A New Zealand First candidate and a former police officer have lodged a complaint with the Reserve Bank, alleging that Kiwibank facilitated a ‘fraudulent’ account used to steal over $500,000 of their funds.
The complaint claims the state-owned bank neglected necessary due diligence and failed to monitor the account in accordance with anti-money laundering (AML) regulations, according to a report in legacy media.
The complaint, spearheaded by Auckland businessman and political candidate Dr. David Wilson, follows a scam in which both he and the retired South Auckland police officer lost their life savings. Wilson asserts that Kiwibank ignored his concerns raised in a December 2022 phone call, made just a day after the ex-officer transferred his entire savings to the fraudulent account.
Wilson and the ex-officer were duped by a bogus Macquarie Asset Management scheme, believing they were buying Government-backed “green bonds” from the Commonwealth Bank of Australia. They were directed to a Kiwibank account under CEB Holdings, managed by Auckland retail worker Aimee Rodda, who was allegedly paid $20,000 by a crime syndicate to set up multiple fraudulent accounts.
Despite initial police plans to prosecute Rodda for money laundering, authorities have since stated she was also a victim of deception and will not face charges.
Wilson, next in line for NZ First’s Parliament list, lost $200,000 in the scam. Growing suspicious, he called Kiwibank to verify the account, only to be told it was legitimate, without further details due to privacy concerns. Wilson’s recording of the call reveals his frustration and lack of protection from potential fraud.
Financial commentator Janine Starks, who prepared the complaint, argued that Wilson’s alert should have prompted Kiwibank to investigate and report the suspicious activity, potentially saving the ex-officer’s $300,000-plus investment. She criticised Kiwibank for allegedly ‘hiding behind privacy laws’ and failing to act on clear red flags, such as large, irregular payments from a retail worker’s account to offshore locations.
Starks emphasised that the Reserve Bank should investigate Kiwibank’s handling of the mule account and whether it met fraud monitoring obligations. She highlighted that this case underscores a broader issue with the Reserve Bank’s oversight of AML compliance among retail banks, citing two years of large-scale fraud involving mule accounts and significant financial losses for victims.
A Reserve Bank spokesperson confirmed receipt of the complaints and ongoing discussions with Kiwibank but declined further comment on active investigations. The Reserve Bank reiterated its commitment to collaborating with partner agencies to combat the rising tide of scams and fraud.
In response, a Kiwibank spokeswoman stated that the bank is investigating the concerns raised and noted that previous complaints by Wilson, reviewed by the Banking Ombudsman and the Office for the Privacy Commission, found no wrongdoing by Kiwibank.
