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Major Christchurch fraud investigated

The Serious Fraud Office is looking into a possible insurance fraud in Christchurch worth tens of millions of dollars.

 
 

Adam FeeleyThe Serious Fraud Office is looking into a possible insurance fraud in Christchurch worth tens of millions of dollars.

While the SFO’s chief executive Adam Feeley would not give details of the investigation, he confirmed it had been brought to his attention by an insurer.

A handful of staff were investigating.

“Yes we do have a case in Christchurch but all we have said in relation to it is it relates to insurance,” he told Fairfax NZ

“We don’t know at this stage what the scale of it is other than our initial estimate that it appears to run into the tens of millions of dollars … (That is) the potential level of fraud.”

It follows comments by visiting disaster relief expert  Peter Dent suggesting a central agency be set up to keep a lid on fraudulent claims or corruption during the earthquake recovery.

Dent, a Canadian-based Deloitte partner, said there had been false and misleading claims following other disasters, sometimes up to 10 to 15 per cent of total claims.

Insurers in Christchurch had indicated they were concerned about fraud, and Feeley suggested they “share data better” to point out anomalies.

Fraud could be committed through collusion between damage assessors and building companies.

“Natural disasters don’t create a particular type of fraud, they just create an environment for it to happen for two reasons: one, suddenly a lot of money goes into that region that has the disaster, and two, there’s unusual pressure on organisations to solve problems and the best way they solve problems is cutting corners.”

 
 

 
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