On 11 February 2010 Michael Andrew Swann was sentenced to 20 months jail for accepting $755,154 in bribes from long-term friend and business associate Robin Sew Hoy: the sentence to be served concurrently with his present jail sentence of nine and a half years for his part in defrauding the Otago District Health Board (ODHB) of $16.9 million.
Swann had pleaded guily to corruption (accepting bribes) in November 2009 and on 17 December 2009 he was convicted in a jury trial in the Dunedin High Court of a single charge laid against him under the Secret Commissions Act relating to 85 secret “kick-back” (inducement) payments he received from Sew Hoy. Swann will therefore serve no extra time behind bars for the crime of accepting bribes, which carries a maximum penalty of two-years jail or a fine not exceeding $1,000, as he was only sentenced to serve time concurrently with his present term imposed for his crimes involving fraud. The Crown sought reparation of $430,153 to be paid to the ODHB by Swann for his crimes. No order was issued.
The source of the “kick backs” Swann received was ultimately the tax-payers purse, as they came to him via Sew Hoy who was paid by the tax-payer funded ODHB. Swann, who was employed as chief information officer on the board, regularly channelled computer technology work to Sew Hoy’s company, Innovative Solutions Ltd, during the same time he committed fraud offences against the Board (2000-2006).
Sew Hoy paid money to Swann, to ensure Innovative Systems provided helpdesk services to the DHB. Sew Hoy pleaded guilty to the charges of essentially bribing Swann in the Dunedin High Court in September 2009 and on 17 November 2009 was sentenced to 10 months’ home detention and ordered to pay $325,000 to the Board in reparation. He has made full reparation.
When the details of the corrupt Swann-Soy arrangement came to light in late 2006, the arrangement between the ODHB and Soy Hoy’s company Innovative Systems, was promptly severed. The same three persons who had been providing the IT help-desk service on behalf of Robin Sew Hoy were then employed by the Hospital Board with an immediate saving to the board of approximately $500,000 per year.
The payments to Swann from Innovative Systems were generally by cheques given to him personally then banked into the account of Computer South Ltd, a company under his total control.
From here, as the Serious Fraud Office established in their fraud case enquiries into his financial affairs, Swann used the money to purchase properties, vehicles and other assets, registered in the name of trusts, his wife or friends.
From 20 March 1997 to 22 September 2006, one of the principals of Checketts McKay Law in South Otago, Iain Grant Fyfe, was a 33% shareholder in Computer South Ltd, a company that owned no assets, had no paid employeees, and paid no tax. It operated as a de facto bank account for Swann who while not its director had total conrol of it.
As well as acting as solicitor for Computer South, Iain Fyfe, Checketts McKay (Wanaka), acted as solicitor for Swann’s property purchases in which he used dirty money sourced from the tax-payer funded ODHB via Computer South. Fyfe’s law firm assisted Swann in setting up trusts which came to own many of the properties bought using laundered money and which were controlled by people Swann had ‘control’ and influence over (e.g. long term friends).
Selected references: “White Collar Crime” 18 February 2010 http://www.odt.co.nz/opinion/editorial/94008/white-collar-crime
Home Detention an option. 29 September 2009
$755,000 bribe in health board rip-off. 18 December 2009. http://www.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=10616251