Police have frozen a central Auckland apartment after charges were brought alleging large-scale defrauding of the wage subsidy scheme.
The two-bedroom, 53 square metre apartment on the 16th floor of Grafton’s St Martin’s Apartment Building with a rateable value of $520,000 was bought by company Auckland Holdings Limited in May 2020, just months after nationwide lockdowns and the accompanying wage subsidy scheme began in response to the start of the Covid-19 pandemic.
When the property deal was concluded the company had Hun Min Im as its sole director and shareholder.
In August last year Im, 35, was charged by the Serious Fraud Office in the Auckland District Court with making dozens of false wage subsidy applications, and earlier this month was charged with dozens more offences concerning alleged attempts to rort other Covid support payments like the small business cashflow scheme and resurgence scheme.
Im has pleaded not guilty to all charges, and this week did not respond to Herald requests for comment about the case or the restrained apartment.
Property records show the apartment in question was in December slapped with a restraining order under the Criminal Proceeds (Recovery) Act, with the order later amended in February.
The standard of proof is different for this legislation than it would be to determine guilt in criminal proceedings and property can be restrained before criminal wrongdoing is established.
Prosecutors have filed 95 charges in total - ranging from obtaining by deception, dishonestly using a document, and forgery - alleging Im improperly received $624,000 in support payments and tried claiming $2.3 million in total.
Many Covid support payments that totalled nearly $20 billion over the past few years relied on what was described as a “high trust” model that emphasised speed of delivery and wide uptake as the Government scrambled to rapidly roll out policies to cushion pandemic fallout.
Since then, audits of Covid-related support payments have occupied more than a hundred staff in various government departments, and have seen more than 30 people charged with criminal offending and Inland Revenue demand nearly $8m in repayments.
While dozens of cases of wage subsidy fraud are before the courts, the case of Im is the only one of sufficient scale to have been referred to the Serious Fraud Office.
At the time charges were first laid SFO director Karen Chang said: “We work hard to protect New Zealanders’ economic wellbeing. The theft of public money is a serious crime which diverts government funds away from where they’re most needed. This is particularly acute in times of crisis, such as during a global pandemic.”
Ministry of Social Development (MSD) group general manager George Van Ooyen earlier this month told the Herald: “We take our duty to taxpayers seriously and are committed to pursuing legal action, where appropriate, to recover any misused wage subsidy funds.”
He said that at its peak over the past three years, the ministry’s wage subsidy investigation team had 100 staff, and even today it still totalled 50. More than 15,000 wage subsidy applicants had been subjected to post-payment audits.
“We continue to review and investigate applications where potential fraud or incorrect payment has been identified,” he said. “We expect more court cases to follow as we continue our investigations, which involve a mix of individuals and businesses.”
A month into the pandemic Inland Revenue took over delivering core Covid support schemes, and last year began running its ruler over claimants seeing nearly 400 served with demands to repay.
“There were some businesses, having received the payments, that applied them for purposes outside the remit of the schemes,” an Inland Revenue spokesperson said.
These clawbacks and prosecutions, however, account for only around 0.1 per cent of both the total Covid support payments and the number of recipients which covered more than half of New Zealand’s working-age population at their peak.
If Im is found guilty of the offences, police would be able to apply to courts for the restrained property to be forfeited where it would be sold and the proceeds seized. However, the property is also subject to a caveat by Pioneer Finance that pre-dates the police restraint order.
Police were tight-lipped on their actions restraining Im’s assets, and declined to provide details of the extent of their financial dragnet and whether it covered other assets.
“The matter is still before the court,” a spokesperson said. “As such, police are not in a position to comment at this stage.”
Im is next scheduled to appear in court on May 19.