Fraud unit ‘able to cope’

Press, 1 June 1988, Page 4

Fraud unit ‘able to cope’

PA Wellington Publicity about a few conmen had raised undeserved claims of inadequacy about the Government’s corporate fraud resources, the Minister of Justice, Mr Palmer, said.

Hitting back at accusations by an Opposition member of Parliamentt, Mr John Banks, that the Government was .letting rip-offs get out of hand, Mr Palmer said there was no epidemic of fraud, his department’s corporate fraud unit was stable to cope, and the conmsn concerned posed little risk to the public. “Fears have been unjustifiably built up, boosted by news media articles,” said Mr Palmer. “Much of the focus of recent stories about socalled corporate fraud has been based on the activities of a relatively small number of conmen. Such people have always been around and, regrettably, probably always will be.” Mr Palmer said the corporate fraud unit had saved investors and the public a lot of money by closing down many businesses that were either

undesirable or unsuccess- ; ful. Mr Banks’ suggestion i that the unit needed more ; resources was simplistic, ' he said. < “It was more important i in this work to have the i right resources rather i than sheer numbers.” 1

Mr Palmer said the conmen who have received publicity lately posed little danger provided people were sufficiently careful about their investment decisions. “Many suspect deals fall outside normal commercial arrangements and that should act as a warning.” Mr Palmer said he would like to see financial institutions play a policing role. “In many instances, the fact that a financial institution has advanced money to an individual is taken by other people as an indication of substance and legitimacy. “I cannot stress strongly enough the importance of all lending institutions carrying out appropriate checks on the bona fides of individual borrowers and all schemes for which money is being sought,” he said.