A former engineer at Auckland Council’s water company faces up to seven years in jail in one of the country’s largest public sector rip-offs.

Brian from Mount Roskill

Shyamal Shah, 26, siphoned $1.039 million from Watercare using fake invoices.
He pleaded guilty to obtaining by deception and faces up to seven years in jail.
Watercare is pursuing full reparations and has strengthened procurement controls to prevent future fraud.
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A young engineer at Auckland Council’s water company faces up to seven years in jail in one of the country’s largest public sector rip-offs.
The swindle comes as New Zealand slips in a global index ranking the least corrupt countries, with a transparency agency warning that our response to increasing corruption pressures has been “lacklustre and complacent”.
Shyamal Shah, 26, siphoned $1.039 million from Watercare in his position as a network engineer. He has pleaded guilty to obtaining by deception and is due to be sentenced on July 8.
The charge carries a maximum sentence of seven years in jail.
Shah created fake invoices in the names of “Gardener Construction” and “Ben Gardener”, which he issued to contractors and put the money into his bank account, according to the police summary of facts.
It said between July 19, 2023, and November 8, 2024, Shah received 40 fraudulent payments totalling $1,039,146.
Watercare chief executive Dave Chambers said the public company was appalled by the fraudulent behaviour of the former engineer, who had resigned and was serving out his notice when the fraud was discovered in November last year.
He said Shah’s actions had deeply impacted staff and measures were in place to support them through this challenging period.
“We are taking this situation extremely seriously. It is crucial to emphasise that Shah acted alone, no other Watercare staff were involved, and the suppliers were not deliberately complicit,” he said.
Shah’s case is on a par dollar-wise with a seven-year corrupt relationship at Auckland Transport, where a contractor made regular payments to an AT manager amounting to more than $1m.
Former AT senior manager Murray Noone and Projenz managing director Stephen Borlase were jailed in 2017 for five years and five years and six months respectively after being found guilty of bribery and corruption.
A second AT staffer pleaded guilty to accepting bribes from Borlase, mostly in the form of 20 international holidays, and was sentenced to 10 months’ home detention.
In February this year, New Zealand slipped one place to fourth in the worldwide rankings of the world’s least corrupt countries, achieving its worst-ever placing on Transparency International’s Corruption Perception Index.
Transparency International New Zealand chief executive Julie Haggie said New Zealand’s declining score was a worry and its response to increasing corruption pressures over several years has been lacklustre and complacent.
Shah issued invoices from his fictitious companies to four Watercare suppliers – Downer, Traffica, Hi Flo Pumps, and Instrumental and Electrical Services.
Chambers said the suppliers paid the invoices and then on-charged Watercare, adding a margin.
“As Shah stole public funds, we are determined to recover the money. The suppliers have repaid the margins they received.
“Right now, we are actively pursuing Shah for full reparations. We will have a clearer view at the time of the sentencing and explore further options down the track if necessary,” Chambers said.
Watercare has carried out an internal investigation to scrutinise its procurement process and identified some existing controls that could be strengthened, and additional new controls.
Chambers said of these, seven had been actioned, two were under way and four required further planning.
“Deloitte has peer reviewed our investigation report and confirmed that the additional controls we recommended will help reduce the risk of future fraudulent activity,” he said.
Traffica managing director Bashir Ahmed said his company had been invoiced about $110,000 from “Ben Gardener”.
“It’s quite disappointing that a local government employee was able to do this,” said Ahmed, saying there should have been more checks and balances from his end and Watercare.
Traffica has worked with Watercare and the council over the past year, and Auckland Transport over the past five or six years, and now requires greater details from Watercare rather than just signing off on emails, he said.
Ken Turner, the council observer on the Watercare board, said the water company had good practices in place, which picked up the offending.
He said the problem was that the council and council-controlled organisations (CCOs) had a preferred supplier system for contractors and suppliers, leading to a “workaround” where small suppliers were asked to do work and bill it through the principal contractor.
This created a hole that allowed someone to calculate a scam and rip-off Watercare, Turner said.
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