A despicable crime

Theft by an employee is always to be regarded as a serious crime, and not just because it undermines the principle of trust.

Employees who steal do so in unique circumstances, because they have extraordinary opportunity not usually available to common thieves, and very often the ability to conceal their crime, at least for a time.

And in the age of the computer, theft can often be very difficult to identify, let alone trace a culprit who may be in a position to move funds electronically and to hide or otherwise disguise their efforts.

The courts usually recognise the particular nature of employee crime by the severity of the sentences imposed, but in the case of Michael Swann and Kerry Harford, Justice Stevens was faced with quite unprecedented circumstances.

First, the crimes of Swann, especially, were those of cunning calculation, carried out from a position of absolute trust and significant authority, involving a sum of money unimaginable to most people.

His outside accomplice, Harford, was willing to engage in and continue such a colossal enterprise over a period of years.

Second, Swann and Harford robbed a public institution, not some private enterprise, and thus stole from all taxpayers, rich and poor.

Third, the institution was a hospital board, that is to say, an entity dedicated to the sick and injured, where no "profit" is expected and where every cent of income is desperately important - literally life-saving.

In the annals of so-called "white collar" crime in this country there has been no more despicable example.

Like all conmen, Swann was smart - supposedly with exceptional expertise in computers - and possessed of a dominating personality.

The scheme he devised was simple enough, providing no-one in a more powerful or knowledgeable position than he then was, as the Information Technology manager, made the effort to check what was going on.

Only when that did happen was the fraud exposed.

As to the difficulty of establishing its criminality, it is notable that when first presented with suspicion of what seemed initially to be highly complex circumstantial evidence, the Dunedin police declined to investigate.

The Serious Fraud Office, with its special skills and powers, was finally the agency to put Swann and Harford behind bars.

Much criticism has since flowed towards the administration of the Otago District Health Board and its predecessor.

How could such a large-scale crime take place undetected "under the noses" of auditors, audit committees, governing boards, and managers? The fact of the matter is that it was detected, eventually.

And as soon as it was detected, action was taken to terminate Swann's employment and to seek redress, both for the crime and for restitution.