Alex Swney pleads guilty to a further $2.5 million fraud

Alex Swney, the former boss of Auckland business organisation Heart of the City, has pleaded guilty to further fraud charges of more than $2.5 million.

Mr Swney appeared in the Auckland District Court this morning to answer a charge brought by the Serious Fraud Office (SFO) of dishonestly using documents.

He has pleaded guilty to the charge and was remanded on bail until his next appearance on April 30.

The maximum prison term for the charge is seven years.

Mr Swney created fictitious invoices while at Heart of the City which resulted in payments of more than $2.5 million to accounts controlled by him.

SFO director Julie Read says the misappropriation increased the cost of the services provided by the organisation and reduced the benefits delivered by it.

“Fraud of this size by employees who are entrusted with the management and expenditure of substantial sums of money is very costly for both the businesses concerned and more broadly for the community as it harms the integrity of these organisations,” she says.

In January, Mr Swney also admitted to charges laid by the IRD covering $1.8 million in unpaid taxes.

He had initially denied the charges last year but after switching lawyers to Murray Gibson changed his plea.

The IRD also alleges Mr Swney owes $1.4 million in penalties and interest.

Mr Swney will be sentenced on four of the original IRD charges this month, after another 34 initial charges were dropped.

He also faces civil proceedings by Heart of the City’s board, which undertook an independent investigation when the allegations surfaced.

Heart of the City is mostly funded by targeted business rates and its purpose is to promote business in the Auckland CBD.

In its most recently available annual report for 2011-2012, the organisation records receiving $4.47 million in revenue.

Earlier this year the association teamed up with Auckland Tourism Events and Economic Development (ATEED) to fund a domestic tourism campaign.

It also had funded the Whitcoulls Santa each Christmas, but NBR Rich Listers the Mansons and SkyCity are now funding the statue for five years.

Mr Swney had been at the helm of the business association for more than a decade.

In 2007 he unsuccessfully ran for mayor of (then) Auckland City Council, which he lost to John Banks. 

hmcnicol@nbr.co.nz