflected poorly on the country.

"Mr Swney dishonestly obtained funds to which he knew he was not entitled. The misappropriation of funding intended to benefit Auckland businesses increased the cost of the services provided by Heart of the City and reduced the benefits delivered by what has otherwise been a very successful venture," SFO director Julie Read said. "Fraud of this size by employees who are entrusted with the management and expenditure of substantial sums of money is very costly for both the businesses concerned and more broadly for the community as it harms the integrity of these organisations."

In January, the former mayoral candidate pleaded guilty to four representative charges covering 12 years of offending and $1,757,147 of unpaid taxes.

The IRD charges come with a maximum penalty of five years imprisonment and/or a fine of up to $50,000, and almost from the outset, the SFO said it was also investigating Swney.

Swney is set to be sentenced on the IRD-laid charges next week and a judge previously told him jail was the inevitable outcome.

His lawyer Murray Gibson acknowledged that in court yesterday, and asked that his client be sentenced on both matters on the same date.

Heart of the City - a city-centre business association registered by Swney in 1994 - has income-tax exemption on the basis that it was created to develop or increase amenities for the Auckland public.

But technically the defendant was a contractor of the organisation as the sole director of AGS Services Ltd and the services he provided were taxable.

A summary of facts filed by the IRD alleged Swney had issued "various fictitious invoices" to Heart of the City.

Swney is also facing civil action launched by Heart of the City.

The organisation welcomed Swney's admission of guilt. Board chair Terry Gould said the sentencing would bring a sense of closure on "a matter that had shocked and angered the community, our members and our staff". He said efforts to recover the funds were ongoing.

Swney was granted bail by the judge. NZME.