Four men are set to face trial in Wellington later this month over an alleged pokies fraud thought to be worth around $30 million. The men—prominent harness racing figures Patrick and Mike O’Brien, former hospitality consultant Paul Max, and an unnamed former gambling inspector—are charged with a total of 32 counts of obtaining benefits of more than $1000 by deception, a charge which carries with it a maximum prison sentence of up to seven years.
The unnamed man has already entered a not guilty plea and will face a judge-only trial, while the other three are yet to register their pleas. All four men are currently remanded on bail.
In one of the biggest fraud cases ever to be tried in New Zealand, the men are facing charges relating their dealings with a Blenheim-based gambling trust as result of Operation Chestnut, an investigation by the Serious Fraud Office, police and the Department of Internal Affairs into gaming grants. A number of gaming venues in Blenheim, Wellington, Hawke’s Bay and Masterton were also investigated.
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It is alleged that the fraud relates to the establishment and operation of a pokies trust that was not administered in accordance to the strict regulations that govern them, particularly in relation to returning money to the community which is then used to fund social and health services, and also that gaming venue licences were obtained by deception.
Patrick O’Brien, 80, the former chairman of Harness Racing New Zealand, has claimed that the Blue Grass Trust, the pokies trust that he established and that is at the centre of the allegations, was created so as to raise funds for racing, including money which was then used as stakes, a sport which Mr O’Brien claims has little or no other funding and is being taxed by the government so heavily that racing clubs do not have sufficient resources remaining to be able to survive.
He suggested that it was necessary to create a pokies trust specifically to benefit horse racing because other existing trusts had been “scared off” by politicians and were no longer making as many grants to racing clubs, as well as the fact that society has changed and horse racing no longer attracts the crowds and, more crucially, the betting turnover it once did. Mr O’Brien also suggested that casinos and pokies were responsible for the decline in betting and racing, and that setting up a pokies trust was therefore a legitimate way to recoup lost revenue that once would have come into racing.