Accused benefit fraudster hid $1m in home and garden

By David Fisher

It is being labelled the biggest benefit scandal in New Zealand's history - an Auckland man who is accused of pulling in $3.2 million in two-and-a-half years using 120 false identities.

Wayne Thomas Patterson, 47, a former electrician, is now in prison awaiting trial after a raid on his Massey home by police and investigators from the Ministry of Social Development (MSD).

He appeared in Waitakere District Court briefly last week to be charged with six counts of obtaining a document for pecuniary advantage.

Patterson was convicted of benefit fraud and jailed for 16 months in Australia 20 years ago.

The charges currently before the New Zealand courts come after investigators searched Patterson's rented home and the garden behind it.

The Herald on Sunday has also visited the house and can reveal a bizarre, hidden life.

Inside the $230-a-week flat with a plain exterior, investigators found the interior of a mansion. Much of it had been rebuilt, and it was filled with designer furnishing.

There were large leather recliners, a top-quality weight training room and a home cinema system with a 12-foot wide screen.

There was also a garden with more than $50,000 worth of plants, including rare palms, and pathways leading past marble seats and faux Easter Island heads.

A security system guarded the home, with cameras focused to the front and rear of the house, and inside. They all fed images back to one central computer.

But the investigators - a mix of police and MSD staff - were looking for more. They believed a large amount of money was hidden somewhere in the home.

They had watched Patterson for a week as he visited a string of ANZ banks across town, withdrawing money from ATM machines. In each case, Patterson had returned home - it was the most likely place for the money to be stashed.

Once they began searching, the extent of the scandal began to reveal itself. They found documents to support more than 120 identities in a ceiling cavity, along with a series of driver licences, ATM cards and disguises used to fool Work & Income staff. There were also about 100 keys to post office boxes from Kaitaia to Invercargill - the contact addresses for the multitude of false beneficiaries registered with Work & Income.

Also hidden were a number of New Zealand passports. One found by officials carried the name "Geoffrey Patterson" - yet it had the same face as the man known to neighbours as Graham Johnstone.

The accused man's real name - Wayne Patterson - only emerged when they searched for the identity of the registered owner of the 2002 Nissan Primera parked in the driveway.

The investigators knew what they were looking for. According to sums done by Work & Income, which answers to the MSD, there were at least 120 linked false identities that were receiving cash. In total, those identities were receiving $54,000 a fortnight - more money than the celebrity drug ring kingpin, John Waterworth, 56, was making. He cleared about $38,000 a fortnight.

Officers began searching the house slowly and carefully.

Specialist officers were brought in and a special laparoscopic camera - usually used for keyhole surgery - was used to peer behind walls, into the floor and the ceiling.

Throughout the house, small holes have been drilled in the walls at regular intervals. Light fittings have been lifted out to allow the fibre optic camera to peer into the cavity between the two-storey flat's floors.

Upstairs, beneath the shower, they began to find the proceeds of what they believe is New Zealand's largest welfare fraud. In a hidden cavity, there was $200,000 in cash, and 12 gold bars weighing a kilogram each, and each worth $31,000. They also found six more smaller gold bars, worth about $600 each.

Then they turned to the garden. Neighbour Robyn Lonsdale said the point at which she knew police officers searching the garden found $750,000 in $50 notes was unmistakable.

"I just heard the excitement and one of the police was congratulating the others. 'Hooray, I found it!'."

Lonsdale saw police carry out a large, plastic-wrapped package, which they hosed off. It contained $750,000. The search went on. Lonsdale said she could hear the "banging and crashing" of police trying to search inside the walls and ceiling of the flat.

West Auckland's Inspector Pieter Roozendaal ran the operation, which included all the furniture and computers found inside the house being taken away for further examination.

The house has been elaborately remodelled inside and Patterson made use of his skills as an electrician to install top-quality security and home entertainment systems.

"You could tell he was loaded from all the stuff in his house," said neighbour Natalie Mansell.

Upstairs, in his office, there was still extensive wiring for the home computer system. In the office were charts for investments - Patterson has been known to invest heavily in the sharemarket.

There was also a large collection of stationery, as if he ran a business from home. A small label-making machine, capable of producing professional-looking address stickers, was on one desk while another desk held extensive internet site development software. There were envelopes and unused Fedex packages, and a calendar in which occasional dates were marked with a blue pen.

The repercussions are massive and embarrassing for three major government departments. Work & Income - administered by the MSD - is facing questions about how the scale of alleged fraud went unnoticed for so long.

The Department of Labour, which administers Internal Affairs, will probe how Patterson had a number of passports while Land Transport will be forced to review - again - its procedures for granting driver licences.

The Herald on Sunday has learned that Patterson will be accused of exploiting a hole in Work & Income's system. Investigators believe he began by applying for sickness benefits - then switched to superannuation. The pension is one of the few benefits left which do not face regular reviews. For sickness beneficiaries, regular doctor visits are required. Unemployed people face regular job interviews.

To support the prosecution case, police will use surveillance of Patterson to show his movements, and point to disguises found in the ceiling. "Old man's clothes," said one.

They believe Patterson used the clothing to convince staff at Work & Income that he was at least 20 years older than he was.

Investigators also face having to unravel the means by which the multiple identities were created. They will allege that Patterson was able to obtain birth certificates that had gone missing in a burglary of a Births, Death and Marriages office. It is believed that Patterson then used those to obtain driver licences - then bank accounts and passports.

Robyn Lonsdale, who runs a business in the neighbouring unit, said Patterson was as nice a neighbour as she could have hoped for. "He told us he was a gold trader on the internet. Who knows? He may have been.

"He was a gentle fellow, kind of shy but pleasant and neighbourly. There wasn't an unkind word you could say about the fellow."

Once when Lonsdale locked herself out, Patterson was quick to help. "He showed me through the garden. It's very nice. He has some exotics, palms. It's very exotic. He's put a lot of work into it."

She said she did find it unusual he would lavish so much expense on a rental property. "I was interested in what sort of arrangement he had with the landlord. He did up the whole flat."

The landlord, who only wanted to be known as Paul, said he was "gobsmacked" about the alleged actions of the man he considered "Mr Perfect".

"You couldn't have wished for a better tenant. If all my tenants were like him it would be nirvana. He improved the place as if it were his own," he said.

Paul said he had just been speaking with Patterson when the police arrived. As they chatted about a tree that was dropping leaves in the gutter, a man with a dog wandered down the long drive and back up again. Paul challenged him about walking on to private property - but the man ignored him and carried on.

Then the police arrived en masse. The detectives in suits, ties blowing as they walked "looked like a Jehovah's Witness or Mormon training course, all jackets, suits and ties. I thought maybe they're hitting the place in bulk", said Paul.

Stern-faced officers would not tell him why they were searching the property. Paul asked after "Graham", and an officer asked: "Is that what you know him as?"

One officer told him it wasn't drugs while others began searching the car, waving a blue light over surfaces. It wasn't until days later that Paul was able to discover the charges Patterson was facing. Until then, he fretted about the nature of the crime his tenant was accused of.

"I thought, is it porn? He did have some computers there. But I couldn't believe that of him either. You wouldn't pick it. He's such a nice guy. Everyone liked him."

It turned out not to be porn. Paul continued: "He was the perfect tenant. The rent always got paid. He was so nice and quiet that when I needed a tenant for neighbouring properties I had to make sure they were quiet for Graham. He was just Mr Perfect."

Paul said the work that had gone into the garden seemed almost like therapy, and he supported it because he thought it was helping Patterson over a breakdown.

Eventually, when yet another enormous palm was moved in, he asked: "How much more Graham?" "It became like a life's work for him."

Paul also met with Patterson's parents, Tom and Anne, who live in Carterton. He said they were "distraught" when they came to Auckland. Patterson had assumed they could stay in his flat, but they had to move into a motel in Mt Eden because police were still searching. "They're nice country people," said Paul.

After visiting Mt Eden Prison, Patterson's parents said their son was well, but worried about his tropical fish. "There were tears in his eyes" as he explained there was only enough food in the tank to last a few days.

Tom Patterson, back in Carterton yesterday, said: "I don't believe anything that we say can help him."

He confirmed they had travelled to Auckland to visit their son in prison.

Asked how he was doing, he replied: "How would anyone be doing in a place like that?"

- HERALD ON SUNDAY

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