How Shyamal Shah Carried Out One of New Zealand's Biggest Public Sector Heists?

Shyamal Shah (27) carried out one of New Zealand's largest public sector scams. Photo: Facebook

It was meant to be just another week at Auckland’s Watercare, the city’s public water utility, in November 2023. But as 27-year-old engineer Shyamal Shah packed his bags for a new life in Australia, police swooped in. 

In a plot that stunned New Zealand, Shah had siphoned over $1 million from the public purse—one of the country’s largest public sector scams—leaving a trail of betrayal, broken trust, and urgent questions about oversight.

Earlier this week, the Auckland District Court sentenced Shah to two years and two months in prison. Judge Kate Davenport rejected Shah’s plea for bail pending appeal and home detention, remarking that his crime was a “significant breach of trust”.

The Mastermind: Shyamal Shah’s Rise and Fall

By all accounts, Shyamal Sushil Shah was an immigrant success story. Shah went to Avondale College and then to Auckland University of Technology, graduating with a Master's degree in engineering. 

 A promising young engineer of Indian origin, Shah joined Auckland Council’s Watercare as a water network engineer. 

Entrusted with overseeing major infrastructure projects, Shah was considered diligent and capable. But beneath the surface, he was spiralling into a world of gambling debts and mounting pressure.

Shah’s journey from respected council worker to convicted fraudster was as rapid as it was shocking. Over 17 months, he orchestrated a sophisticated fraud, exploiting weaknesses in Watercare’s procurement and payment systems.

How the $1 Million Scam Unfolded

Shah’s scheme was as simple as it was audacious. He created 40 fake invoices under bogus company names such as “Gardener Construction” and “Ben Gardener.” 

These invoices, supposedly for subcontracted work, were submitted to approved contractors working on Watercare projects, including Instrument and Electrical Services, construction firm Downer, Traffica, and HiFlo Pumps.

Unaware of the ruse, the contractors paid the invoices, believing the work had been done. The payments, however, went directly into Shah’s personal bank account.

The fraudulent costs were then bundled into the contractors’ total project expenses—costs that Watercare bore. 

In total, Shah siphoned off $1,039,146 before his arrest in November 2023, which was supposed to be his final week at Watercare before relocating to Australia.

The Role of Gambling and Desperation

Court documents revealed that Shah’s descent into fraud was driven by a gambling addiction that began at Auckland’s SkyCity Casino and worsened after he became involved in underground poker rings.

He began playing blackjack at SkyCity Casino in 2019, while still a student. 

As his debts mounted, Shah was allegedly threatened by poker ring enforcers, shown photos of a man beaten for failing to pay. In desperation, he turned to fraud, hoping to repay his debts and escape the cycle of fear.

His lawyer described the situation as a “very difficult place to get out of,” arguing that Shah’s actions, while criminal, were born of panic and coercion.

Under increasing pressure that his crimes might be discovered, Shah hatched an escape plan - to flee to Australia and leave his troubles behind. That plot unravelled after a contractor pointed out discrepancies. Still in his notice period, Shah immediately owned up when Watercare confronted him with proof of the fake invoices. 

The police nabbed him from his home before he could board the plane to Australia. 

The Trial & Verdict

Auckland District Court Judge Kate Davenport. Photo: Bankside Chambers

Shah pleaded guilty to one representative charge of obtaining by deception at Auckland District Court. Judge Kate Davenport described the case as a “significant breach of trust,” rejecting Shah’s requests for home detention and bail pending appeal. 

Judge Davenport noted the profound impact on Shah’s colleagues, many of whom felt “hurt, betrayed and humiliated”, reported NZ Herald.

Despite his guilty plea, remorse, and an offer to repay roughly half the stolen funds using his KiwiSaver (NZ’s superannuation scheme), a loan from his new Australian employer, and financial help from his parents, the judge imposed a sentence of two years and two months in prison. 

The sentencing included a 55% discount for Shah’s prior good character, rehabilitation efforts, and willingness to make reparations, but Judge Davenport stressed the need for deterrence and denunciation in such a high-profile case.

Shah’s lawyers said that his parents were remortgaging their house to pay some of the reparations, after the judge ordered him to pay back the $ 1 million. 

The FallOut

The scam has prompted Watercare and Auckland Council to review and strengthen their procurement and payment controls. 

The agency’s general manager of risk described the fraud as “sophisticated with complex backstories,” highlighting the need for vigilance and robust systems to prevent future breaches.

Shah’s story is a cautionary tale for public sector agencies across Australia and the region.

For Shah, the price of desperation was prison and public disgrace. For New Zealand and Australia, the incident is a wake-up call to safeguard public funds and restore faith in the systems that serve us all