Last updated18:32, February 27 2017

JOHN WOUDSTRA/FAIRFAX NZ

Influence over the operation and profits from pokie machines is at the heart of a trial that began on Monday.

A father and son prominent in horse racing circles have gone on trial alleged to have deceived gambling authorities about the son's involvement with pokie machine operations, and distributing theprofits.

The charges against them do not specify sums, but the charitable trust in which it was alleged the son was "significantly influential"distributed more than $11.8 million in grants between December 2009 and July 2013, the Serious Fraud Office alleged.

It was alleged the son, Michael Joseph O'Brien, 57, of Blenheim, was running an "invoices for grants" scheme with racing clubs, from which he got an income and they received grants.

NIC GIBSON/FAIRFAX NZ

His ailing father, Patrick Francis O'Brien, spent much of his 83rd birthdayin a room at the Blenheim courthouse watching on a screen while thetrial tookplace atthe High Court inWellington. PatO'Brien was an accountant and a former chairman of Harness Racing New Zealand.

READ MORE: *SFO $30 million gaming charges, four plead not guilty *$30 million at centre of pokie probe *Inquiry into pokie grants looks likely to hit home

MikeO'Brien,Paul Anthony Max, 60, of Nelson, and a 56-year-old former Department of Internal Affairs employee whose name was suppressed, were also on trial. Each has pleaded not guilty.

ROBERT KITCHIN/FAIRFAX NZ

Due to ill-health, Pat O'Brien was allowed to remain in Blenheim and "attend" his trial by a video link.

The Secretary for Internal Affairs has to approve thosewith significant interests in the management, ownership, or operation of gamblingmachines and the charitable trusts that distribute the profits. It wasalleged that in 2005 MikeO'Brienwas considered unsuitable because of conflicting interests.

At the start of the trial, expected to last several weeks, prosecutor Grant Burston said MikeO'Brien had a deep involvement with racing,andhad described himself as a lobbyisthelping racing clubs obtain grants. Heinvoiced clubs forhis services.

When it became more difficult to getgrantsfor horse racing, MikeO'Brienwas behind the setting up of a gaming machine operator, Bluegrass Trust.

DEREK FLYNN/FAIRFAX NZ

Former Harness Racing NZ chairman Pat O'Brien, pictured in 2010.

With control of thenet proceedshe was able to ensure money could goto the clubs he invoiced,enablingthe schemeand his incometo continue, Burston said.

But the charges did not focus on the money O'Brien received.

MikeO'Brien and Max faced 10 charges alleging that, between 2007 and 2010, they obtained 10 venue licencesby concealing O'Brien'ssignificant interest in the ownership, management or operation of the trust that was licensed to run the machines, by transferring his interest to Max.

ROBERT KITCHIN/FAIRFAX NZ

Mike O'Brien invoiced racing clubs who received grants, it was alleged.

Mikeand PatO'Brien and the man whose name was suppressedfaced two charges together, of obtaining an operator's licence for Bluegrass, and control over the proceeds of gambling,by false representations that MikeO'Brienwas not involved.

MikeO'Brien andMax face a group of charges relating to getting venue licences for three businesses in 2009 and 2010 by concealing O'Brien's involvement.

ROBERT KITCHIN/FAIRFAX NZ

Paul Max allegedly held Mike O'Brien's interest in his name to conceal O'Brien's involvement.

-Stuff

The rest is here:

Deception alleged in control over pokie machine gambling and profits - Stuff.co.nz