2009: Swann jailed for 9 years, 6 months

March 12: "Fraud on a grand scale" was how Justice Lyn Stevens yesterday described the actions of former Otago District Health Board chief information officer Michael Swann and his friend and business associate, Kerry Harford.

The two men were each appearing in the High Court at Dunedin for sentence after being found guilty of defrauding the board of almost $17 million.

Swann was jailed for nine years and six months, with a minimum non-parole of four years and six months.

Harford was jailed for four years and three months.

Swann, wearing a crumpled suit, and Harford showed no reaction as the sentences were handed down. The pair have been in custody since last December.

The maximum penalty available to the judge was 21 years, a total of seven years on each of three charges of fraud.

Justice Stevens told Swann: "The cause of your predicament is undoubtedly your sustained and blatant dishonest behaviour and astonishing greed."

"It [the fraud] affected not only the ODHB as your employer, but also indirectly the patients of the board, and the wider community."

This was likely the largest fraud in New Zealand history and was perpetrated in the area of public health, where financial resources were particularly scarce, he said.

He could not "underestimate the erosion of confidence in the health system" the fraud had caused, he said.

"In Mr Swann's case, it is harder to think of a more serious and cynical breach of trust of an employer," Justice Stevens said.

No reparation orders were made. The health board is pursuing a civil case to recover money from Swann.

Justice Stevens said the outcome of the civil case could not be predicted and he had been left in a situation where he could not make a reparation order.

Harford reached a confidential settlement with the board before the trial began.

Swann (47) and Harford (48), a Queenstown surveyor, sent 196 invoices from Harford-owned company Sonnford Solutions Ltd and its predecessor, to the board for computer-related services that were never provided.

They received payments totalling $16,902,145.27.

Harford retained 10% and forwarded the remaining 90% to Swann-linked companies or entities.

Counsel for Swann, John Haig QC, said Swann was remorseful and had brought himself and his family into serious disrepute.

He was "deeply regretful" of the distress he had caused his colleagues.

Mr Haig took issue with the victim impact statement, which said the defrauded money could have been used for surgery or more nurses.

"My instructions are that is completely wrong. The money that was taken was health administration money."

While there was no denying much of the money had been spent on property - "not spectacularly luxurious property, I might add" - boats and cars, there was "no real Champagne lifestyle".

No assets were held in Swann's name, and all family assets were held in his wife's name.

Justice Stevens said he was "concerned at the lack of steps" Swann had appeared to have taken to address reparation.



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