FRAUD ADMITTED.

Auckland Star, Volume LXV, Issue 22, 26 January 1934, Page 3

FRAUD ADMITTED.

OFFICER'S OFFENCES. NATIVE RELIEF SCHEMES. PUBLIC FUNDS DIVERTED. (By Telegraph.—Own Correspondent.) GISBORXE, this day. A ease of considerable interest throughout the Dominion was heard in the Tolice Court before Mr. E. L. Walton, S.M., yesterday, when charges of fraud and of making a false entry in connection with his administration as certifying officer of the Native Department's unemployment relief schemes on the East Coast were admitted bv Charles Goldsmith. Accused, who is general manager of the Waiapu Farmers' Co-operative Company, Tikitiki, appeared on 10 charges, e j<rht of obtaining sums of money from the Government with intent to defraud by means of false pretences, and eight of making false entries in material particulars in. certificates of completion of work under the native unemployment scheme. The Crown Prosecutor, Mr. F. W. Nolan, conducted the case for the prosecution, Mr. A. A. Whitehead appeared for accused, while Mr. L. 1. Buinard watched proceedings on behalf of the Waiapu Farmers' Co-operative Company, Limited.

Practice Explained. Mr. Nolan explained that accused was a certifying officer under the Unemployment Act, and his duties were to certify to the completion of a work by the unemployed. The certificate was presented to the postmaster, who would pay the actual sum shown as having been involved in the work. Accused would then pay over the money to the workers. The practice was to devote a certain amount of free money and the balance in loan money for the works. The loan moncv was repayable to the Government" by the owner of the property on which the work was done. The practice followed by the accused was this: He would inflate the cost of a job by the amount of the loan money to be repaid. For example, in a job to cost £10, £10 might be loan money. Accused would inflate the contract, and the balance would be refunded to thp Government as repayment of the loan money. Thus, in each case, the Gov--1 eminent was spending more money than was required for the job on the certificates given by accused. The refund actually, therefore, was provided by the Government itself. In some cases it would be shown that native labourers had been paid, but in the majority of cases they were not paid in cash. Their accounts would be credited with the amount of the loan money. The possible effect might well be that the Government had lost the right to reco\er the money allocated to each job. Second!v, the money, instead of going into the hands of the men who earned it, went into the Waiapu Company to reduce the labourers indebtedness.

Maori Labourer's Evidence. The first charges heard were those relating to October 17, 1932. Renata ■Moana, of Maraehara, labourer, stated that in September of that year the manager of the Ahivreka station put witness and his son on a scrub-cutting contract under the unemployment scheme. They were to receive £15 for the work and were to be paid by the accused after they had finished the work. They went to see accused at Tikitiki and asked for payment. Goldsmith then asked witness to sign a wages sheet as produced. Witness recognised his signature and the signature 0 of his son Sam Moana on the wages sheet. When witness signed the paysheet there were 110 figures or waitings on it.

Mr. Nolan: You can now see that the voucher sets out that the scrubcutting contract was for £36.—1 don't know anything about it. John White Scott, Government audit inspector, stated that with Detective McLeod he went to Tikitiki to make inquiries as to the payment of various moneys. They uplifted all the cheques that had been paid to the bank. The amount paid into the likitiki branch {was approximately £11,000. After maki ing various inquiries from natives, witness inspected the , books of the Waiapu Farmers' Company, and found that there had been inflations of the amounts of 88 contracts taken by the unemployed. A good number of these were admitted and pointed out to witness by Goldsmith himself.

» Hundreds of Contracts. During inquiries extending over some months, witness had been in close contact with accuscd, and had observed that his duties as manager of the company formed more than a whole time job. The number of contracts for which Goldsmith had been responsible included native development contracts as well as unemployment contracts, and the number ran into hundreds. In witness' opinion the burden of this was too much for one man to carry, together with his own work. Accused's remuneration for unemployment work totalled £7.3 a year. If the accused had been desirous of extracting money from the Government for his own personal use he could have done eo quite easily. The total amount of inflations on tlie contracts involved in the present proceed-

ings was £877 12/3. Scott added that Goldsmith had given him every possible assistance in his inquiries. Questioned as to his opinion of accused's character, witness said: _ i have a high admiration for Goldsmitli, and no one is more sorry than I m to find him the subject of these proceedings." In the course of a lengthy statement produced by Detective McLeod, accused said: "It is true that I have on occasions drawn money for specific work shown on the vouchers and have applied this money for the payment of other work, but for every payment made work has been done. I have not kept a separate bank account for this part of my work, as it was quite convenient for me to use the facilities of my company. I have not received any personal benefit whatsoever as the result of these irregularities." Accused pleaded guilty to both charges and was committed for sentence to the next sitting of the Supreme Court in Gieborne. The Court then commenced hearing further charge's of a similar nature.