Three agencies, one director, one warrant that went nowhere
Auckland businessman Timothy David Bolot, 58, faces 17 fraud charges alleging he dishonestly obtained $220,556.80 in Covid wage subsidies between April and September 2020, with individual payments alleged to range from $2,343.20 to $42,117.60. The charges carry a maximum penalty of seven years’ imprisonment.
What makes the case notable for business readers is its reach. Beyond the wage subsidy allegations, a company Bolot directed owes more than $400,000 from a Callaghan Innovation loan, and Inland Revenue is also involved. Three separate public agencies, each with its own enforcement arm, each pursuing the same director independently.
The enforcement itself is where the story turns awkward. Bolot was bailed after a court appearance in May 2023 and a warrant for his arrest was issued 21 days later when he failed to appear. That warrant remains active more than three years later, with Bolot widely believed to be in Queensland and court documents listing his address as unknown. A legal source told the NZ Herald the situation was unusual, describing a defendant apparently overseas for three years while the prosecuting agency appeared to do nothing, despite the case being clearly in the public interest. The Serious Fraud Office said it was not involved, police referred queries to the Ministry of Social Development, and IRD declined to comment citing secrecy provisions.
The enforcement machine is real, just uneven
The Bolot case is one of many, and MSD’s recovery effort is more substantial than the idle warrant suggests. As of 31 March 2026, MSD’s Wage Subsidy Integrity and Fraud Programme has secured 25,572 repayments totalling $836.3 million, resolved 7,883 allegations of misuse, put 39 people before the courts, sentenced 71, and flagged 20 businesses for potential civil recovery.
The offending on the record runs the full range. In one case, Hun Min Im faced 91 charges after creating a web of fake companies and forged documents, attempting to claim $2.3 million and receiving almost $624,000. In another, Luke Daniel Rivers pleaded guilty to 29 charges involving nearly $1 million in fraud and money laundering.
Why the schemes were always going to leak
The vulnerability was designed in. Speed was the priority, and speed came at the cost of scrutiny. Deloitte tax partner Robyn Walker has explained the trade-off, noting the aim at the time was to get money to businesses quickly, which meant the level of scrutiny on applications was not as high as it might ordinarily be. She also flagged that not every case is clear-cut fraud, with some disputes turning on semi-subjective eligibility criteria, such as differing views on whether turnover drop thresholds were met. That distinction matters. Some directors forged documents and fled; others genuinely believed they qualified. Both now carry enforcement risk.
The loan tail IRD is quietly writing down
The wage subsidy is only part of the picture. The Small Business Cashflow Scheme lent $2.363 billion between May 2020 and December 2023, of which $1.623 billion has been repaid. As at 30 June 2025, the nominal balance outstanding was $801.772 million, but the fair value was just $218.701 million.
That gap is the number to watch. IRD’s own accountants are implicitly writing down roughly 73 percent of what is still owed. That is not a rounding error, it is a signal that a large slice of outstanding Covid loans is not expected to come back. IRD has already written off $65 million, with more to follow as loans that fell due through 2025 tip into default.
The compliance lesson has not expired
Set MSD’s $836.3 million in recoveries against the roughly $18.8 billion in net wage subsidy payouts the Democracy Project estimated, and recovery sits near 4.4 percent. That is both a serious enforcement effort and a hard ceiling on what the state can realistically claw back.
For any business owner who drew on Covid support and has not heard from an agency, the takeaway is blunt. Six years on, documentation, eligibility and director conduct are still live. Silence is not clearance. The Bolot warrant shows enforcement can stall, but the IRD write-downs and the 71 sentencings show it has not stopped. Emergency funding suspended a lot of things in 2020. Accountability was never one of them.
Sources
- NZ Herald: Company director faces 17 fraud charges, said to owe money from Covid subsidy, tax and Callaghan Innovation (2026-08-07)
- MSD: Wage Subsidy Integrity and Fraud Programme (2026-03-31)
- Inland Revenue Annual Report 2025 – Note 5. Small Business Cashflow Scheme (2025)
- RNZ: Covid-19 wage subsidy fraud, man created complex web of fake companies and forged documents
- NZ Herald: Luke Daniel Rivers pleads guilty to nearly $1m Covid fraud
- RNZ: ‘High trust’ Covid approach led to fraud cases, tax expert says
- NZ Herald: Small business Covid loan defaults soar, $65m already written off by IRD
- Democracy Project: $10 Billion overpaid to businesses
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