VeriSure has been in the news on a number of occasions
SUNDAY STAR TIMES — 19 MAY 2013 Edition 1, Page 5
Ministry opens up on case against US man
By: By ROB STOCK
THE GOVERNMENT has revealed why it dropped charges against an American businessman, after an Official Information Act request from a private investigator.
The reasons included: “The defendant consents to the withdrawal of the charges.”
The American, Terry Hay, attracted the attention of the National Enforcement Unit (NEU) of the Companies Office after one of his former businesses became embroiled in allegations a fictitious liquidator was used during a debt dispute.
The allegations were never tested in court, and now won’t be. The Ministry of Business Innovation and Employment, which took over the unit’s duties, this year dropped an arrest warrant and 22 charges it had laid against Hay under the Crimes Act and Companies Act, including one charge of “carrying on a business fraudulently”.
Honolulu-based Hay is a major shareholder in the ultimate parent company of New Zealand-based flight catering company Pacific Flight Catering, which supplies in- flight catering to several airlines, including China Southern Airlines and Cathay Pacific.
He could not be reached for comment on the case last week.
The case began when a former Hay company supplying fruit for in-flight meals, Fresh Prepared, ran up a $64,000 legal bill to two Auckland barristers. When the bill remained unpaid, the barristers, Clayton Luke and Richard Harrison, tried to have the company wound up but before that hearing occurred, Fresh Prepared was put into voluntary liquidation in January 2007.
The liquidator was a Babubhai Patel of Patel & Patel, whose Auckland mailing address was PO Box 53002, the same mailbox as the one used by Fresh Prepared.
The move led the barristers to hire private investigator Grace Haden to probe Patel’s identity.
After an application was made in the High Court claiming the appointment of the liquidator was a sham, leading Associate Judge Jeremy Doogue said: “There is a serious question as to whether or not Mr Patel actually exists.”
However, further liquidation documents were filed under the name of Patel and Fresh Prepared was duly struck off in June 2010. It is understood the barristers had reached a confidential settlement with the company.
Nevertheless, an investigation led the NEU to believe Patel was not real and it charged Hay and his business partner Lynne Pryor, a former director and shareholder of Fresh Prepared. Pryor pleaded guilty to one charge of carrying on business fraudulently and was fined $18,000 and banned as a company director until July 2015.
Sentencing Pryor, Judge Josephine Bouchier said it was quite clear that “as a result of a debt owed to lawyers, Mr Haye [sic] who controlled the company’s accounts, embarked upon a systematic course of action to deregister the company to try to avoid that debt . . . It appears then however, that Mr Haye has not stayed around to face the music himself.”
An OIA request from Haden produced the following reasons why the ministry dropped charges against Hay.
There were six relevant factors behind the decision, said the ministry. These included that the victims had been compensated in full; that medical evidence confirmed the defendant suffered depression at the time of the alleged offending and had had ongoing psychological problems and serious health issues.
Another factor considered relevant was that “the defendant consents to the withdrawal of the charges”.
Haden has written to Attorney- General Chris Finlayson protesting against the decision.
New Zealand Herald — A010 — 01 Mar 2013
Blocked email claim sparks inquiry
Council chief to investigate claims he and senior staff intercepted pair’s online messages to councillors
Bernard Orsman Super City email@example.com
Auckland Council chief executive Doug McKay has been asked to investigate claims he and senior staff intercepted and blocked emails addressed to councillors.This follows claims by two people, Gary Osborne and Grace Haden, at yesterday’s council meeting that their emails to councillors and local board members had been blocked.
Mr Osborne produced an email from Mr McKay, dated June 19 last year, directing the manager of democracy services, Darryl Griffin, to “case manage” Mr Osborne.
He claimed his emails to elected representatives were still being intercepted and blocked.
“Bureaucrats should not have the power to block your emails without your authority,” he told councillors.
Ms Haden, who addressed councillors on corruption and accountability in the council, said her emails had also been blocked.
Outside the meeting, Mr McKay said the council had not blocked or censored anybody’s email.
He said that since the start of the Auckland Council, three people, including Mr Osborne and Ms Haden, had been “case managed”. He would not name the third person.
He said it was within his power to stop councillors receiving emails that contained inappropriate legal material, including one case where a person was prosecuting the council.
It was also appropriate to case-manage people who had been turned down by the council and refused to give up.
He cited one case in which one of the three people _ believed to be Mr Osborne _ rang a council officer 17 times in one hour.
Mr McKay said some councillors had asked not to receive emails from certain people and the council case-managed those.
Councillor Cathy Casey said nobody at the council had the right to block emails, it should never happen again and there should be an apology.
Veteran council protester Penny Bright, whose emails are not blocked, also spoke to councillors, calling for an independent investigation.
The council instructed Mr McKay to lift the block on correspondence until his investigation was complete.
SUNDAY STAR TIMES — 19 AUG 2012 Edition 1, Page 8
Be sure bill is yours – warning
By: By ROB STOCK
CHECK THOSE bills and payment demands carefully, an Auckland private eye is warning, because you may be being tapped up for someone else’s debt.
Grace Haden from investigations company Verisure, locked horns with Auckland Council-owned Watercare after a collections agency Watercare hired to collect unpaid bills switched the client name on a bill.
The bill was incurred in the name of a previous resident of the house but the demand that came through from debt collector Accounts Enforcement Ltd was in the name of the new owner, which the letter said was liable for the bill.
Watercare told Sunday Star- Times a ‘human error’ had occurred, and spokesman Daniel Wrigley said the debt collector, which would have received a fee of $99.65 for collecting the debt, had been reprimanded.
‘It was a human error and we have reprimanded them.
“We don’t think it was appropriate,’ Wrigley said, but insisted it was an error and not a deliberate strategy on the part of the debt collector.
The switch was done by an employee of the debt collector, said Wrigley, who confirmed no other similar switches had happened.
Haden says that she struggles with the explanation of human error, saying she thinks many people might have paid the demand without checking, particularly as the demand warned ‘legal proceedings’ could follow.
But she was pleased Watercare had apologised and written off the debt.
Watercare said it did use debt collection agencies to chase ‘cold’ bills over six months old.
It’s a big issue for the company as there are currently some 22,000 outstanding bills.
SUNDAY STAR TIMES — 12 AUG 2012 Edition 1, Page 13
False serving sinks liquidation bid
By: By ROB STOCK
A PRIVATE investigations company was reversed out of liquidation by court order after it emerged that a document server had falsely told the court he had served the company’s only director with notice of the liquidation hearing.
Verisure Investigations, operated by Grace Haden, was put into liquidation on July 20, but she was not given a chance to defend it because although a document server for Translegal Services Limited told the court he had served Haden, he had not.
Haden, who now wonders how often such events occur, was amazed at being served with the documents on July 24 by Translegal contractor Tony Parker.
The documents were supposed to have been served on behalf of Brookfields Lawyers. They act for Auckland barrister Wyn Hoadley and former head of the SPCA Neil Wells. At the liquidation hearing Hoadley had been seeking payment for a judgment against Haden, with whom she and Wells have had a lengthy and ongoing legal tussle.
Brookfields sought a new hearing, and Verisure came out of liquidation reversing what the judge called a ‘miscarriage of justice’.
In a new statement to the court, Parker claimed to have knocked on the door at Haden’s home in Epsom, Auckland, on June 29 between 3pm and 4pm but found her not to be home. He claims to have put the documents on the back seat of his car, where somehow the ‘pickup slip’ became detached, before the documents slipped down behind the seat. He then forgot he had not served the documents, and that is why Translegal told Brookfields the documents had been served.
He said he did not notice the documents as he did not tidy his car very often, and panicked when he later found them and served them without looking through them.
Haden said she was home the whole afternoon and evening of the day Parker was supposed to have tried to deliver the documents. She says she was in her home office at the time, right beside the glass-panelled front door, and would have heard any knock.
Brookfields partner David Neutze said the law firm required 100% assurance documents would be delivered, and said the law firm took immediate steps to initiate a new hearing when Translegal, who Haden had contacted, admitted what had happened.
Neutze said he had never seen a situation like it before. Translegal would not comment.
Verisure has discharged all its liabilities to Hoadley.
SUNDAY STAR TIMES — 11 SEP 2011 Edition 1, Page 15
Paid in full but debt collectors came calling
By: By ROB STOCK
GETTING YOUR debt collection procedures right can be a tricky business, but in the age of social media getting them wrong can be embarrassing.
One non-existent debt to TelstraClear recently got an Auckland private investigator up in arms after the debt collection agency the telco employed used legal threats to try to close down a blog she wrote about the experience.
Now Grace Haden, who heads the Verisure private investigations firm, believes more controls are needed over debt collectors both by law, but also by the often well- known companies that employ them.
Haden had been a TelstraClear customer, but severed her ties with the company, settling her account in full, but by mistake the telco referred a “debt” of just under $250 to a company trading under the name Credit Consultants New Zealand.
When it called her up demanding payment, Haden told its phone rep that she had paid her account in full, and that the company should check their facts with TelstraClear.
The call was a surprise, said Haden, as TelstraClear had not informed her that it had called in a debt collector – something she believes a responsible company would do – which would have given her the chance to point out a mistake had been made.
Four days after the call a written demand for $305.30 arrived, at which point Haden employed her private investigation skills to check up on the company.
The first thing she found was that Credit Consultants Debt Services no longer existed as a company, having been amalgamated into a different firm, and she blogged calling into question a “non-existent” entity’s right to collect debts.
The company trading as Credit Consultants Debt Services, which is actually Credit Consultants Group NZ Limited, took exception to Haden’s blog, and demanded it be taken down.
When she refused it followed up with a lawyer’s letter saying some of Haden’s claims, such as that it bullied and threatened her, were “incorrect” and appeared to be designed to cause it “commercial and reputational damage”.
Though Credit Consultants would not comment on Haden’s case, it said there was nothing wrong with using a trading name.
TelstraClear admitted referring the debt to a debt collector had been a mistake.
It said Haden had paid it, but said the mistake really wasn’t its fault.
“Unfortunately, when Grace paid the amount owing she did not provide us with adequate detail to identify that it was for her account,” TelstraClear said in a statement. “While we have a process to try and align funds with accounts, we were unable to do so in this case because of the lack of detail. The debt therefore remained as unpaid and was referred for collection.”
Haden says she made the payment from an account she’d used before to pay TelstraClear.
TelstraClear went on to say debt collection is the last resort and a decision to instruct an agency to collect a debt is not taken lightly.
“It usually occurs when a customer refuses to pay the debt owed or if our attempts to make contact receive no response,” the telco said. “Customers are informed in writing and by phone when we have made the decision to hand the debt to an agency.”
1 march 2011
Firms hit by rise in fraud see article
New Zealand Herald — D001 — 02 March 2011
Firms hit by rise in fraud
Vigilance is needed to protect your company’s books, writes Steve Hart
W ORKPLACE fraud totalling millions of dollars is hitting firms at a time when they need every cent to climb out of the recession. According to a survey by accountancy firm KPMG, New Zealand’s top companies have been hit hard during the global financial crisis with the average reported fraud doubling in two years.Stephen Bell, KPMG’s national head of forensic practice, said the average cost of fraud at companies that took part in its survey grew from $1.9 million in 2008 to $3.8 million last year. He said the total level of fraud increased from $385 million (2008) to $441 million (2010).
“Not only has the average value of fraud doubled in a short space of time, but the organisations surveyed believe that only one-third of frauds are actually picked up,” says Bell.
“This is particularly concerning as the results capture a relatively small portion of the business population. The real fraud price tag for New Zealand is substantially more.”
Grace Haden is a director at Auckland private investigation firm Verisure Investigations. Before starting the firm in 2004 she worked for police, leaving the force as a prosecuting sergeant in 1989.
Among other things, Haden helps firms faced with employee fraud. She says committing fraud at work is too easy _ partly because of computers, lax controls and poor oversight.
“Invoices can be produced and re-produced, with staff siphoning off invoice numbers,” she says.
“It used to be very hard to cook the books but today it is so easy. A customer can get a bogus invoice and they unwittingly pay the money to the employee.
“I am a firm believer that there is only one way to control your business and that is to screen all changes to processes and procedures.”
Haden says what employers need to look out for is staff who don’t take holidays and who appear devoted to the firm _ arriving early, staying late and working weekends.
“Invariably, these are the people who are most trusted within the firm,” she says. “If you have the highest level of trust you are going to be beyond suspicion. And that can include the accounts lady. So many bosses don’t understand the accounts and will say `I leave it all to Mary _ she is so good at the accounts’.
“But `Mary’ could be operating a bank account with the same name of the company and transferring company funds to her own account.”
Haden says everyone should verify everything _ a belt-and-braces approach where people shouldn’t be able to open a bank account in a company name without the bank calling the listed company directors to confirm it is legitimate.
She also says many firms hush up fraud at work to save face and the reputation of their company with creditors and suppliers. A member of staff suspected of committing fraud will often be let go with a cash bonus to go quietly, she says.
“The thing about dishonesty at work is that no one wants to talk about it,” says Haden. “Often they simply dismiss the person caught performing fraudulent acts. I have seen people sacked for fraud given a golden handshake so as to avoid a claim of unjustified dismissal.”
Haden says the police aren’t interested in investigating fraud of less than $1 million and that companies often have to hire a private investigator to root out a bad apple.
One reason for this, she says, is that “police are performance rated, so it is easier to issue a speeding ticket than spend time investigating white-collar crime.
“So a firm will have suffered a loss, then have to pay to get evidence against the employee,” says Haden. “People are in business to make money. So if they can’t get a confession they will make the suspect redundant and give them enough money to go quietly. The employee is then free to repeat their actions at the next firm they work at.
“The message employers are sending to the rest of their staff is that fraud is okay and that you’ll get a clean reference.”
Haden says in her experience people who commit fraud at work are often gamblers or have got themselves into financial difficulty _ perhaps through no fault of their own.
“They will borrow cash from work, perhaps gamble it, but hope they can pay the money back later. There are two main drivers for workplace fraud _ need and greed.”
Haden remembers a lady whose parents died a few weeks apart, causing her severe financial pressure.
“She was the eldest daughter in a Samoan family and was expected to provide big flash funerals for the parents _ the only way she could pay was to steal from her employer,” says Haden.
“When we caught her out, she agreed to start paying the money back _ but then her husband died … so that was that.”
Haden says one factor that is leading to what she sees as an increase in workplace fraud is that getting loans from banks and reputable finance houses is more difficult than it was a few years ago.
“Companies must be being ripped off left, right and centre _ but New Zealand is portrayed as being so corruption-free that people don’t believe it happens here,” she says.
Fraud happens progressively over time and “normally takes 18 months before fraud is detected”.
According to the KPMG report, the financial and insurance services sector remains particularly vulnerable to frauds _ typically involving credit card fraud, irregular lending and bogus insurance claims.
“While external attackers lifted more than $349 million from the financial institutions surveyed, our survey shows insiders were the main offenders in all other sectors,” says Bell.
“Fraud knows no boundaries,” says Haden. “It can include siphoning off cash from a company bank account, taking $10 from the till or taking stock and selling it online _ fraud can be as creative as the mind of the perpetrator. There are people doing things out there that we haven’t even thought of.”
Haden says fraudsters are often intelligent people and will volunteer to work in every department they can so they understand how their firm operates. Surprisingly, Haden says, fraud is not often detected without the help of whistleblowers.
“The trouble is we don’t treat whistleblowers very well,” she says. “In one case, the manager who employed me to find evidence of fraud in his firm was demoted by the company’s overseas owners because they didn’t want to think that fraud could be going on in the company.”
Bell said whistleblowers were responsible for uncovering about 20 per cent of frauds, while fraud warning signs were overlooked in 38 per cent of major frauds.
“It’s essential for companies to have a strong `whistleblower’ programme,” says Bell. “Employers should have a whistleblower-protection policy and an anonymous external reporting facility.
“Fraud is incredibly costly, sometimes deadly, to business … prevention and early detection is key to managing the risk of fraud.”
Steve Hart is a freelance journalist. See www.stevehart.co.nz
Thursday Nov 3, 2005
Private eye backs Hubbard’s call
Former police officer turned private investigator Grace Haden supports Auckland Mayor Dick Hubbard’s call for police to start using non-sworn investigators. more
Oct 5 2004
Editorial: Get humbug out of pool fencing rules
At last some common sense has arrived on the rules for fencing private swimming pools. Justice Tony Randerson has ruled that the fenced enclosure may include a barbecue area and other such poolside entertainment furniture more
12 Mar 2004
CV check to stop fiction creeping in
Remember John Davy – the former Maori Television chief executive? Recruited for the top job by an employment agency, he was later found to have lied on his CV. He served three months in prison for fraud. more