A former chairman of Harness Racing New Zealand and three other people have been charged over an alleged $30 million pokie fraud.

It is the biggest criminal case ever of its kind involving pokies outside of a casino.

Four defendants have appeared in the Wellington District Court today over the alleged manipulation of grants which come from pokie machines, a Department of Internal Affairs spokeswoman said this morning.

The defendants, charged by the Serious Fraud Office with obtaining by deception, are former HRNZ chairman Patrick O'Brien, his son Michael O'Brien, Paul Anthony Max and another person with interim name suppression.


The O'Briens are of Blenheim while Max is from Nelson.

A DIA spokeswoman confirmed the quantum of the alleged fraud was $30 million.

The alleged offending was uncovered during an investigation called Operation Chestnut which involved the DIA, SFO and the Organised and Financial Crime Agency of New Zealand.

"Operation Chestnut has been a significant investigation in the Class 4 sector and we've welcomed the opportunity to work in partnership with the SFO and OFCANZ", said the DIA's Maarten Quivooy.

"While we cannot talk about the detail of the allegations while they are before the court, the charge of obtaining by deception is a serious offence. The criminal charges are just one aspect of the Operation and we're working hard to use what we've learnt during the investigation to lift compliance in the sector," he said.

The O'Briens and Max have reportedly said they would defend the charges.

All men were remanded until March 20 after their appearance in front of a registrar today.

The defendants:


* Patrick Francis O'Brien

• Faces two charges of obtaining by deception (over $1000)

• Blenheim-based former chairman of Harness Racing NZ

• Former chairman of the Bluegrass Holdings Ltd charity

• Father to co-defendant Michael O'Brien

* Michael Joseph O'Brien

• Facing 15 charges of obtaining by deception (over $1000)


• Blenheim-based prominent racing figure

* Paul Anthony Max

• Faces 13 charges of obtaining by deception (over $1000)

• Reportedly bankrupt former Nelson bar owner

* Man with name suppression

• Faces two charges of obtaining by deception (over $1000)


• Former gaming inspector

- additional reporting Rebecca Quilliam