More than $3 million was paid into the bank accounts of an illegal overstayer who was allegedly kidnapped when he threatened to expose the tax fraud scheme. He told IRD investigators but they never alerted the police about the violent ordeal. Illustration / Paul Slater
Inland Revenue failed to alert the police about the alleged violent kidnapping of a whistleblower after he threatened to expose a multimillion-dollar tax fraud scheme in the kiwifruit industry.
The lack of disclosure from the tax department meant that detectives only learned about the alleged kidnapping of the illegal migrant 18 months later when the Herald started asking questions about the case.
The costly delay has hindered the eventual police investigation and disappointed the alleged victim.
Poor information-sharing between government agencies has been highlighted as the greatest barrier to New Zealand’s ability to tackle organised crime, according to a panel of experts advising Cabinet ministers earlier this year.
“This is a textbook example,” said Steve Symon, the chair of the ministerial advisory group on organised crime.
“Sadly, this is almost a cliche in terms of a breakdown in communication between agencies. A situation like this needs a combined team effort between Inland Revenue, police and Immigration New Zealand…so a complainant can come forward and know they’re going to be safe.”
A Herald investigation previously revealed that more than $3 million went through the bank accounts of an illegal migrant recruited as a ‘money mule’ while working under-the-table as an orchard labourer.
The money was deposited into his accounts in sums of up to $10,000 nearly every day over a six-month period, then withdrawn as cash by the ‘money mule’ on behalf of a group he called ‘The Syndicate’.
But when he threatened to expose the tax evasion scam, the ‘money mule’ claimed he was kidnapped in November 2023, assaulted and told to keep quiet or he would be killed.
With the encouragement of a supporter, the 33-year-old approached Inland Revenue and was interviewed about the tax scam by Tauranga-based investigators the following month.
He also told them about the kidnapping and was reassured that they would refer his complaint to the police for further investigation, as Inland Revenue had a duty to report serious harm.
However, Inland Revenue did not report the alleged kidnapping.
Detectives in the Tauranga CIB only learned about the kidnapping complaint through a Herald investigation in May, then moved swiftly to interview the ‘money mule’ within a week.
This meant nearly 18 months had passed since Inland Revenue first learned of the serious criminal allegations and potentially jeopardised the gathering of evidence.
Last week, Detective Sergeant Aaron Williams said the investigation was ongoing.
He declined to comment on specific details but confirmed the case was opened only after the alleged victim made a complaint directly to police.
The alleged kidnapping victim told the Herald that the Inland Revenue staff said they would pass his complaint to police, and he trusted them to do so.
Wishing to be identified only by his surname, Singh entered New Zealand on a student visa which had expired in 2017.
As time went on, he did not report the alleged assault to the police at the time because, as an illegal immigrant, Singh was scared about being deported or going to prison in New Zealand himself for money laundering.
So he waited. When Singh eventually learned that Inland Revenue had not told the police about his complaint, the ‘money mule’ said he felt betrayed.
“I trusted them. Now I don’t feel safe,” he said.
A spokesman for Inland Revenue declined to explain why the alleged kidnapping was not reported to police, citing clauses in New Zealand’s tax law which states “all sensitive revenue information” must be kept confidential.
“Section 18 of the Tax Administration Act prevents us from commenting on matters specific to individual taxpayers so we will not be responding to these questions.”
A spokeswoman for Simon Watt, the Minister of Revenue, did not respond to a request for comment.
Inland Revenue and the police have a memorandum of understanding which allows information to be proactively shared for the prevention, detection and investigation of serious crimes.
However, such legal frameworks are not applied consistently across government agencies, according to one of the ministerial advisory group’s reports to Cabinet Minister Casey Costello.
The expert panel heard “repeatedly” that constraints on information sharing meant law enforcement agencies could not keep pace with the rapidly evolving criminal landscape.
“As we have said before – organised crime can move at the speed of digital technology, but enforcement agencies can only move at the speed of the law,” the panel wrote in July.
“The public reasonably expects government agencies to use information that it has collected to lawfully target organised crime, both domestically and internationally. That requires the information to be proactively shared. That is not happening.
“There also appears to be a deeply rooted culture of a risk-averse approach towards proactive sharing of information.”
In particular, Inland Revenue (IR), which holds tax records that can be crucial to investigations into organised crime, was singled out for mention.
“IR has told us that it recognises the approach it has traditionally taken to information sharing may have been too conservative, and there is scope to be more pragmatic,” the expert panel wrote.
“This mirrors feedback we received from a number of other government agencies.”
The advisory group recommended the establishment of a national plan, rather than separate ones for individual government departments, to clearly set out what information can be shared.
This national framework should be accompanied by a “data lake” – a platform, or centralised repository, to make the data easy to search.
To move away from a risk-averse culture, the panel also recommended that information-sharing benchmarks be set as performance measures for the chief executives of government departments.
Those leaders would then be held accountable for meeting those targets by a proposed government minister with a dedicated focus on organised crime.
This proposed ministerial portfolio would need to be backed up by a new oversight body, similar to how the Serious Fraud Office or Canterbury Earthquake Recovery Authority were established in response to an emerging threat.
With this support, the minister would be expected to push new laws and policy development, hold agencies to account, lead public awareness campaigns and targeted social investment in vulnerable communities.
While the government considers the broader policy changes needed to fight the threat of organised crime, the ‘money mule’ waits to hear whether the police will charge anyone for kidnapping him.
In the meantime, Singh fears being deported back to India.
The ‘money mule’ came here in 2013 on a student visa.
A subsequent visa application was declined by Immigration New Zealand in 2017 because of false documentation, which Singh says was supplied by his agent in India.
Two other visa requests made in 2021 and 2024 were also refused.
Earlier this year, Singh made another application to Chris Penk, the associate Immigration Minister, asking him to exercise his discretionary powers to grant a visa.
However, the minister refused to intervene.
Penk told the Herald that he would not comment on specific cases but, in general terms, confirmed that a visa applicant giving evidence as a prosecution witness could be a relevant factor.
“I note that a deported individual can still assist with a New Zealand investigation from offshore,” Penk said.
“Immigration New Zealand may also cancel or lift any period of prohibition and grant a temporary visa to allow them to return to New Zealand as a witness in a prosecution.”
Singh plans to make another application to Penk to give him another chance.
“I am frightened about what might happen to me back in India.”
Jared Savage covers crime and justice issues, with a particular interest in organised crime. He joined the Herald in 2006 and has won a dozen journalism awards in that time, including twice being named Reporter of the Year. He is also the author of Gangland, Gangster’s Paradise and Underworld.