DEEP RESEARCH INVESTIGATION #48

SFO CYCLONE RECOVERY FUNDING INVESTIGATION (2023)

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INVESTIGATION SUMMARY

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Date: December 29, 2025 Subject: Serious Fraud Office - Cyclone Gabrielle Recovery Funding Investigation Announced: August 8, 2023 Status: ONGOING STRATEGIC FOCUS AREA

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OVERVIEW

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In August 2023, the Serious Fraud Office announced that misappropriation of targeted government funding related to cyclone and flooding recovery would be a strategic focus area for the next 18 months.

This announcement came following Cyclone Gabrielle, which caused extensive damage to Hawke's Bay and other regions in February 2023, with estimated damage exceeding $8 billion.

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SFO STATEMENT

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Director Karen Chang stated:

> "We are focused on creating a ripple effect from our work that acts to disrupt and deter offenders, through the judicial process and our work in lifting awareness and counter fraud prevention capability."

> "These focus areas are intended to be dynamic and responsive to issues that we believe are particularly pertinent to New Zealand's economic and financial wellbeing in the current environment."

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SEVEN STRATEGIC FOCUS AREAS

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The SFO announced seven strategic focus areas:

• Corporate and commercial fraud that threatens New Zealand's reputation as a safe place to do business

• Misappropriation of targeted Government funding (including emergency recovery or rebuild)

• Disruption of emerging trends

• Foreign bribery or foreign influence allegations

• Fraud that targets or disproportionately harms a particularly vulnerable community or group

• Corruption of public officials where health and safety is compromised

• Frauds perpetrated or facilitated by trusted professionals or professional enablers

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HAWKE'S BAY RELEVANCE

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Cyclone Gabrielle Impact:

• Hawke's Bay was one of the regions most severely affected by Cyclone Gabrielle
• Significant government funding allocated for recovery and rebuild
• Multiple funding streams including emergency grants, infrastructure repair, housing buyouts

Related Developments:

• June 2023: Fraud suspected in some Cyclone Gabrielle grant applications
• July 2023: Government provides $567m for weather-damaged highways (including Hawke's Bay)
• July 2023: Government reaches deal to share buy-out of Hawke's Bay cyclone-damaged houses
• September 2023: Hawke's Bay residents eye legal action over post-cyclone buyouts

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SIGNIFICANCE TO INVESTIGATION

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1. Professional Enablers Focus:

The SFO's explicit focus on "frauds perpetrated or facilitated by trusted professionals or professional enablers" is directly relevant to this investigation. Solicitors and accountants who facilitate fraudulent transactions fall within this category.

2. Vulnerable Community Focus:

The focus on "fraud that targets or disproportionately harms a particularly vulnerable community or group" is relevant to concerns about Māori trust governance and potential exploitation.

3. Government Funding Oversight:

The significant government funding flowing into Hawke's Bay for cyclone recovery creates opportunities for misappropriation, particularly through entities with weak governance.

4. Regional Context:

The SFO's focus on cyclone recovery funding adds another layer of scrutiny to financial activities in Hawke's Bay during the recovery period.

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QUESTIONS FOR FURTHER INVESTIGATION

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• Have any Hawke's Bay entities been referred to SFO for cyclone funding misappropriation?
• Are any of the entities identified in this investigation receiving cyclone recovery funding?
• What oversight mechanisms exist for cyclone recovery funding to Māori trusts?
• Have any professional services firms been investigated for facilitating cyclone funding fraud?

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SOURCES

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• RNZ - "Serious Fraud Office to investigate use of targeted government funding on cyclone and flooding recovery" (August 8, 2023)
• SFO Statement of Intent 2023-2027
• Stuff - "Fraud suspected in some Cyclone Gabrielle grant applications" (June 7, 2023)

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CROSS-REFERENCES

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• 05_SFO_REQUEST.txt (OIA request)
• 47_SFO_HAWKES_BAY_KURA_FRAUD.txt
• 43_DIA_GAMBLING_CORRUPTION_2024.txt
• 00_MASTER_CROSS_REFERENCE.txt