Trio found guilty of pokie machine fraud
Prominent Marlborough racing personalty Michael (Mike) Joseph O’Brien has been found guilty of gambling machine frauds.
A judge at the High Court in Wellington yesterday issued a decision running to more than 100 pages, detailing O’Brien’s hidden involvement in the operation of gambling machines, and venues hosting the machines.
The decision also detailed the way he used his influence over grants from gambling profits to produce an income for himself and related entities of more than $1 million a year.
O’Brien, 58, of Blenheim, was remanded in custody until sentencing next month.
Name suppression has now ended for Kevin Martin Coffey, 60, formerly of Masterton, a former Internal Affairs gambling inspector who was found guilty of one charge of making false representations to deceive Internal Affairs.
Coffey was found not guilty of obtaining control of gaming proceeds for the Bluegrass Trust with intent to deceive Internal Affairs.
Paul Anthony Max, 60, a bar owner and operator of Nelson, was found guilty of three charges of fraudulently obtaining gambling licences for three venues, in Stokes Valley, Nelson, and Palmerston North, by concealing that Mike O’Brien was the ‘‘true owner’’ of the venues.
Coffey and Max were also remanded in custody until sentencing.
At the heart of the charges was the allegation that O’Brien wanted to raise funds for the racing industry, and in the process raised money for himself.
But his involvement with pokie machine gambling, and the distribution of the profits, was concealed from the regulating body, the Department of Internal Affairs, because it considered him unsuitable to be involved.
Both the bars and clubs where gambling machines operate, and the organisations that own the machines and distribute the profits, have to be licensed.
People cannot be ‘‘key’’ in both the operating organisations and the running of the venues.
O’Brien was found guilty of five charges of deceiving Internal Affairs, two for Blenheim-based Bluegrass Trust and three relating to gaming machine venues. The charges related to dates between 2009 and 2013, when Bluegrass made grants to various organisations, including racing clubs, of $11.8m.
The court heard that O’Brien was earning more than $1m a year lobbying on behalf of racing clubs wanting grants from gaming money.
He invoiced the clubs for his services at the start of the season, and the Crown alleged he would then influence or control the grants process so that the clubs received about three times the amount they paid him.
However, there were no charges relating to the lobbying or the money received. The Crown alleged that, during the period the charges covered, O’Brien and related entities received $6.8m, and in a longer period from 2007 to 2013, $11.57m was received for lobbying.
In his decision on the charges Justice Robert Dobson found Mike O’Brien was the driving force behind Bluegrass, which appeared to have been set up by his father Pat, a retired accountant and former New Zealand Harness Racing chairman.
Pat O’Brien, 83, was also charged, but removed from the trial due to his illhealth.
Mike O’Brien sometimes used his father’s email address, and signed his father’s name on documents, including writing a letter to Internal Affairs denying his involvement but completed in his father’s name.
As well as influencing grants from Bluegrass, the judge found O’Brien also had some success in getting grants from gaming trusts other than Bluegrass.
All four defendants had pleaded not guilty. Originally there were 15 charges but 10 were dropped.