SFO elated as conman jailed for nine and a half years

Michael Swann and Kerry Harford

The Serious Fraud Office says it is "very pleased" to see fraudster Michael Swann jailed for nine and a half years.

Swann, 47, was given the longest prison sentence ever imposed in an SFO case after he stole almost $17 million from the Otago District Health Board. The board's former chief information technology officer, he was sentenced in the High Court at Dunedin yesterday.

He and Queenstown surveyor Kerry Harford were convicted of defrauding the board out of $16.9 million.

Justice Lyn Stevens ordered that Swann serve at least 4 years. Harford was jailed for four years and three months.

SFO acting chief prosecutor Anita Killeen said the case "was of great significance, not just for the community of Dunedin but for the Serious Fraud Office. The Serious Fraud Office is very pleased with the outcome of the hearing."

The SFO sought a cumulative sentence, which meant Swann, considered the ringleader, could have been jailed for 21 years if he had been given the maximum of seven years on each of the three charges. He faced three representative charges involving 196 instances of false accounting and deception.

Ms Killeen said the SFO knew the maximum would not be given and had sought 10 years given the "totality of his offending".

Both men were found guilty by a High Court jury last December after their multimillion-dollar fraud, which lasted six years.

Harford's company, Sonnford Solutions, invoiced the board for IT-related services it never received and took about 10 per cent of the $16.9 million paid out.

Swann was considered the mastermind but could not have committed the fraud without Harford.

The judge said the case was without peer. The offending was on a grand scale and there was no established benchmark for sentencing in such a case, he said.

The trial heard Swann received about $15 million and spent a lot of that on cars, boats and property.

Health Minister Tony Ryall said after the trial that there had been systems failures at the board. He asked how Swann could park his Lamborghini next to the health board Corollas without setting off alarm bells.

The trial heard that people had asked questions. The judge said those who asked the questions were bullied by Swann's arrogance and oppressive approach to staff.

Last month, Mr Ryall removed board chairman Richard Thomson, saying he was accountable for the $17 million fraud and calling it the largest in New Zealand state services history.

The board paid $1.3 million in legal fees and other expenses in the case.

- NZPA