Swney's $3m ticket to the high life

Swney on Wednesday pleaded guilty in the Auckland District Court to four representative charges of tax evasion. Photo / Janna Dixon

Weekend Herald investigation: Executive lived in multimillion-dollar homes in decade he failed to pay tax

Tax cheat Alex Swney arranged for the council-funded Heart of the City to pay him nearly $300,000 annually - despite his role as chief executive of the business lobby group being only part-time - according to Weekend Herald calculations from court documents.

An investigation into the disgraced businessman has also revealed Swney lived in a succession of multimillion-dollar homes on Auckland's most desirable streets in the decade he failed to pay tax.

On Wednesday Swney pleaded guilty in the Auckland District Court to four representative charges of tax evasion comprising of $1.8 million in unpaid tax, and a further $1.2 million in interest and penalties, accrued between 2000 to 2012.

The Weekend Herald has calculated the amount of money Swney would have received from Heart of the City based on the total amount of tax evasion pleaded guilty to - $1.4 million in income tax, and another $450,000 of unpaid GST.

The results, checked with two independent tax experts, suggest Swney may have received about $3.3 million of undeclared income during the 12-year period covered by the charges, equating to average annual payments of $280,000.

Heart of the City interim chief executive David Wright would not discuss the amount, saying the matter was still before the courts, but former Heart of the City chairman Peter Cammell was stunned to hear of the scale of payments.

He said the amount far exceeded what he understood what was the agreed rate he was supposed to be paid for being chief executive.

"His monthly billings [for his work as chief executive] were not at that level," Mr Cammell said.

Alex Swney described living in Cremorne St, Herne Bay, as a 'very regular set-up'.

Mr Cammell said the chief executive's job was part-time as Swney spent a considerable part of his week working for the Briarwood shoe and handbag business of his wife, Angeline Marshall.

"That's why he was able to claim he was an independent contractor, and not an employee," he said.

Swney, until name suppression over his offending lapsed in October, enjoyed a reputation as a vibrant and successful businessman who moved in the circles of Auckland's elite.

During the time he was failing to pay tax, his residences also matched his social status with many years spent living in mansions on New Zealand's most expensive street.

Swney described living on Cremorne St in Herne Bay - where the average house is worth more than $6m and Swney rubbed shoulders with rich-listers - as a "very regular set-up ... That's what I love about it."

In October 2006 the couple spent $3.2 million buying into the street before flipping their home three years later for $4.1 million and moving next door.

Swney told the Herald in 2011 he planned on bowling the 377sqm faux Spanish casa to build an architect-designed glass box.

That ambitious redevelopment never happened - coinciding with the start of an IRD probe into Swney - and in November 2013 the couple moved into a $3.1 million home on Arthur St in Freemans Bay.

The couple paid $1.7 million for a converted commercial building on Grey Lynn's Crummer Rd in January last year, which formally became their residence in October.

Despite this week's guilty plea, Swney's time with the courts and justice system is far from over with Auckland District Court Judge Grant Fraser flagging prison time as an "inevitable" outcome at sentencing in April.

Heart of the City chairman Terry Gould has said civil action, including asset freezes, has begun against their former chief executive in a bid to recover funds.

The Serious Fraud Office is also continuing its investigation. That probe is understood to be focusing on a number of allegedly falsified invoices - including some purportedly from the New Zealand Herald - that resulted in Heart of the City paying funds into bank accounts controlled by Swney.