Man spent Covid-19 wage subsidy on gambling, adult entertainment

A man has been sentenced to more than a year in prison after defrauding taxpayers to the tune of almost $200,000 in Covid-19 wage subsidies, spending the money on gambling, adult entertainment clubs and fast food.

Nathan Peter Irvie Downey was sentenced in the Manukau District Court on August 25 after submitting 19 fraudulent wage subsidy applications for his company Protective Systems Limited (PSL) between March and August 2020, MSD said.

He had admitted to 13 charges of dishonestly taking or using a document.

MSD detailed how 13 of Downey’s applications were successful, totalling $196,076. He had named several people as PSL employees on his applications, including himself, but checks by MSD found the company had no employees and wasn’t a registered employer.

Some people named in the applications also didn’t exist.

Bank statements showed PSL paid $74,363.73 to contractors during the period Downey received the wage subsidy funds, and about $17,896.15 of that went to his personal bank account.

He spent the remaining $121,712.27 on the company and himself, with money going towards online gambling, adult entertainment clubs and fast food.

MSD said Downey made several other unsuccessful wage subsidy applications totalling $66,781.20. Between March and June 2020, he was also receiving the wage subsidy as a full-time employee of a company run by his mother.

Judge Mina Wharepouri said Downey had taken “whole hog advantage” of the system, stating his offending involved a high level of planning and premeditation.

Judge Wharepouri sentenced Downey to 20.5 months in prison.

MSD noted Downey has filed an appeal against his sentence, which will be heard in the High Court at Auckland on September 15.

More fake employees

Meanwhile, two more people have been sentenced for wage subsidy fraud which also involved listing fake employees on the application forms.

Abbey Raroa and Te Rangihaeta Te Rito Athrenos-Wise were sentenced at the Auckland District Court on August 14 on two representative charges of dishonestly taking or using a document and one charge of receiving over the Covid-19 Wage Subsidy Scheme.

Four wage subsidy applications totalling $67,536.40 were submitted dishonestly between April and May 2020 by Athrenos-Wise. Two further applications totalling $85,725.60 were made by Athrenos-Wise between March and May 2020, but were declined without payment.

The applications were submitted on behalf of two companies, Raroa being the sole director and shareholder of one of them.

Neither company was eligible for the wage subsidy because they were not operating before the applications were submitted, and none of the employees listed were real people, the Ministry of Social Development (MSD) said.

Raroa spent some of the wage subsidy on day-to-day living expenses, alcohol and retail purchases, as well as transferring about $30,000 to her personal bank account.

When interviewed by MSD, Raroa admitted that she knew the company was not entitled to the wage subsidy and did not question why such large funds had been paid into the company’s bank account.

Judge Debra Bell sentenced Athrenos-Wise to 22 months imprisonment, cumulative on a sentence currently being served for other offences. Raroa was sentenced to six months of community detention.

The Wage Subsidy delivered about $18.8 billion in wages for more than 1.8 million jobs, with MSD continuing to investigate if those who received payments were entitled to them.