ASIC obtains court orders permanently banning Sydney financial adviser after Fraud Investigation

Forensic Accountants are frequently used by ASIC in their investigations

ASIC yesterday obtained court orders permanently banning Melinda Scott from providing any financial services and disqualifying her from managing corporations for 25 years after she defrauded clients of more than $3.6 million over 8 years.

The Supreme Court of New South Wales also made orders permanently restraining Roach Graham Scott Pty Ltd (RGS), a company of which Ms Scott, of Lilli Pilli, was sole director, from carrying on a financial services business or providing a financial service.

The Court declared between 9 February 2004 and 27 April 2012 both Ms Scott and RGS repeatedly and persistently engaged in dishonest conduct when providing financial services. In particular, the Court found Ms Scott and RGS obtained $3,632,759.46 from 56 separate clients, which Ms Scott generally used for her own personal benefit knowing that this was not in accordance with the clients’ instructions. The Court also found Ms Scott and RGS falsely told some clients their money had been invested in accordance with their instructions and was making returns.

ASIC’s investigation into Ms Scott’s conduct is continuing.

Ms Scott engaged in the aforementioned conduct when she was an authorised representative of Millennium 3 Financial Services Pty Ltd, a financial advice business owned by the Australia and New Zealand Banking Group Limited. Her authorisation was revoked on 15 May 2012.

ASIC first obtained court orders against Ms Scott preventing her from carrying on a financial services business in May 2012.

(Source: ASIC,  4 December 2012)

Out for 10 months: Oliver banned for illegal bet

Forensic Accountants are frequently used in illegal betting investigations

Disgraced jockey Damien Oliver has been disqualified for eight months after admitting to placing a $10,000 bet via a third party on a rival horse in a race in which he rode in 2010. Oliver has received a further two months’ suspension for using a mobile phone in the area of the jockeys room against the rules.

Oliver broke down as he admitted to stewards that he had placed the bet on a horse against which he was riding in a race at Moonee Valley two years ago, with former Western Bulldogs player and form analyst Mark Hunter named for the first time as the man who put the bet on for him.

Disgraced jockey Damien Oliver is disqualified for eight months after admitting to placing a $10,000 bet on a rival horse in a race in which he rode in 2010.

Oliver confessed that he had made the call on his mobile phone from the jockeys’ room at the track, another clear breach of Australian racing rules.

The 40-year-old cited psychological stress, injury and the imminent breakdown of his marriage as key factors for what his counsel, Robert Richter, subsequently described as “a single, isolated lapse of judgment“.

Stewards gave Oliver an eight month disqualification to be followed by a two month suspension allowing him to return to riding trackwork. During his disqualification, Oliver is banned from racetracks and stables.

After the hearing, Oliver issued a statement apologising to trainers, owners and supporters.

People must not assume that my misdeed and lack of judgment … reflects on jockeys or the industry broadly” he said.

I ask my fellow jockeys for whom I have the greatest respect to forgive my actions.

In a hearing at Racing Victoria headquarters the jockey at the centre of the carnival betting storm cut a slim, distressed figure, at times struggling to present his case as his voice cracked with emotion.

Oliver, who has won all four of Australia’s greatest races — the Melbourne Cup, Cox Plate, Caulfield Cup and Golden Slipper — has nerves of steel when seated on a horse, but he presented a fragile, emotionally vulnerable persona in the hearing as he recreated the events leading up to the fateful night at the Valley when he placed the bet on Miss Octopussy, the favourite in a race in which he rode the market’s second choice, Europa Point.

Oliver said that he had been under enormous stress because of problems in his marriage to his wife Trish, the mother of his three children. He admitted that at the time he also had a problem with alcohol, was prone to binge drinking sessions and, despite his considerable success on the race track, was losing his self confidence as a jockey.

My wife and I have three children and there was a period when she moved to her parents with the children. I feared I would lose my marriage. I felt very depressed about the personal problems I was feeling at the time.

Oliver said he feared that significant legal fees he would incur as a result of any potential marriage break up added to the stress he felt and clouded his judgment.

But, he insisted, he rode his horse to the best of his ability and gave it every chance to win.

He said that on the night of the race he called Mark Hunter as an ‘‘unplanned’’ and ‘‘spur of the moment decision’’ and spoke to no other trainers or officials.

Oliver was paid $11,000, he said, as a result of the bet, with the money being passed to him in cash by Caulfield-based trainer Robert Smerdon.

The period around 2010-11 was probably the worst period in my life” he said.

Rob Richter, QC, representing Oliver, had urged stewards to be lenient, citing Oliver’s age, his status in the profession and the fact that he had admitted his offence, allowing them to make a case, Richter said.

The lawyer contended that Oliver’s case should be measured against other jockeys who have laid bets in recent times, in particular Blake Shinn, the former Sydney rider, and Peter Robl, both of whom invested much greater amounts over a lengthy period.

Richter said that Oliver’s mental health and domestic situation should be powerful mitigation for what was, he argued, an uncharacteristic action by a man who had been at the top of the tree for more than 20 years. The fact that he had co-operated and shown both remorse and contrition should also be taken into account, Richter added.

Richter told the stewards that Lee Freedman, the trainer of Europa Point — and the man with whom Oliver had lived for several years as a teenage apprentice when he moved to Melbourne from his native Perth — had given the jockey a ”powerful character reference”, saying he had never known him to bet. Freedman had no problems with the ride on the night in question and was happy to employ Oliver as a jockey again,” Richter said.

At the time he committed these breaches he was subject to extreme personal health issues … at the time he was under treatment … he was suffering the after effects of injury and psychological distress.

Richter urged stewards to be lenient in their sentence, arguing that a lengthy disqualification at Oliver’s age ”would have a far greater impact than it would for someone who was not 40 years of age.

The breach is totally out of character.

In October The Age first revealed exclusively that the veteran jockey was under investigation for the alleged bet.

Then as Oliver prepared to ride highly fancied Americain in the Melbourne Cup two weeks ago, The Age broke the news that Oliver had admitted the alleged wrongdoing to Racing Victoria investigators — yet was free to continue his spring carnival campaign.

(Source: AAP)

 

New apps catch employees forging timesheets

Forensic Accountants are frequently used to conduct payroll fraud investigations

Employers are using technology to monitor underperforming workers, giving new meaning to the old adage “time is money”.

In one case, a new timesheet mobile app helped the operators of the Wakefield Park Raceway in Goulburn, NSW, catch two employees forging timesheets.

The managing director, Matthew Ronke, was on his way to the track, about 10 minutes away, when he drove past one of his employees, taking a leisurely stroll when meant to be at work.

Pulling out his iPhone, Ronke checked the staff sign-on sheets via a productivity app called Deputy 2.0 installed the previous week. The staff member had been fraudulently signed on to work by a colleague. The pair were fired.

Fraud such as this had once slipped through the folds of the old paper-based system, Mr Ronke said.

I don’t think it was a big problem but obviously it was a problem that we didn’t catch them doing it” he said.

Raceway staff are asked to register their arrival at work via iPads installed at the racetrack cafe.

The majority [of staff] are quite happy with it … and seem to like they can actually go in and check [that] their hours are correct; and they know that’s going into the payroll [system] and that’s what they’ll get paid.”

It’s not technically spying, according to Deloitte Digital lead partner Frank Farrall, who last year used Twitter to catch an employee – no longer with the team – who was struggling to deliver outcomes on a project.

They were saying, ‘I’m working all this time, doing all this and whatever,’ and we didn’t feel confident he was being truthful with us” Mr Farrall said.

The employees’ Twitter feed included numerous Foursquare check-ins at coffee shops around Melbourne when he was supposed to completing the project already behind schedule.

He was not meeting his end of the bargain and lying about it. The technology exposes that’s happening. It’s not spying, just reconciling the truth.

Some companies are using such apps to improve service or logistics rather than just keep an eye on employees. Google extended its Maps app with Maps Coordinate for enterprises in June, for example. The tech giant bills it as providing “real-time visibility” of team members and an ability to better manage job allocation .

Users say the technology provides a more granular way to measure worker output, and shifts the focus away from the number of hours in the office.

Apart from keeping an eye on staff and recording their hours, Mr Ronke said the biggest advantage of a smartphone-based timesheet management software was the ability to allocate tasks.

In Victoria last week for the V8 Supercar championship race – organised by Wakefield Park parent company Winton Motor Raceway – Mr Ronke was notified of a burst water pump. The push notification to his iPhone meant he could immediately organise it be fixed.

The last-minute requests and fluctuating business demand create extra opportunities for employees who make themselves available, he said.

I believe strongly that outcome-oriented work is much better than time-based work, rather than someone punching the punching clock who’s just not adding value” Mr Farral said.

(Source: Mahesh Sharma, SMH, 19 November 2012)

 

 

Alleged fraud involving more than $3m on business credit card

Forensic Accountants commonly investigate expense reimbursement fraud

A 40-year-old man has been charged with fraud after police allegedly seized $3 million worth of property – including wines, food, office supplies and cleaning products – they say he had stashed in warehouses across Sydney.

In January last year, police allegedly found a large amount of fraudulently obtained goods in a warehouse in Old Guildford in Sydney’s west and set up Strike Force Traver.

During the long investigation, millions of dollars worth of property were allegedly discovered at several warehouses across Sydney.

Police believe the items were bought illegally through a business using a credit card but never paid for between October 2010 and January 2011.

The man was arrested in Silverwater on Friday. He was charged with 27 counts of fraud, refused bail and will appear in Parramatta Local Court today.

Strike Force Traver, involving Fairfield local police, will continue their investigations.

Anyone with information should call Crime Stoppers on 1800 333 000.

(Source: Esther Han, SMH, 13 October 2012)

Carl Williams’ family sues the State of Victoria over drug kingpin’s brutal prison death

Carl Williams family sue for more than $1m in compensation claim (Source: Herald Sun)

The family of murdered gangland boss Carl Williams have launched legal action over his death.

His father George, daughter Dhakota and ex-wife Roberta are suing the State of Victoria as the operators of the jail where Williams died in 2010.

Williams was bashed to death by another inmate, Matthew Charles Johnson, in the top-security Acacia unit at Barwon Prison.

In a writ lodged in the Supreme Court yesterday, members of the Williams family allege prison management failed in its duty to protect him.

They claim the prison failed to properly monitor CCTV of Williams’ unit, or keep potentially deadly items from Johnson’s reach.

They claim Victoria Police had sought Williams’ cooperation on an investigation and agreed to “financial benefits” for his family.

The chilling moment Carl Williams’ killer Matt Johnson approached him with an exercise bike post.

Those included George Williams’ tax bill of $574,297 and Dhakota’s school fees, the writ alleges.

His death deprived them from those benefits and left them with lasting psychological injuries, they claim.

At all material times, the First Defendant’s (State of Victoria’s) servants or agents … knew or ought to have known of Carl Williams’ Police cooperation” the writ states.

The family of Melbourne gangster Carl Williams is suing Victoria’s prison system for a million dollars.

The writ alleges authorities should not have placed Williams with Johnson and knew, or ought to have known that:

  • whilst incarcerated at the prison, Johnson was a member of the Prisoners of War gang (“the POW gang”);
  • the POW gang were responsible for assaults on prisoners who had cooperated with police investigations;
  •  Johnson had previously participated in a serious assault on a prisoner at the prison who had cooperated with police investigations;
  • Johnson had previously used the seat of an exercise bike during an assault on another prisoner at the prison;
  • Johnson had a correctional history of 76 separate incidents including multiple assaults on prisoners and prison staff.

The writ states that after Williams requested a move into the same unit as Johnson, Penny Armytage, Secretary to the Department of Justice and Rod Wise, the Acting Commissioner of Corrections Victoria, were consulted.

Mr Wise emailed Ms Armytage that “there is little doubt that Johnson is capable of causing Williams harm”.

Wise stated Johnson could harm Carl Williams for financial incentives, an opportunity to enhance his reputation at the Prison and the fact of any further sentence following a charge running concurrently” the writ claims.

But both supported the move.

The Williams family alleges that the State of Victoria was negligent in that it did not carry out any risk assessment of the potential harm Johnson posed to Williams; did not ascertain whether Victoria Police had undertaken a risk assessment; did not properly assess Johnson’s prior conduct, and did not consider and assess the significant risks.

They also allege the prison gave too much weight to concerns Williams would stop cooperating.

The Williams family members are seeking a judge-only trial.

(Source: Anthony Dowsley, Herald Sun, 26 September 2012)

Coal seam gas pipeline in Queensland could result in compulsory acquisitions of land

Graziers in compulsory acquisition of land dispute with coal seem gas companies

Graziers may have to surrender parts of their land for a coal-seam gas pipeline after the Queensland government granted compulsory acquisition powers to a consortium of international energy giants.

The Queensland Governor-in-Council approved the pipeline for the $18.5 billion GLNG project as an “infrastructure facility of significance” on Friday, providing approval for compulsory acquisition if negotiations between gas company Santos and landholders break down.

The 420km underground pipeline will require a 40m-wide corridor through 177 properties to transport coal-seam gas from the Surat Basin to a liquefied natural gas facility in Gladstone.

Cabinet approved the Santos request for the approval, following similar agreements with two other international gas companies, as it ramps up construction to meet its deadline of export production by 2015.

Santos GLNG Pipeline manager Greg Jones said 87 of the 92 agreements were in place.

We are currently in advanced negotiations with the remainder and we are confident that we will secure these agreements through our current landholder engagement process” he said.

A spokesman for Deputy Premier Jeff Seeney said the company could apply for compulsory acquisition only as a last resort, and that landholders were compensated and had the right to object to the Co-ordinator-General.

Companies must provide extensive evidence they had taken reasonable steps to secure land agreements, he said.

IFS approval can only be sought for projects which meet the strict definition of a significant infrastructure facility that has the potential to contribute to the state through economic growth or new jobs and provide wider economic and social benefits to Australia, Queensland or the region” Mr Seeney said.

The GLNG project, a joint venture between Santos, Malaysian gas company Petronas, international resources firm Total and South Korea’s KOGAS, is expected to boost the state’s revenue by $4.1bn each year until 2033 and create 5000 jobs during construction.

In its application, lead partner Santos said the project would have a significant impact on Australia’s balance of trade, with agreements to total $120bn.

But AgForce president Brent Findlay urged all stakeholders to “negotiate in good faith” with realistic expectations.

He said the impact of clearing the easements could have a major impact on landholders’ farms.

We know that they’re rushing to get the pipelines in place from the gas fields so they can start to move the gas and earn money for the state” he said.

“They need to compensate and respect the landholder.

“It’s a big impost on landholders and every piece of land is different.”

Mr Findlay said it was “absolutely unforgivable” to cut fences or leave holes on properties where stock could fall, as some landholders had reported.

(Source: Rosanne Barrett, The Australian, 17 July 2012)

About Rushmore Forensic – Compulsory Acquisition Valuations

Andrew Firth is a director of Rushmore Group. He is a forensic accountant and business valuer. Andrew has conducted business valuations across a wide range of businesses and for different court jurisdictions. This includes compulsory acquisition valuations.

He is a member of the Institute of Chartered Accountants, and the ICAA Special Interest Group in Business Valuations. He has appeared as an Expert Witness in numerous jurisdictions.

Vic woman, UK firm settle thalidomide case

'Worst child poisoning case since thalidomide'A multimillion dollar compensation payment to a Melbourne woman whose mother took the drug thalidomide during pregnancy will provide her with care for the rest of her life, her lawyers say.

UK company Diageo, which distributed thalidomide, has settled with Lynette Rowe, who was born without arms and legs.

There was no settlement with the drug’s manufacturer Grunenthal.

Ms Rowe remains the lead plaintiff in a class action against Grunenthal as negotiations with more than 100 other thalidomide victims in Australia and New Zealand continue.

Ms Rowe, 50, wept as her father Ian spoke on her behalf.

The things she has achieved are absolutely amazing” he told reporters on Wednesday.

You don’t need arms and legs to change the world.

Ms Rowe’s lawyer Peter Gordon said the settlement was “more than adequate” to compensate Ms Rowe in the future.

She had struck a blow for “thalidomiders” all over the world, he said.

We are really proud of Lynette, we are really proud of her parents Wendy and Ian” he said.

Mr Gordon described thalidomide as “the greatest pharmaceutical disaster in history“.

Thalidomide drugs were distributed in Australia and New Zealand around 1960 and 1961 by Distillers, which became part of Diageo in 1997.

Mr Gordon said executives at Diageo were “good and responsible corporate citizens“, but that Grunenthal had taken a position they deplored.

The drug was withdrawn in Australia in 1961.

(Source: News, 18 July 2012)

About Rushmore Forensic

Andrew Firth is a forensic accountant who has conducted numerous investigations and other forensic accounting engagements in both Australia and overseas. He specialises in economic loss and loss of earnings calculations, personal injury compensation and other forensic accounting services for commercial disputes.  He is a member of the Institute of Chartered Accountants and has appeared as an Expert Witness in numerous jurisdictions.

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Can relatives of soldiers killed in Iraq in unarmoured vehicles pursue claims against the Government?

The UK Court of Appeal is currently considering whether relatives of servicemen killed in Iraq can sue the MOD

The following article is reprinted from the BBK Blog in the UK. It describes developments in the UK’s Court of Appeal in relation to military compensation claims for servicemen killed in Iraq.

Three Court of Appeal judges are to make a decision in the next week about whether the relatives of soldiers killed in Iraq in unarmoured vehicles can pursue claims against the Government.

Private Phillip Hewett, 21, died in July 2005 when a Snatch Land Rover was blown up. The same accident also killed 2nd Lt Richard Shearer and Private Leon Spicer. Similar explosions also claimed the lives of Lance Corporal Kirk Redpath in August 2007, and Corporal Ivano Violino in September 2007.

The MOD has been accused of being negligent in failing to provide armoured vehicles. The relatives of the servicemen killed are arguing that the provision of armoured vehicles could have saved their lives.

The MOD have said that decisions about battlefield equipment are for politicians and military commanders and cannot be the subject of a negligence action.

It certainly seems a difficult case to argue against; our troops go to war and risk their lives every day; they work under tremendous pressure in extreme conditions. Is it too much to ask that the MOD protect them as far as they possibly can by providing them with sufficiently protected vehicles and armour so that the risks inherently associated with going to war are minimised? There are, of course, always going to be casualties in a war but is it not the MOD’s job to ensure that the number of these casualties is kept as low as possible and that the equipment being given to our troops does not contribute to producing them?

On the other hand, supporters of the MoD’s position will say we are fighting a war, the MOD has updated vehicles when weaknesses have been highlighted, and they have taken vehicles out of commission when they are deemed as too unsafe for our troops to use; we only need to look at the upgraded Snatch Land Rover vehicles for confirmation. Wars are inherently more dangerous now than they have ever been; can the MOD really be expected to cater for every eventuality?

There are perhaps arguments for both sides here but one thing is for certain; if the decision comes back saying that it IS possible to sue the MOD for a failure to provide armoured vehicles this may have far reaching effects on the number of military compensation claims being pursued by injured soldiers, and by relatives of those killed in service.

(Source: Vicki Reid, BBK, 26 June 2012)

About Rushmore Forensic

Andrew Firth is a forensic accountant who has conducted numerous investigations and other forensic accounting engagements in both Australia and overseas. He specialises in economic loss and loss of earnings calculations, personal injury compensation and other forensic accounting services for commercial disputes.  He is a member of the Institute of Chartered Accountants and has appeared as an Expert Witness in numerous jurisdictions.

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Magistrate flabbergasted at Baden-Clay delay

Delay to forensic accounting report by the Queensland Police

It could take another five months for a forensic accountant employed by Queensland Police to analyse financial records belonging to accused murderer Gerard Baden-Clay, prosecutors say.

Mr Baden-Clay is accused of killing his wife and the mother of his three daughters, Allison, in their Brookfield home in April this year.

I can’t believe for any minute that it would take five months for an investigative accountant to look into the affairs of one defendant

Lawyers prosecuting the real estate agent briefly faced Brisbane Magistrates Court today to arrange the handing over of a “voluminous” brief of evidence to Mr Baden-Clay’s defence team.

Mr Baden-Clay was due to face the court via video-link from prison, but was instead represented by his solicitor Darren Mahony.

Prosector Danny Boyle told the court the Office of the Director of Public Prosecutions was ready to hand over 330 witness statements already contained in the brief of evidence, but said it could take up to five months for a forensic accountant with Queensland Police to provide her report on Mr Baden-Clay’s financial affairs.

Mr Bolye said police were also in the process of obtaining a further 50 to 100 witness statements.

Mr Boyle said police were also waiting on computer and phone examinations, as well as results from the post-mortem.

The post-mortem tests are outstanding … the forensics pathologist was away last week and this week until Wednesday” he said.

Magistrate Chris Callaghan said he was “flabbergasted” to hear of the lengthy delay.

I can’t believe for any minute that it would take five months for an investigative accountant to look into the affairs of one defendant” he said.

The defence can’t be asked to make any decisions without the full brief.

Mr Boyle argued the accountant’s statement was a “discreet matter” compared to other matters in the brief.

However, Mr Mahony also voiced concern at the delay.

I don’t want there to be any delay in provision of other material, because we’re waiting on the statement of one accountant” he said.

Mr Callaghan ordered that the brief of evidence, excluding the statement from the forensic accountant, be handed to Mr Baden-Clay’s legal team by August 20.

He ordered that Mr Baden-Clay face court again on September 3.

Mrs Baden-Clay’s body was found on a Brisbane creek bank 10 days after her husband reported her missing on April 20.

Earlier this month, Mr Baden-Clay was arrested and charged his 43-year-old wife’s murder and interfering with her body by moving her to the location where she was found.

Court documents have previously revealed that Mr Baden-Clay’s debts totalled about $1 million. It is alleged he stood to gain about $960,000 from his wife’s life insurance and superannuation policies.

He was refused bail and remanded in custody.

(Source: Marissa Calligeros, Brisbane Times, July 9, 2012)

Further Information – Forensic Accountant

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We provide services to corporations, law firms and individuals in Sydney, Brisbane, Melbourne, Adelaide, Perth and across Australia.

ADF ends pastoral future with compulsory acquisition

ADF and pastoralists in compulsory acquisition dispute

The drawn-out pastoral compulsory acquisition process for the Cultana Military Base expansion has been a bureaucratic mess and the federal government has been “disrespectful” to families who have been on the land for generations, according to pastoralist Bruce Nutt.

It has taken seven years to get to pre-acquisition point, in which time involvement in the Afghanistan conflict – a key reason cited by the Australian Defence Force for expansion in the area – is being scaled back.

Despite the government’s commitment to have troops exit Afghanistan at the end of 2014, an ADF spokeswoman said a “reduction in offshore operational commitments will not result in reduced training activity“.

She said while the expanded base was primarily required for the defence force, it would also provide training options for “selected coalition partners”.

About half of Pandurra Station, Port Augusta – owned by Mr Nutt – will be ‘swallowed’ in the $59.5 million expansion.

He is fighting against the acquisition of the lease, which has been in his family since 1895, and will affect the aspirations of his grandchildren.

I still do not believe it is in the right place and their environmental assessments have been completely off the mark” he said.

And I worry that they are just going to be hiring out this area to foreign troops, such as the Americans, as a money-making operation, which was not stated as the expanded base’s intended use.

He said an influx of Australian and foreign troops into the small, local communities could have negative social impacts.

Mr Nutt is also concerned that the expanded area – the existing base has severely degraded the fragile environment – will still not be big enough to offset the environmental impact, and the “net will be cast wider” next time, threatening the rest of his property.

He feels frustrated, overpowered, and devastated.

It is a horrific situation to be in” Mr Nutt said.

“Our past, present and future are being taken away from us.  My priority is to keep my land and we will continue to fight this process.

The four pastoral families embroiled in the army training area expansion are getting closer to holding direct negotiations with the government about the terms of the compulsory acquisitions.

The pre-acquisition process has finally started with the government flagging its intention, in extensive paid local newspaper advertisements, to acquire the pastoral properties.

(Source:  Stock Journal, June 28 issue, 2012, Louise McBride)

About Rushmore Forensic – Compulsory Acquisition Valuations

Andrew Firth is a director of Rushmore Group. He is a forensic accountant and business valuer. Andrew has conducted business valuations across a wide range of businesses and for different court jurisdictions. This includes compulsory acquisition valuations.

He is a member of the Institute of Chartered Accountants, and the ICAA Special Interest Group in Business Valuations. He has appeared as an Expert Witness in numerous jurisdictions.