The estranged wife of convicted fraudster Michael Swann will be about $500 a week poorer from tomorrow as a result of a High Court judge's decision.
Justice Graham Panckhurst has granted a Crown application to prevent any further payment to Anna Devereux of rental income from two properties the Crown says are "tainted".
The properties are owned by a company controlled by Ms Devereux's husband, Michael Swann, and a trust.
Swann was jailed for nine and a-half years, with a minimum non-parole period of four and a-half years, in March last year for defrauding the Otago District Health Board, of $16.9 million.
The Solicitor-general applied under the Proceeds of Crime Act for restraining orders over all Swann's assets.
Justice Christine French made the order last May but with conditions allowing Ms Devereux to continue living at Ferntree Lodge with her children, receive the rental from two tenanted properties and to have the use of a 2005 Toyota Land Cruiser until it was sold, when she would be provided with a replacement vehicle.
Last month, the Solicitor-general applied to have the restraining order varied by the deletion of the condition entitling Ms Devereux to the rental income from the two properties.
In his decision, Justice Panckhurst said he thought it was doubtful whether the condition allowing Ms Devereux to receive rental income should ever have been imposed in the first place.
"Put bluntly, the present state of the evidence suggests that both properties are tainted and, hence the case for a condition of the present kind was somewhat dubious," the judge said.
He granted the variation by deleting the rental income from May 7.
He said that would provide a short period for Ms Devereux to apply for a benefit.
In a sworn affidavit in support of the application, David Osborne, of the Serious Fraud Office, said he had tried to trace the source of the funds used to buy the properties.
On the basis of his analysis, he considered the purchase price of a property at 22 Ferntree Dr, acquired in mid-2004, was derived from stolen money and that all but an insignificant sum used to buy the Macandrew Rd property was "similarly tainted".
Ms Devereux's counsel, Len Andersen, opposed any variation, arguing the person whose property was restrained was Swann and that Ms Devereux and the children were his dependants.
A significant issue to be resolved at the substantive hearing later this year was the extent of any interest held by Ms Devereux in restrained property "pursuant to her rights under the Property (Relationships) Act, 1976," the judge said.
Justice Panckhurst also extended the present restraining order for six months past its May 15 expiry date.
