Lax systems allowed ‘planned and premeditated’ crime to go undetected.

A welfare cheat investigator who stole nearly $360,000 via benefit fraud would not have been caught unless a whistleblower came forward, according to a review of the crime.

Nabjeet Singh created four fake beneficiary identities and collected payments over 12 years when he held different roles at the Ministry of Social Development.

He resigned in 2011 and left for Australia, until his crimes were discovered in 2013 and he was extradited back to New Zealand.

Singh pleaded guilty to 51 charges - 41 of using a document to obtain pecuniary advantage and was sentenced in September to two years and nine months in prison.

Advertisement

"Your offending cannot be classed as anything less than a serious case of fraud," Judge Peter Hobbs said in the Wellington District Court.

"Very slack" was how Singh's lawyer Robert Lithgow, QC, described the MSD systems which his client manipulated to steal $358,866 between 1998 and 2010.

Documents released under the Official Information Act show MSD officials were sensitive to the public perception of how Singh, now 48, was able to get away with the crime for so long.

"The way in which Nabjeet committed this fraud made it very difficult to detect. Our investigation had identified high levels of concealment, obstruction, premeditation and planning," according to an internal memo dated August 2014.

"The Ministry's internal fraud detection tools that were available at the time would not have been able to detect this type of fraud. It is likely the only way the fraud would have been uncovered would have been through an anonymous tip-off."

That tip-off came in January 2013. The whistleblower alleged Singh's partner - who also worked at MSD - was receiving financial assistance from IRD under a fictitious name.

She resigned two months later but the allegation unravelled Singh's long-running fraud.

Checks with Immigration New Zealand and the Department of Internal Affairs confirmed the individuals apparently claiming benefits did not exist.

The supposed children of those beneficiaries - for whom they were receiving extra payments - also did not exist.

While Singh had taken steps to cover his tracks, including changing telephone numbers listed in MSD records, the welfare payments for the four different identities were paid into the same bank account.

Singh stopped creating new identities after MSD introduced identity matching, but the data mining still failed to detect the false identities.

Merv Dacre, deputy chief executive of corporate solutions at MSD, said new "pro-active" data mining tools had been introduced since Singh's crime to better identify potential staff fraud.

The internal review of Singh's fraud found other failures in MSD systems.

Before working as an investigator, Singh was a case manager with full rights to access and process payments. This level of access was not changed when he started the new role.

"He exploited this and continued to grant and process financial assistance for the fake identities he created," said Kate Wareham, the author of the 2014 memo.

A review of all staff in the Integrity Unit discovered no other fraud.

Anyone who transfers into an investigation role now automatically loses any previous, high level access rights.

Another weakness highlighted in the internal review was the fact Singh and his partner were allowed to resign, with immediate effect, while under investigation.

The pair were described as a "small minority of cases" where staff were allowed to resign, instead of being dismissed in line with the MSD's 'Zero Tolerance' policy for benefit fraud.

The 'Zero Tolerance' policy to prosecute staff for benefit fraud was also cited as a reason to extradite Singh from Australia.

As well as being sent to prison, Singh's home was seized by the police under the Criminal Proceeds Recovery Act.

The High Court granted a forfeiture order and $263,956 was recouped from the sale of the property.

Singh was the first MSD investigator to be prosecuted for benefit fraud, but the latest in a long line of fraudsters who have swindled the social welfare system.

Some like Colin Diedrichs used the identities of dead children to apply for benefits, others have claimed the pensions of dead family members.

The most prolific was career conman Wayne Thomas Patterson who used 123 fake pensioner identities to steal $3.4 million over two years - or $56,000 a fortnight.

Colin Diedrichs was jailed in 2012 for stealing identities of dead children to claim benefits. Photo / Dean Purcell.
Colin Diedrichs was jailed in 2012 for stealing identities of dead children to claim benefits. Photo / Dean Purcell.