Darwin business owner jailed for rorting Government Indigenous employment scheme

A Northern Territory business owner has been jailed for rorting an Indigenous employment Government scheme out of more than $200,000.

Timothy Schwab, 28, is the first person to be sentenced for defrauding the scheme, designed to get more Indigenous people working on infrastructure projects.

He arrived at the Supreme Court in his bank-loaned Mustang on Friday - the last time he'll walk free for the next year and a half after making 56 separate false claims for an indigenous employment subsidy.

Mr Schwab's business Timber and Steel Constructions was awarded six contracts through the scheme, introduced in 2014.

A scheme Judge Graham Hiley said Mr Schwab exploited and let down future indigenous employment.

The scheme has since been suspended.

The court heard he rorted taxpayers money by fabricating fact sheets by claiming inflated wages and hours over a period of 18 months.

A "substantial" amount of taxpayers money was also used to investigate the false claims.

Mr Schwab has paid back a portion of the funds, leaving $180,000 outstanding.

Judge Hiley said Mr Schwab has given no explanation other than greed.

In sentencing Judge Hiley also determined systems protecting the public's money were weak and he believed other companies have exploited the scheme.

He was sentenced to four years, but he'll only spend 18 months of that in jail.

Outside court, a family friend said he believed Judge Graham Hiley handed Mr Schwab a fair sentence but wanted to see punishment also handed to the people who designed the scheme.

"If you have a system that can't be broken, you can't break it. If you have a system that's got holes in it, something is going to fall through the holes," Charlie Riley said.

"What's the Government going to do about it? They've closed the scheme down but how much did it cost the NT ratepayers?"

Police are yet to lay further charges on companies for rorting the government scheme.