Police then applied for a restraining order on the men’s assets.

They alleged the pair operated a scheme “whereby they misapplied payments made to an affiliated company by the ministry for the provision of essential household furniture to welfare recipients,” according to court documents.

The police application alleged that they illegally benefited from at least $2 million between September 2017 and March 2023.

Civil actions to confiscate assets obtained through criminal conduct are often conducted in tandem with, or after, related criminal prosecutions. However, when contacted by NZME, one of the men said they were not facing criminal charges at this time.

Companies Office records show both men are connected to an Auckland furniture company as current or former directors. The company’s website advises you to provide furniture quotes Work and Income New Zealand (Winz).

Winz, which is part of MSD, sometimes provides an advance to beneficiaries with limited means who need to buy essential household items such as tables, chairs, beds, refrigerators and washing machines.

High Court Judge Pheroze Jagose issued the restraining order on October 18.

It means that the assets cannot be disposed of or otherwise dealt with before the police have the opportunity to apply for another confiscation order against the Crown under Proceeds of Crime (Recovery) Act 2009.

The act is designed to allow authorities to seize property and assets derived “directly or indirectly” from significant criminal offences, including by organized crime groups.

Most proceeds of crime cases have historically been for drug-related crimes, but the law is also used to confiscate assets obtained through fraud or white-collar crime.

In that case, the police claim extended to equity in real estate worth $3.24 million, which Judge Jagose said the men shared with their spouses, and bank funds of more than $500,000.

“Having regard to the likely recognition of other claims to the land for forfeiture, I am satisfied that the value of the property sought to be restrained is not disproportionate to the scale of the alleged offence,” the judge said.

“I see no reason not to exercise my … residual discretion, precisely to preserve the property if (it is) to be forfeited to the Crown, to make the restraining orders and other orders sought.”

MSD group managing director of customer care George van Ooyen said all allegations of fraud were investigated and prosecuted where appropriate.

“We take our responsibilities to New Zealand taxpayers very seriously,” he said.

“In some cases, this may include working with the police to use detention and seizure powers under the Proceeds of Crime Recovery Act,” van Ooyen said.

“As this matter is before the court, we are unable to comment further.”

Ric Stevens spent many years working for the former New Zealand Press Association, including as a political reporter at Parliament, before holding senior positions at various daily newspapers. He joined NZME’s Open Justice team in 2022 and is based in Hawke’s Bay. His crime and justice writings are based on four years of front-line experience as a probation officer.