Three jailed over super conspiracy

Three Sydney men have been sentenced to a maximum of five years in jail for conspiracy which nearly succeeded in defrauding $150 million from the Commonwealth Superannuation Scheme.

In sentencing today, New South Wales District Court judge Robyn Tupman said it was a well-planned fraud which involved large numbers of people who had spent a long time planning it.

"It is was no surprise that the conspiracy to defraud was able to succeed, given the lack of [internal] security at the bank. It is to be hoped that the problem has been rectified since the case came to light," she said.

Gregory James Bourchier, a 36-year-old former employee of JPMorgan Chase Investment Bank, was given a two-and-a-half-year non-parole period.

He will serve his sentence in protective custody because he is related to a police officer and a person who works for the Director of Public Prosecutions.

Forty-seven-year-old former Telstra technician Barry Osbourne and 57-year-old unemployed man Ernst Hufnagl received three-year non-parole periods.

Justice Tupman says the three knowingly played an important role in getting the custodian bank JPMorgan Chase to approve the transfer of $150 million into four overseas banks on Christmas Eve 2003.

"Each role was important but was limited in the conspiracy. They had nothing to do with the initial planning nor were they at the level of organiser or principal," she said.

An error in the instructions was picked up by a Greek bank and the bulk of the transfer was frozen several day later.

However $3.5 million was lost after being transferred to Hong Kong.

Greg Bourchier took transfer documents from JP Morgan Chase Bank and gave then to a ringleader.

Later, when he received a fax of the fraudulent request, he got a superior to authorise the transfer of $150 million.

Telstra employee Barry Osbourne manipulated phone lines to make faxes appear to have come from another bank.

Ernest Hufnagl impersonated a banker and rang Bourchier to verify the transfer instruction.

Justice Tupman says one of the conspiracy leaders has left Australia and she sent another to jail earlier this year after he pleaded guilty to a lesser charge.

She says the prosecution and defence had agreed that the man, whose name is suppressed, did not know the scope of the fraud.

However she now accepts that he was a controller.

"He was an organiser and manager and played a more significant role than any of the others did," she said.

Justice Tupman says Bourchier had no criminal record, and Osbourne and Hufnagl had never been involved in a crime of this size.

There was no evidence about what the men expected to receive for their participation, although Osborne has told his parole officer he expected to get the deposit for a home.

No misconduct charges for bureaucrat

Queensland's Director of Public Prosecutions (DPP) has decided charges should not be laid against a former senior government bureaucrat who was accused of official misconduct.

Scott Flavell was the subject of a Crime and Misconduct Commission (CMC) inquiry after he helped a friend and entrepreneur establish a private training company while he was the director-general of the Department of Employment and Training.

CMC chairman Robert Needham says the DPP found there was not sufficient evidence to charge Mr Flavell.

"The charge that was considered was the offence of the disclosure of official secrets. It's a fairly difficult provision. It has some formal legal requirements which the DPP considered the evidence could not satisfy in this case," he said.

The CMC has released a report about conflicts of interest between the public and private sectors.

It recommends former ministers and senior bureaucrats be banned for two years from lobbying government officers in areas they previously worked.

Fake engineer jailed for at least two years

A 26-year-old man who pleaded guilty to posing as a licensed Qantas maintenance engineer has been sentenced to at least two years behind bars.

Timothy McCormack worked in the job for 10 months between September 2006 and July 2007 even though he was not qualified.

Sydney's Downing Centre District Court heard McCormack was employed by Qantas in 2004 but did not pass the exam to obtain an engineer's licence.

In sentencing Judge Mark Marien said McCormack had embarked on a deliberate, calculated course of deceit to improve his status and pay rate at Qantas.

The judge described his actions as having potentially dangerous consequences.

He will be eligible for release in December 2010.

Fake prince jailed for 12 years

A Melbourne man who posed as a rich Arabian prince to con investors out of more than $7 million has been jailed for 12 years.

Omar Jihad Yusuf, 40, claimed he owned three banks, a $40 million home and three Australian islands, and posted photos of himself on his website showing him in helicopters, jets and yachts.

Yusuf pleaded guilty to 126 counts of obtaining property or financial advantage by deception.

The deception began after the father of five invited the public to invest in his company, On The Go Transport, to raise funds to buy trucks.

Victorian Supreme Court Justice Robert Osborn said Yusuf's "deception was deliberate and was pursued relentlessly for personal gain".

Justice Osborn sentenced Yusuf on Wednesday to 12 years in prison with a non-parole period of nine years.

ICAC recommends criminal charges

The Independent Commission Against Corruption (ICAC) has released its final report into corruption at Wollongong Council and is recommending that 11 people be charged with criminal offences.

The commission has asked the Department of Public Prosecutions to look at prosecuting the former Wollongong council planning officer Beth Morgan.

The commission found she abused her position to provide favours to developers with whom she was intimately involved.

ICAC also made corrupt conduct fndings against the developers Frank Vella and Bulent "Glen" Tabak, as well as senior council staff and former councillors.

The first ICAC report, released in March, questioned development consents granted by senior planner Ms Morgan to developers Frank Vellar, Glan Tabak and Michael Kollaris.

It also investigated alleged corrupt conduct by four ALP councillors, including former deputy mayor Kiril Jonovski.

It recommended the council be sacked.

The second report delivered a month later recommended suspension of a development application for the $100 million Quattro development.

Related:

Greens call for Royal Commission: NSW development
The New South Wales Greens say new concerns about the ICAC investigation into Wollongong Council are valid, after comments by standover man Ray Younan.

NSW to act on corruption findings
The Independent Commission Against Corruption (ICAC) has found former council planner Beth Morgan and her ex-lover, developer Frank Vellar, engaged in corrupt conduct.

NSW Labor faces royal commission call
The New South Wales Greens have called for a royal commission into state planning decisions, following a number of allegations the Government overrode advice to deliver huge windfalls to ALP donor.

Man jailed over $3m investment losses

An Adelaide businessman will spend a year in jail for failing to disclose details of an investment scheme.

Robin Brian Poumako, 59, and business partner Ann-Marie Donaldson, 46, each were found guilty of 44 charges relating to securities issued through their company International Finance Corporation.

District Court judge Peter Herriman said 19 investors lost more than $3 million in the scheme, which was used to buy properties including Fernilee Lodge at Burnside.

He dismissed the pair's argument that Burnside Council's delay over the Lodge redevelopment had hurt the scheme, saying both had acted recklessly and deliberately in withholding information from investors.

Poumako was sentenced to a year in jail.

Donaldson was put on a good behaviour bond because of her lesser role in scheme.

Two jailed over Customs fine default

Two Queensland men will serve four-year jail terms after failing to pay a $13.8 million fine for Customs and excise duty frauds.

In 2006, Jeffrey Andrew Bryce of Pelican Waters in Caloundra and Lawrence Eric Wright of Kenmore Hills in Brisbane were found guilty of 45 breaches of the Customs and Excise Acts.

The two were principals of Brisbane-based firm Labrador Liquor Wholesale.

In the year to May 1996, they exported seven shipping containers, informing Customs the containers held duty-free alcohol and cigarettes.

But the containers held only a small amount of alcohol and cigarettes as most of the duty-free goods had already been sold in Australia.

Westpoint promoter gets suspended sentence

A promoter for the collapsed company Westpoint has been given a suspended jail sentence after being found guilty of deceiving investors.

In May, Sydney man Neil Burnard was found guilty of nine criminal charges following an investigation by the Australian Security and Investments Commission (ASIC).

The New South Wales District Court has heard he deceived investors into putting the total of more than $1 million into the Kebbel Investment Bank, an entity that did not exist.

The court heard that Kebbel was a mezzanine company that channelled money into Westpoint in exchange for a commission.

The 48-year-old was given a 12-month suspended jail sentence and fined $50,000.

The judge said while Burnard knew he was stealing with unsophisticated investors, he played no direct role in the collapse of Westpoint and is unlikely to re-offend.

eBay fraud probe could take months

It could be months before police can unravel the spectacular collapse of one of the biggest Australian sellers on eBay, which left hundreds of users out of pocket hundreds of thousands of dollars.

Despite setting up a special PayPal fund to help some of the burned buyers with refunds, eBay has been criticised for not acting to remove the company's account earlier.

eBay users say they warned the auction site of problems with EBS International as early as 2006.

A group of disgruntled sellers say the auction site set up the special fund only to avoid being sued for negligence for allowing the company to continue selling on the site despite complaints.

EBS International, which sold items including exercise equipment, furniture and bikes on eBay under the name ebusiness-supplies, went into administration on Friday.

SV Partners, the company's liquidators, said it was being inundated with calls from eBay users seeking to be added to the list of creditors and would not be able to start its formal investigation for weeks.

Detective Senior Constable Michelle Cavanagh, a member of the fraud squad at Queensland Police, said she was waiting for advice from the liquidator to determine whether any criminality was involved. The fraud department had received 16 complaints so far, she said.

The list of people affected by the collapse of the company continues to balloon.

Yesterday, more than 450 people - who bought items from the seller at heavily discounted prices in the lead-up to its collapse - had left negative feedback for the seller.

Today, the number of negative feedback comments left in the past month sits at more than 650 and eBay has finally decided to disable the company's user account. But the tales of woe from hundreds of disgruntled users remain visible on the seller's feedback page.

In the three months before its collapse, ebusiness-supplies, the seventh biggest Australian eBay user in terms of the number of items sold, sold more than $1 million worth of goods. Most of those goods weren't delivered and the buyers have been left scrambling for their money.

Directors of EBS International, who recently relocated to China, have told liquidators that the company collapsed because an agent in China took the company's money without delivering goods.

But a large eBay seller who competed with ebusiness-supplies believes the collapse is suspect. The seller, who did not want to be named, said EBS International changed its product mix before its demise to favour large value items and sold them at prices below cost.

He said he purchased from the same Chinese factories as EBS International and did not accept the agent excuse because EBS International dealt only with factories directly.

PayPal managing director Andrew Pipolo set up a special PayPal fund to deal with this incident and said everyone who paid for items using PayPal would be entitled to refunds.

But those who paid using other methods such as a bank deposit or credit card must now rely on their banks and the liquidators to help them get their money back.

Before its demise, EBS International was selling items on a "pre-sale" basis, promising to deliver goods within 30 days.

PayPal's own rules state that, to offer PayPal as a payment option, sellers must guarantee delivery of pre-sale items within 20 days.

The loophole - and the fact that EBS International's PayPal account was soon emptied - meant many buyers were not entitled to refunds under PayPal's buyer protection program, despite a buyer protection logo being included in EBS International's listings. Furthermore, many of the bikes sold by the company are not covered by buyer protection because they are classed as vehicles.

Robert Vandermeer, who represents a coalition of eBay sellers, said PayPal only set up the special fund to reimburse buyers who lost their PayPal payments so it would not be legally liable for negligence.

"We will now have our lawyers look at the legality of the EBS listings and eBay's actions and inactions since then to explore the potential for a class action for sellers who used other than PayPal to pay EBS," he said.

"There's a growing case for negligence against eBay - this happened before their wide-open eyes."

Former Qantas executive jailed

Price-fixing ... the jail term comes on top of a $61m for Qantas (Get Image)

A former senior Qantas executive has been sentenced to six months in a US jail for his role in price-fixing on international air cargo.

Bruce McCaffrey, 65, was once the most senior Qantas executive in North America.

A US judge in Washington DC has sentenced him to six months in jail and given him a $20,000 fine after he pleaded guilty to taking part in an international scheme to fix the price for air cargo shipments.

McCaffrey has today told the court he is very embarrassed and that he would like to apologise to the court and to his family.

Qantas has already paid a $61 million fine and eight other airlines have pleaded guilty too.

David Dench jailed for fraud

Former North Melbourne football club captain David Dench has been sentenced to 14 months in jail for his part in a million-dollar fraud scheme.

Ten months of the sentence has been suspended.

The court heard Dench took part in the scheme to defraud Victoria University by creating false invoices for maintenance work.

A Victorian County Court jury found him guilty of 11 fraud-related charges.

Judge Jim Wood sentenced Dench to serve four months in prison with the remaining 10 months of his sentence suspended for two years.

In sentencing, Judge Wood said Dench was a cog in the machine to defraud Victoria University and his financial reward was minor.

But he said Dench had shown no remorse and still denied his guilt despite strong evidence against him.

Outside court, Dench's lawyer Bernie Balmer said his client is holding up well, but is worried about his family.

"We accept the verdict and we accept the sentence," he said.

"We won't be appealing, he just wants to get the next 3-and-a-half months out of the road, settle with the university and get on with life."

Dench captained North Melbourne in the 1977 grand final and was inducted in the AFL Hall of Fame in 2000.

Petroulias jailed for two years

Nicholas Petroulias accepted $41,000 in return for providing confidential ATO information.

Former assistant tax commissioner Nicholas Petroulias will spend at least two years in jail for corrupt conduct and unauthorised publication of documents, a NSW Supreme Court judge has ruled.

In December, a jury found Petroulias guilty of two offences - agreeing to receive money on an understanding that his role at the Australian Taxation Office (ATO) would be affected, and publishing documents without authorisation.

In passing sentence today, Justice Peter Johnson said Petroulias acted with "impropriety and deceit" while working in a position of trust.

"I'm satisfied that these are very close to the worst cases of crime of this type," Justice Johnson said.

Between 1997 and 1999, for the latter part of which period Petroulias was assistant tax commissioner, he accepted $41,000 in return for providing confidential ATO information.

Justice Johnson said that information was used by Petroulias and his private business partners to benefit their business.

"The information had been gathered by him to the benefit of him and his associates, to the detriment of their competitors," Justice Johnson said.

"A proper and impartial administration of the tax law is crucial to the operation of our federal government.

"By his crimes, the offender has ... damaged the public fabric of our community.

"The offender acted in this way for personal gain ... (a) clear conflict of interests between public duty and personal interest."

Justice Johnson sentenced Petroulias to a total of three years and two months in prison, with a non-parole period of two years.

Pharmacist jailed over PBS fraud

The Federal Government says the jailing of a central Queensland chemist shows that defrauding the Pharmaceutical Benefits Scheme (PBS) will not be tolerated.

The 60-year-old owner of the Clermont Pharmacy, Geoffrey Noel Lake, was jailed by the Brisbane District Court yesterday for four years for fraudulently obtaining $400,000.

Federal Human Services Minister Joe Ludwig says Lake used his parents' signatures or ordered his staff to falsely sign prescriptions that were not supplied.

He also used the identities of dead people to submit false claims.

Senator Ludwig says people who try to defraud Commonwealth programs will be caught and face serious consequences.

Corrupt immigration officer jailed

A senior Immigration Department officer received free overseas holidays and business-class airfaires for approving more than 100 applications for illegal Chinese immigrants.

David John Moon, 69, was sentenced to nine months' jail for receiving financial benefits for fast-tracking and approving 110 immigration applications between 1996 and 2000, which he knew did not meet the Australian Government requirements for obtaining citizenship.

The illegal immigrants included members of 40 families who paid an associate of Moon between $A10,000 and $US100,000 to have their applications assessed, the District Court heard.

The associate, George Ling, would then reward Moon with free overseas trips, which the Crown estimated to be worth $120,000, including one trip on which he took his family to New York, Los Angeles, Las Vegas and Hong Kong.

The scam was discovered when an audit of Department of Immigration files revealed that a large number of missing application files had all been determined by Moon, the court heard.

Moon tipped Ling off to the investigation and Ling fled overseas but was extradited to Australia in March 2006. He pleaded guilty to his part in the scam and will be sentenced tomorrow.

In sentencing Moon, Judge Colin Charteris said that, for a man of "second tier seniority" at the Immigration Department, the offence was a serious breach of trust that had been motivated by greed.

"It is common ground that Mr Moon received those benefits on the understanding that he would corruptly approve the applications," Judge Charteris said.

"What is evident is that the offender dealt with many of the applications in an extremely hasty manner [and] in some instances applications were lodged on one day and granted the following day by the offender."

Judge Charteris said Australia was a country where corruption was not an everyday event and he described Moon's actions as "appalling".

"Australians value their citizenship. It is not something for this offender or anyone to trade away by corrupt behaviour."

The maximum sentence for the offences was four years' jail.

However Moon's sentenced was reduced to 18 months in prison with a non-parole period of nine months, to compensate for a significant delay in bringing the matter to court.

Moon, who wore a grey tweed suit jacket, sat in the dock with his eyes downcast throughout most of the proceedings.

Following his sentencing he turned and smiled at family members who sat in court.

Govt to crack down on welfare fraud

The Federal Government is expanding its ability to crack down on welfare fraud.

The Government is providing $138 million for a new computer system to widen a program allowing the four major banks - Commonwealth, NAB, Westpac and ANZ - to provide Centrelink with information about suspected welfare cheats.

It follows a trial period with Commonwealth Bank and the money for the data-matching program was included in this week's Federal Budget.

Federal Human Services Minister Joe Ludwig says the changes should save taxpayers an estimated $600 million over four years.

He says privacy concerns have been addressed.

"Civil liberties are not eroded by this. There is a balance struck between ensuring that welfare fraud is addressed appropriately and ensuring that privacy is protected and that balance is there," he said.

"Centrelink does follow the strict Privacy Commissioner guidelines."

But the Federal Opposition says the Government has gone too far in its plans to scrutinise the bank accounts of some welfare recipients.

Opposition Leader Brendan Nelson says the Government is seeking 'big brother' type powers.

"Every person in the country is entitled to at least a minimum level of privacy," he said.

"It doesn't matter whether you're struggling and on Centrelink payments, or whether you're an everyday person out there doing a job."

Opposition human services spokeswoman Helen Coonan says she wants more detail on the plan.

Ms Coonan says the Coalition's access card, which the Government has scrapped, would have done the same thing.

"I think there's a very serious concern about how it is done, but the Labor Government is really playing catchup with the Coalition, which was well down the track of introducing an access card where all of these concerns had been very much addressed," she said.

'Rubbery fingers'

Meanwhile, civil libertarians have attacked the crack down as an attack on privacy.

Australian Council for Civil Liberties president Terry O'Gorman says the Government is using rubbery figures to justify an attack on people's rights.

"We hear year after year, more and more dollars are being brought in as a result of welfare fraud in court cases," he said.

"The Government doesn't need these powers. The money that's being thrown around, that supposedly will be saved, are the same sort of wild, plucked out of the air figures that we heard in relation to the access card that was ditched 12 months ago."

Top lawyers demand corruption probe

South Australia's top lawyers are petitioning State Parliament for an inquiry into corruption.

Petition organiser Craig Caldicott says the lawyers each have experienced first-hand, or heard anecdotal evidence of, corruption across all levels of government.

The list of supporters include Mark Griffin QC and SA Director of Public Prosecutions Stephen Pallaras.

Mr Caldicott says the group wants an independent commission against corruption set up in SA, like those elsewhere.

"Why is it only in South Australia we don't need such a body where every other state in Australia has similar concerns and has very functioning commissions into corruption?" he asked.

"We have the opposition calling for it, we have the independents calling for it and we now have a large number of lawyers who are calling for such a commission.

"It is a clear signal to the Government that this is what is needed."

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Former Prosecutor's safety risk in prison

A Tasmanian court has heard a former Crown Prosecutor who stole $200,000 seized from criminals can not go to Risdon Prison because his safety would be at risk.

Michael Paul Shirley has been in custody at the Hobart Remand Centre since his arrest in March.

For about four and a half years Michael Shirley, a senior crown prosecutor, stole varying amounts of cash from the Tasmania Police property store in Hobart.

Prosecutor, Mark Miller, said the money was mostly proceeds of crime seized from drug dealers.

Defence lawyer, Greg Richardson, said a spiralling gambling problem led Shirley to steal and he also gambled much of his wages and bank loans.

He said "it was close to half a million dollars wasted on keno."

Mr Richardson told the Hobart Criminal Court Shirley would have to serve his prison term in the Hobart Remand Centre because of the criminals he had prosecuted.

He said "he can't go to Risdon, they can't guarantee his safety."

Mr Richardson said his client had twice attempted suicide since his crimes came to light. He said Shirley's crimes were neither clever nor sophisticated and detection was inevitable.

He said his client has paid back part of the money and will be practically destitute when he leaves prison, with little chance of gaining employment.

Shirley will be sentenced later this month.

Elderly gambler avoids jail over welfare fraud

An elderly woman who pretended for seven years that her mother was still alive to collect her pension has avoided jail.

A court heard that Eleonora Spiniello, 72, from Fulham Gardens in Adelaide became addicted to poker machine gambling after her mother died in 1999.

She stole nearly $82,000 by failing to tell welfare authorities of the death.

Spiniello was jailed for three years but had the sentence suspended.

District Court Judge Gordon Barrett took account of the woman's age, medical history, her early guilty plea, efforts to pay back the money by selling her house and her having to care for a violent father.

Judge critical of banks, as fraudster gets 16 yrs

A man who defrauded banks of $25 million and used the same name as an American rock star to obtain credit has been jailed for 16 years.

In four years, Romeo Pacifico stole millions of dollars from 16 financial institutions to help his concreting business, repay spiralling loans and live the high life.

Almost $9 million is still missing.

At one stage, Pacifico, 43, changed his name to Richie Sambora, like the rock guitarist from the US band Bon Jovi.

In court, his head was bowed as he was jailed today for 16 years.

Judge Wayne Chivell said it was outrageous that Sambora had offended while already on bail.

He criticised him for failing to show remorse.

Sambora will be eligible for release in 10 years.

The judge said the case showed that financial institutions were willing to lend money on relatively flimsy evidence and the world's financial markets were only now coming to terms with a decade of irresponsible lending.

Fed Govt 'tough on welfare cheats'

The Federal Government is warning it will not be soft on welfare fraud, and people caught cheating the system will face tough penalties.

A northern New South Wales woman has been sentenced to three years jail after pleading guilty to using a false identity to collect Centrelink payments worth more than $195,000.

Human Services Minister Senator Joe Ludwig says rorting the system is unfair on those with genuine needs.

"The Australian Government takes social security fraud very seriously," he said.

"It's about ensuring that the taxpayer money goes to the right people, for the right amount at the right time."

Tags: community-and-society, welfare, government-and-politics, federal-government, law-crime-and-justice, fraud-and-corporate-crime, australia, nsw