Alex Swney spent decades mixing with the elite of Auckland society, business and politics. Photo / NZME.
When the cracks first appeared in his public facade, Alex Swney presented a strong front. When name suppression covering the high-profile Heart of the City boss was lifted in October, revealing he was being prosecuted by the Inland Revenue Department on 39 counts of tax evasion, Swney was flanked by his wife Angeline and David Jones, QC.
But four months later, appearing at the same court, Swney was this time alone, except for his new lawyer - the legal aid-qualified Murray Gibson.
He was spared some embarrassment - verbalisation of his new pleas of "guilty" was taken by Gibson - but the turnaround from his denials of last year, and decades spent mixing with the elite of Auckland society, business and politics, marked a sudden fall from grace.
He was unflinching in the dock when Judge Grant Fraser made it clear a prison term would be the "inevitable" outcome of more than a decade of offending relating to more than $3 million of undeclared income.
But at his Grey Lynn home after the hearing, there was at least a flicker in his normally unwavering enthusiasm when the prospect of prison was mentioned.
From the case's infancy, the Herald has talked with Swney, requesting a full interview, but the threat of affecting a fair trial - even though it would have been without a jury - was enough to put him off.
He did not want his story in the paper, but through several conversations, it was obvious part of him was desperate to have his say, to quash the allegations. Since he set up Heart of the City in 1994 he has had free reign commenting on issues affecting Auckland and its inner city businesses and it clearly distressed him to be gagged.
Though the specifics of these conversations cannot be detailed, he thoroughly maintained his innocence and appeared totally flummoxed to end up at the centre of such a scandal.
Leading up to this week's admission of guilt, he gave no indication of his change of heart and even after the hearing seemed upbeat.
Declining to go into details of the offending or give reasons for it, he has distanced himself from claims made by IRD that he "knowingly" did not provide information regarding his taxes.
Swney's trademark scooter and long, parted gray hair became a regular fixture at Auckland's elite business and social gatherings. Photo / Michael Craig
After his plea, Gibson moved to draw a line under myriad legal actions engulfing his client - including a civil action brought by Heart of the City to recover payments made to their former chief executive, and a related probe by the Serious Fraud Office into allegedly falsified invoices.
"We're taking all steps to make sure all matters are resolved [by the April sentencing date] including making contact with other authorities," he said.
"It's in the absolute interests of everyone that all matters get resolved at the same time."
In a final humiliation, before fleeing out a back door of the court to avoid the attention of the media he once welcomed, Swney was ordered to surrender his passport after Judge Grant ruled him a flight risk.
The rapid and intentionally low-profile departure from court was in stark contrast to the actions of a man once described as "flamboyant" and "charismatic". Through his role as founder and front of Heart of the City - a inner-city retail lobby formally set up in 1994 - Swney gained friends and clout.
His trademark scooter and long, parted gray hair, became a regular fixture at Auckland's elite business and social gatherings, and his presence grew to the point where he was able to come a credible third in the 2007 mayoral race, trailing John Banks and Dick Hubbard.
His campaign pitch - a crowd-pleasing complaint that Aucklanders were overtaxed and a plan to redirect a portion of GST to councils to improve local body finances - would now be impossible for Swney to repeat with any credibility.
The end for Swney came after an almost routine inquiry from the Inland Revenue Department, after Heart of the City tried claiming back GST paid on an invoice from nondescript security company Security Management Services.
The problem? The GST number didn't exist. And, according to the companies office, neither did Security Management Services.
This small thread, tugged on over the next two years by tax department investigators, uncovered an alarming pattern of activity. Investigators discovered the submission of false invoices in the name of organisations including the New Zealand Herald, that saw Heart of the City make payments into accounts controlled by Swney. Some of these accounts were in his name, some in his wife's. Still others were controlled by an entity called the Country Style Trust.
As Inland Revenue probed deeper, Heart of the City made some minor, but telling, disclosures in its annual report. In its accounts for 2012 and 2013, two companies that would later form a key part of Inland Revenue's case - Auckland Group Procurement Services and AGS Services - were added to the register of related-party transactions.
At the same time, Heart of the City made a minor addition to the notes in its Annual Report, adding the two companies to its list of related-party transactions.
Payments into Swney's accounts totalled around $3.3m over the 12-year period in question - around $280,000 annually - and none of these payments had been declared to Inland Revenue, leading to claims of $1.8m in unpaid GST and income tax, and ongoing interest by the Serious Fraud Office in his fictitious invoices.
Joanna Doolan, the tax director of advisory firm EY, expresses disbelief at Swney's conviction and says the details, or rather the simplicity, of the prosecution case was "weird".
Most cases of tax evasion that reach the courts focus on over-elaborate structures designed to push the boundaries of how much tax could be legally avoided, rather than - as Swney did - simply failing to pay tax or file returns for decades at a time.
Swney is now a 'ruined' man. Photo / File
"It's completely unreal. What was he thinking? And secondly, why wasn't it picked up earlier?"
The consequences of conviction were likely professional and politically terminal for Swney, Doolan said. "The guy is ruined. He probably won't get any sort of public work or private work, ever again," she says.
The harm has also spread, with Heart of the City grappling with the downfall of its founder and chief executive and filing civil recovery action in the High Court.
Former Heart of the City chairman Peter Cammell is anguished at the sudden conversion of the organisation's chief executive from public figure to tax cheat.
Cammell, who served on the Heart of the City board between 2004 and 2010, was shocked to hear details of Swney's offending and said the sums involved were far in excess of what he understood the chief executive was supposed to be paid for his part-time position.
"His monthly billings [for his work as chief executive] were not at that level," Cammell said.
The chief executive's job was part-time, as Swney spent a considerable part of his week working for his wife's Briarwood shoe and handbag business.
"That's why he was able to claim he was an independent contractor, and not an employee," Cammell said.
In hindsight, oversight of Swney was insufficient, particularly as the organisation grew. According to accounts filed to the Companies Office, revenue for Heart of the City, 85 per cent provided by ratepayers, had grown from $1.7 million to $5 million between 2000 and 2013.
"The challenge is you have very much a part-time volunteer board administering an organisation with significant sums of money going through it - and an executive that has access to the business 24 hours a day."
The track will stay closed until safety is confirmed, says DoC.