The often controversial Serious Fraud Office will close its doors, with the government’s announcement that its job will be subsumed into a new Organised Crime Agency under the control of the New Zealand Police.
The decision to disestablish the SFO appears to have been taken swiftly: only three months ago, advertisements appeared for a replacement for the SFO’s outgoing director, David Bradshaw, and it received a big funding boost in May’s budget.
But now the minister in charge of the SFO, Michael Cullen, is suggesting that the connection between organized crime and fraud is too complex for the SFO to handle.
This is the reverse of the usual argument that serious and complex fraud is too specialized for the police.
He maintained in a press release that “modern fraud offending … is so complex that the demarcation between fraud and other forms of organised criminal activity is no longer a clear one.”
The SFO’s old task of investigating and prosecuting complex and serious fraud will be handled by the new Organised Crime Agency, a division of the police.
The OCA is part of the government’s commitment to fight organised crime, and in particular gangs.
The SFO has been criticised for its record in major defended cases, although its overall success in prosecutions is around 90 per cent since its establishment in 1990 in the wake of prominent white collar crime cases.
This year, however, it failed in the high profile prosecutions of former immigration minister Tuariki Delamere, and a case dating back to the 1990s “Salisbury” forestry scheme.
In this year’s budget, the SFO was allocated another $1.475 million to administer the government’s Criminal Proceeds (Recovery) Bill.
Ironically, that bill is intended by the government to be one of its chief weapons against organised crime, allowing the crown to confiscate assets it suspects have been acquired through criminal activity, although no specific charges can be brought.
In an interview in June Mr Bradshaw said that that responsibility "really reflects the maturity of the place. Ten years ago we wouldn't have been given that task” and that the responsibility was testimony to the calibre of his 35 staff and a great achievement to go out on.
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