We were warned off says helicopter trust worker

A whistleblower who sparked an investigation into alleged fraud at the Auckland Rescue Helicopter Trust said she was warned off asking questions about large advertising spending.

Julie Helson, who worked in the marketing department for Child Flight, the now defunct sister operation of the Westpac Rescue Helicopter, later carried out a secret search for financial records and handed documents to Internal Affairs, which then contacted the Serious Fraud Office at the end of 2001.

The investigation led to charges against four men - Malcolm Beattie, Stewart Thomas Romley, Wayne Porter, Peter John Pharo - who are accused of conspiracy to defraud the trust and Child Flight.

The prosecution says the group ran a pokie racket where funds from machines in pubs in which Pharo and Porter held a financial interest, were granted to the rescue services on the basis that half the money would go back to the pubs for advertising.

The pokie licences were held by the GoldTimes Charitable Trust, of which Pharo and Porter were trustees, as were members of the trusts who benefited from the grants.

The Crown says that between 1995 and 2002 GoldTimes granted $13.6 million to the two trusts, but $5.8 million of that was directed back into advertising.

Ms Helson told the High Court at Auckland that she first questioned advertising costs at a business retreat on Waiheke Island in January 2001.

"I wanted to know why in my end of year financial report it showed I had spent hundreds of thousands of dollars on advertising when I had no budget for it," she said.

"I asked if somebody could explain to me why ... it showed I had spent at least half a million in that financial year on advertising when I had no budget for advertising.

"First of all there was an uncomfortable silence ... and then I was told by Mr Beattie it was none of my concern."

Ms Helson said she later asked Romley about advertising costs and he told her it was "GoldTimes business and none of my business."

She described seeing invoices for advertising from three of five pubs in which Pharo and Porter had a financial interest: The Birdcage, The Palace Hotel and The Strand.

Ms Helson said she and a colleague, Pauleen Horan, visited the Palace pub and could find no evidence of advertising for Child Flight.

The pair requested a meeting with Beattie and again questioned advertising costs.

"Malcolm became quite angry and told us if we continued that line of questioning we'd be in very deep water."

Financial statements for the month of April 2001 showed income from GoldTimes at $94,800 and advertising costs of $44,680.

Ms Helson said the next monthly statement she received did not show advertising costs.

She and Ms Horan searched a storage room for invoices and financial statements and gave them to Internal Affairs in September 2001.

The court was shown an email written by Romley to general manager Scotty Watson on December 3, 2001, discussing the Internal Affairs audit.

This discussed having to meet lawyers and come up with a strategy and warned an audit would "very quickly lead to the 'advertising'."

Ms Helson said that in the same month she saw Romley taking files marked GoldTimes from his office at the helicopter trust and putting them into the boot of his car.

A lock was put on his office door after that.

Romley's lawyer Richard Earwaker asked Ms Helson why she had not mentioned a lock on the door of Romley's office until this year.

She thought she had made the comment to Internal Affairs at the time of their investigation and did not recall the trust having to move files from the building to create space.

Beattie's lawyer, John Billington, asked Ms Helson if the comment about being in "very deep water" had referred to a warning about making multiple funding applications for the same pieces of equipment.

She said it was made in response to questions about advertising costs and "we felt very threatened".

The case

Four men are accused of conspiracy to defraud the Auckland Rescue Helicopter Trust and ChildFlight Trust by diverting millions of dollars from pub gaming machine takings.

The accused

Malcolm Beattie, Wayne Porter, Peter John Pharo, Stewart Thomas Romley, all of whom had roles in the GoldTimes Trust, which distributed grants to the Helicopter and ChildFlight trusts.