Al­leged fraud leaves credit union in lurch

Kapi-Mana News - - NEWS - By AN­DREA O’NEIL

Ti­tahi Bay woman Su­san Terri Ha­gai ap­peared in Welling­ton District Court last week charged with em­ployee fraud to the tune of over $1.2 mil­lion.

The 45-year-old ap­peared in court af­ter $1,242,750 was al­legedly ob­tained by de­cep­tion from her em­ployer, the Hiber­nian Catholic Ben­e­fit So­ci­ety.

Five charges of fraud have been laid against Ha­gai. One re­lates to the Hiber­ni­ans, the oth­ers al­lege $ 15,089 was ob­tained by de­cep­tion from Hoff Hold­ings, a group of bars which Ha­gai worked for af­ter leav­ing Hiber­ni­ans.

Ha­gai en­tered no plea last Wed­nes­day and was re­manded on bail un­til Au­gust 24. Ha­gai’s ar­rest came af­ter months of joint in­ves­ti­ga­tion by the Se­ri­ous Fraud Of­fice and Welling­ton po­lice into al­leged fraud com­mit­ted be­tween 2001 and 2010.

Ha­gai served as an of­fice clerk for the Hiber­ni­ans for about 17 years, so­ci­ety pres­i­dent Mike McBride says. She was made re­dun­dant in Septem­ber 2010 af­ter the so­ci­ety de­cided to save money by con­tract­ing ac­coun­tancy firm Munro Benge to deal with its ad­min­is­tra­tion, he says.

The miss­ing funds were dis­cov­ered in May this year, when a Munro Benge em­ployee be­gan pre­par­ing the so­ci­ety’s ac­counts for its up­com­ing au­dit.

‘‘He said, ‘ Ooh, that doesn’t ap­pear right’,’’ Mr McBride says.

Sus­pi­cions raised, Munro Benge checked fur­ther back into the so­ci­ety’s ac­counts, and dis­cov­ered a large amount of money was miss­ing.

The $1.2m went miss­ing in equal quan­ti­ties from the so­ci­ety and its credit union arm, the Hiber­nian Credit Union.

While the so­ci­ety has as­sets of $9.6 mil­lion and is fi­nan­cially ro­bust, the credit union has been crip­pled by hav­ing $ 600,000 taken from its cof­fers, Mr McBride says.

The so­ci­ety has frozen the credit union’s funds in an at­tempt to stave off liq­ui­da­tion, and is at­tempt­ing to pre­serve its re­main­ing funds by trans­fer­ring them to the so­ci­ety, to a closed fund where they will not be in­vested or drawn on.

‘‘Any funds re­cov­ered would go to that fund and mem­bers would de­cide at a later date what they wish to do [ with them].’’ A de­ci­sion from the reg­is­trar of friendly so­ci­eties and credit unions next week will de­cide its fate, Mr McBride says.

‘‘If that doesn’t get ap­proved, the only op­tion would be to liq­ui­date.’’

Credit union mem­bers are dev­as­tated by the in­ci­dent, not just be­cause their in­vest­ments might be lost but be­cause the fraud is al­leged to have been per­pe­trated by some­body they had many deal­ings with, Mr McBride says.

‘‘The mem­bers are ex­tremely sad, they’re ex­tremely dis­ap­pointed.’’

Credit union mem­bers are typ­i­cally par­ents or grand­par­ents putting money away for their chil­dren’s ed­u­ca­tions or for trips to visit fam­ily over­seas, he says.

The Hiber­nian So­ci­ety is a ‘‘friendly’’ fi­nan­cial so­ci­ety with 2800 mem­bers across 21 branches na­tion­wide.

It of­fers its mem­bers in­surance, mort­gages and as­sis­tance with the cost of fu­ner­als, medicine and study.

Credit unions are mem­berowned fi­nan­cial bod­ies which op­er­ate much like banks, pro­vid­ing sav­ings ac­counts and loans.

TV teacher: Tawa School in­ter­me­di­ate stu­dents Chloe John­ston, Han­nah War­den and An­ders Holm were filmed by the BBC last week for a pro­gramme about em­i­grat­ing Bri­tish teacher Rob Bo­ras­ton – the film crew are Jon Bow­don and Cather­ine Hoskin.


Charged: Su­san Terri Ha­gai.

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