The SFO has had a transformative year that has seen the implementation of new case and evidence management systems.
The Serious Fraud Office (SFO) has had another very good year with the investigation and prosecution of a number of important cases coming to a successful conclusion. Forty-three defendants appeared before the Courts in 2017/18 in prosecutions brought by the SFO, including appeals, with a total of $188 million in alleged fraud value. Seven cases concluded with guilty pleas and three matters were finalised with convictions following trials. In all matters concluded, guilty verdicts or pleas were secured and convictions upheld. Further details about our cases can be found later in this report.
As the country’s lead law enforcement agency for investigating and prosecuting serious and complex financial crime, it is critical that the SFO keeps abreast of advances in technology. We not only need to understand the new ways computer-facilitated crime is being conducted, but we must ensure that our systems can manage an ever increasing digital workload.
The cases we investigate generally contain hundreds of thousands of documents or, in our more complex cases, millions. In a recently-concluded mortgage fraud case the SFO processed more than 50 terabytes of raw data, which is the equivalent of 13 billion pages printed on both sides.
To fundamentally improve our ability to process the growing volume and digital complexity of evidentiary material, the SFO has invested $2.28 million in two new software applications. The new systems provide increased flexibility and automation, and help us to better manage the growing volume of evidence.
Strengthening our Electronic Forensic Unit (EFU) has also helped boost the SFO’s digital capabilities. We have recruited a second full-time electronic forensic investigator and established a club-funded electronic forensics position, which is supported by the SFO and New Zealand Customs Service and funded by Immigration New Zealand, the Financial Markets Authority, the Commerce Commission, and the SFO. The investigator will be based at the Customs forensic lab in Auckland and will work across the agencies on projects to counter computer-facilitated crime.
This expansion of the EFU comes after more than a decade of significant growth in electronic evidence, particularly in terms of the diversity of electronic material we process. Having investigators who can search for and extract hidden or deleted electronic files, break passwords, unlock digital devices, and analyse metadata has become absolutely critical to the success of our operations.
Our electronic forensic investigators played a key role in a recent SFO trial of three associates involved in a scheme that fraudulently obtained $54 million of bank lending. They showed that one of the defendants was the ‘second-in-command’ of her husband’s fraudulent enterprise, rather than innocently carrying out orders as she claimed. Justice Katz, in reaching her verdict, relied on SFO evidence that forensically linked the defendant with false Chinese statements used to obtain the lending. The evidence revealed that digital spreadsheets found on electronic devices in the defendant’s office were the source of the false statements.
New Zealand has made valuable progress to combat bribery and corruption in recent years but as a country we cannot afford to be complacent. Large-scale offending can still take place if we do not remain vigilant. Increased spending on public infrastructure and government procurement as well as expanding social and business links to jurisdictions with high instances of corruption amplify the risks.
To strengthen New Zealand’s ability to fight corruption, the SFO together with the Ministry of Justice is leading an Anti-Corruption Work Programme. With the support of a wide group of stakeholders drawn from the public sector, academia and local government, the programme aims to prevent and deter corruption. The Cabinet-endorsed initiative seeks to proactively respond to, and reduce the risks of fraudulent and corrupt behaviours becoming embedded in New Zealand.
I would like to take this opportunity to thank the SFO staff for the tremendous work they do to ensure that we are successful in the investigation and prosecution of cases. Their expertise is unparalleled, and their work underpins the good progress we are making with our strategic aims to prevent fraud and corruption. They all go above and beyond the call of duty, working long hours and weekends when required. Having some familiarity with the agencies working in this space overseas, I have no hesitation in saying that I consider the SFO to be another example of New Zealand punching well above its weight and leading the way. I am very grateful for the opportunity to work with such a talented and dedicated group of people.
Chief Executive and Director
Highlights of 2018
in alleged fraud value for
prosecutions brought by the SFO
custodial sentences handed
down for convictions achieved
New case and evidence manage systems
SFO installs two new
software applications to improve
efficiency of investigations
New Zealand tops the world
for perceived low levels of public sector corruption