New joint fraud initiative uncovers welfare fraud

Associate Social Development Minister Chester Borrows today congratulated Police and the Ministry of Social Development on a joint investigation which has uncovered a sizeable welfare payment fraud out of South Auckland.

As part of the government’s new interagency fraud group, the Welfare Fraud Collaborative Action Programme, MSD and Police worked together on a case involving a bogus dental practice and hundreds of thousands of welfare dollars.

Police have arrested a 48 year old man and 51 year old woman as part of ‘Operation Novocaine’ and they face deception and other charges. They are being held at the Manukau Police Station overnight and will appear in the Manukau District Court tomorrow.

“Police worked closely with the Ministry of Social Development after it uncovered a scam involving beneficiaries who falsely claimed for emergency dental treatment,” says Mr Borrows.

“Providing false documents the pair allegedly took a 25 per cent cut of each payment. In total $375,000 was paid out since December 2011. The vast majority of the payments were benefit advances and the beneficiaries in the main are repaying these out of their regular benefit payments. The small number who received grants will also now be required to repay the money.

“The Ministry of Social Development has changed its payment processes so that an operation like this would fail to meet the new standards.

“The government takes fraud extremely seriously and has ever increasing tools and information sharing that will ensure people ripping off taxpayers will be caught,” says Mr Borrows.

The Welfare Fraud Collaborative Action Programme is one of three new initiatives announced earlier this year to prevent, detect and catch welfare fraud. More details can be found at ww.beehive.govt.nz.