This story gets more bizarre as the story rolls on each new day. We first are made somewhat aware in May when a high-profile Aucklander is granted name suppression on some charges brought by some public authority. Then we see the headlines of former Heart of the City CEO Alex Swney is up on 39 charges of tax evasion brought on by the IRD. Swney as a result has his contract terminated by HotC and the forensic accountants brought in to have a look. I was wondering when Council would react to the situation and hello we have this from Todd Niall of Radio NZ:
The Auckland Council is moving to protect millions of dollar of ratepayers’ money after the head of the city’s downtown promotion agency was sacked over tax evasion charges.
Heart of the City chief executive Alex Swney was sacked last week from the agency which he founded 20 years ago. It is largely funded by ratepayers and this year received $4.2 million dollars.
Mr Swney has denied 39 charges of tax evasion. Inland Revenue alleges tax of almost $1.8 million was unpaid, and a further $1.3 million is owed in penalties and interest. Some charges involve allegedly fictitious invoices.
Fast forward to 2015 and it slowly seems everything is slowing coming out in the wash.
From the NZ Herald
Swney’s $3m ticket to the high life
5:00 AM Saturday Jan 31, 2015 Rob Kidd
Weekend Herald investigation: Executive lived in multimillion-dollar homes in decade he failed to pay tax
Tax cheat Alex Swney arranged for the council-funded Heart of the City to pay him nearly $300,000 annually – despite his role as chief executive of the business lobby group being only part-time – according to Weekend Herald calculations from court documents.
An investigation into the disgraced businessman has also revealed Swney lived in a succession of multimillion-dollar homes on Auckland’s most desirable streets in the decade he failed to pay tax.
On Wednesday Swney pleaded guilty in the Auckland District Court to four representative charges of tax evasion comprising of $1.8 million in unpaid tax, and a further $1.2 million in interest and penalties, accrued between 2000 to 2012.
The Weekend Herald has calculated the amount of money Swney would have received from Heart of the City based on the total amount of tax evasion pleaded guilty to – $1.4 million in income tax, and another $450,000 of unpaid GST.
The results, checked with two independent tax experts, suggest Swney may have received about $3.3 million of undeclared income during the 12-year period covered by the charges, equating to average annual payments of $280,000.
Heart of the City interim chief executive David Wright would not discuss the amount, saying the matter was still before the courts, but former Heart of the City chairman Peter Cammell was stunned to hear of the scale of payments.
He said the amount far exceeded what he understood what was the agreed rate he was supposed to be paid for being chief executive.
“His monthly billings [for his work as chief executive] were not at that level,” Mr Cammell said.
Mr Cammell said the chief executive’s job was part-time as Swney spent a considerable part of his week working for the Briarwood shoe and handbag business of his wife, Angeline Marshall.
“That’s why he was able to claim he was an independent contractor, and not an employee,” he said.
$300,000 for a part time CEO it has been stated (or alleged) in Court documents.
This begs some questions to both Heart of the City, and Auckland Council
Questions such as:
Where were the annual audit controls especially for invoicing and invoicing from a “contractor” (in which Swney was a contractor)
Did Auckland Council ever run risk management strategies on Heart of the City when parting with our ratepayer’s money to essentially a lobby group for which Heart of the City is (for City Centre Businesses)
Why did this evasion and false invoicing go on for as long as it did
Will Heart of the City enact stronger audit regimes to prevent this kind of disaster from happening again
Will Council run stringent risk management and audit processes upon those who it gives public money too
Speaking of risk management and audit processes Council might want to overhaul theirs especially with THIS occurring: Inquiry into council part in $1b centre
Talking Southern Auckland 