Covid-19 wage subsidy: Auckland man admits ripping off scheme

Wage subsidy claimant received $18,745 from scheme, but charges followed. Photo / 123RF

The first person charged with ripping off the wage subsidy scheme has pleaded guilty in the Auckland District Court.

This morning Mt Eden man Saleem Adbdul, 40, pleaded guilty to three charges of receiving stolen property relating to $18,745 of wage subsidy payments claimed during lockdowns in 2020.

Abdul is described in charging documents as a "senior technical consultant", and records the wage subsidy funds were paid into his personal bank accounts.

Charges were laid by the Ministry of Social Development, the government agency responsible for administering the wage subsidy scheme intended to maintain pay cheques during period of work stoppages during Covid lockdowns.

The case is understood to be the first criminal prosecution relating to improper access to the "high trust" subsidy scheme that saw $14 billion paid out to employers during 2020. The Herald is aware of at least one other prosecution of dishonest use of the scheme working its way through the courts.

A review of the scheme last year by the Auditor-General found $703 million had been voluntarily repaid by businesses who found the effects of the lockdown were less severe than feared, and another $23m had been "compulsorily recovered" by MSD.

The Auditor-General said MSD needed to tighten its oversight of the scheme, and relied too heavily on verbal confirmation of financial information provided by claimants.

"I am not persuaded that the reviews provide enough confidence that all applications that merit further investigation have been identified," Auditor-General John Ryan said in May.

Adbdul's lawyer Moira McNabb told the court the sum in question had since been fully repaid, her client had no prior convictions, and he intended to apply for discharge without conviction.

Judge Peter Winter directed Abdul to surrender his passport ahead of sentencing on April 29. The charges each carry a maximum sentence of seven years in prison.