Covid 19 wage subsidy sentence: Uatesoni Filimoehala created bogus company to get $120k payout

By  Craig Kapitan of the New Zealand Herald

A financially strapped father-of-five who created a fake company in order to defraud the Government of more than $120,000 in Covid-19 wage subsidies has been sentenced to two years and three months’ imprisonment.

Uatesoni Filimoehala had sought home detention as he appeared in Auckland District Court today on four counts of dishonestly taking or using a document.

Judge Robyn von Keisenberg rejected the idea – noting, among other things, that his promise he could pay $20,000 back by Monday appeared to have no basis in reality given his inability or reluctance to pay much smaller instalments in recent months.

“It is evident that offending against the State is not victimless,” von Keisenberg said, quoting an appeal decision issued two weeks ago in which another wage subsidy scammer tried unsuccessfully to have his prison sentence tossed. “…Where the offending involves abuse of a special scheme, particularly one established to assist people in a time of emergency or crisis, this will be aggravating.”

Filimoehala registered 42 Construction as a business in April 2020, just weeks into New Zealand’s first nationwide Covid-19 lockdown and shortly after the wage subsidy scheme became operational.

Within hours he made a first subsidy application, naming himself and his brother as employees, according to court documents. He used an alias, calling himself Watson Filimoehala, to hide his bankruptcy.

He successfully applied for wage subsidies six times over the next 17 months, receiving $126,532 in total. An additional attempt to receive $42,491 was unsuccessful. The employees he listed were actual people, but they didn’t ever work for the company. Some were receiving wage subsidies from their actual employers, court documents state.

Filimoehala pleaded guilty to the charges in Waitākere District Court in May.

During today’s hearing, defence lawyer Graeme Newell submitted a letter of apology as well as letters of support from the defendant’s wife and pastor. They described him as a loving father, a hard worker and a significant contributor to his church’s congregation.

“He’s accepted full responsibility,” Newell said, describing his client as highly remorseful and motivated to pay the money back.

During a sentence indication hearing earlier this year, former defence lawyer Lucy Qian said Filimoehala did not live a lavish lifestyle and his offending was driven by the desire to provide for his children. He had used some of the funds to pay contractors for bills on which he defaulted when he fell on hard times, she said but acknowledged her client couldn’t provide evidence of such payments.

Prosecutor Jessica Blythe, representing the Ministry of Social Development, noted today that Filimoehala faced several significant hurdles in his quest for home detention.

“It was highly pre-meditated offending,” she said of the long-term fraud, noting also that a pre-sentencing report writer recommended a custodial sentence due to Filimoehala’s “poor response” to a community-based sentence in 2014.

She also pointed to the sentencing of fellow wage subsidy fraudster Nathan Peter Irvine Downey, who was given a prison sentence out of Manukau District Court in August despite having paid back all of the nearly $200,000 he fleeced. He appealed that sentence but the effort was shot down in a decision dated September 15 by High Court at Auckland Justice Layne Harvey.

“Mr Downey’s offending involved repeated dishonesty of a system designed to help those most in need during that unprecedented time,” Justice Harvey wrote. “While this specific offending cannot continue to occur as the system no longer exists, abuse of a system of this kind still requires specific deterrence for the future.”

In Auckland District Court today, Judge von Keisenberg said she accepted Filimoehala’s claim he was remorseful. She reduced his overall sentence by 5 per cent for remorse and another 5 per cent for the hardship his imprisonment will cause his school-aged children.

But the judge also agreed with the prosecution that Filimoehala’s offending was highly premeditated.

It is common, although not mandatory, for sentences under two years to be served on home detention instead of prison. But Judge von Keisenberg noted today that even had the sentence been under two years she would have ordered the sentence be served in prison for purposes of deterrence, as was done in the Downey case.

The Covid-19 Wage Subsidy Scheme was established by the Ministry of Social Development in March 2020 to help businesses and their staff survive the initial lockdown and those that followed over the next two years.

Because the fund was established hastily in response to an unfolding situation, the Government acknowledged it was relying on a “high trust” approach to applications. That was necessary, officials said at the time, to provide rapid relief to those who needed it.

Craig Kapitan is an Auckland-based journalist covering courts and justice. He joined the Herald in 2021 and has reported on courts since 2002 in three newsrooms in the US and New Zealand.

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