FRAUD AND CORRUPTION
NSW Trustee and Guardian Client Abuse - Fraud and Corruption
Former CEO of State Trustees Victoria given get out of gaol free card for misappropriating more than $300,000.00 of public funds.
Craig Dent, former CEO of State Trustees (the Public Trustee for Victoria), was sacked by its board of management in July 2018 after a five month long investigation substantiated allegations that he had misused more than $300,000.00 of public funds. Dent had been suspended on full pay since February 2018 pending the outcome of the investigation. The board engaged independent forensic accounting firm RSM Australia to investigate seven counts involving both the alleged misuse of the funds for his own personal benefit and abuse of public office. All allegations were found to be proven.
Several of the allegations related to using public funds for the writing, publication and promotion of a book on the history of State Trustees called The Creation of Trust and then travelling around the countryside at taxpayers’ expense claiming that he was promoting the book in the public interest. Dent also made use of two cars for his own personal benefit, something which he failed to declare, and which effectively increased the value of his remuneration package. Dent was purportedly on a salary of $430,000.00 P.A.
State Trustees referred the matter to the Independent Broad-based Anti-corruption Commission (IBAC) for further investigation. In April 2019, IBAC came back to State Trustees and advised that the findings which had been made against Craig Dent by RSM Australia should be referred to the police with the view of having him prosecuted. However, at the end of June 2019 it was revealed that the State Trustees’ board had come to a private settlement with Dent and that he would not be charged with any offences.
The decision not to prosecute Craig Dent is a matter of grave concern to every tax paying citizen of Australia as there is overwhelming evidence to show that he had misappropriated public funds and, because of the amount involved, a normal citizen could be expected to spend time in gaol if found guilty of the offence. Alana Bartels, a Public Trustee official from South Australia for example, was sentenced to more than five years imprisonment after being found guilty in September 2017 of stealing approximately $35,000.00 in clients’ assets, although her sentence was later reduced on appeal to serve a minimum of 21 months.
However, in Dent’s case it is understood that the decision was made not to refer him to the police for prosecution as it was feared he might raise other matters of which he had knowledge if he were to be charged with any offences. It is unclear whether those matters related to the workings within the agency itself or of his dealings with the State Government and its politicians.
The Victorian State Treasurer is the sole shareholder in State Trustees and, as such, would have been made aware in advance of the board’s decision not to refer Dent to the police for prosecution. The Attorney General as the first law officer for the State of Victoria has a duty to see that the law of the land is applied equally} to all of its citizens and that there can be no exceptions for people like Craig Dent simply because of what they might know and reveal about the wrongdoings of other Public Sector officials or politicians.
The decision not to refer Craig Dent to the police for prosecution was only made publicly known at the end of June 2019, when the Victorian Ombudsman came out with her unrelated and damning report on her investigation into State Trustees. The report cited numerous instances of incompetence and bad management which resulted in clients missing out on their government entitlements or being charged for fees and services which were not needed or were never provided. The 30 cases that the Ombudsman reviewed in depth resulted in State Trustees agreeing to pay or reimburse approximately $65,000.00 to 13 clients but this amount was still well below the estimated losses sustained by the clients. Quite clearly little had changed since the Ombudsman’s previous investigation in 2003 or the Victorian Auditor General’s report in 2012.
Shadow Attorney General calls for investigation into Public Trustee of Queensland.
Queensland’s Shadow Attorney General, Mr David Janetzki, has called on the Ombudsman to investigate the Public Trustee of Queensland (PTQ) after being inundated with complaints from PTQ clients and their families over the past year. Mr Janetzki attended the meeting held by the Australian Association to Stop Guardianship and Administration Abuse (AASGAA) at Southport on 21 July 2019 where he listened to the litany of horror stories that were told of clients losing everything they had ever possessed to the PTQ. In some cases many hundreds of thousands of dollars had been eaten up in a relatively short period through excessive fees and charges or lost as a result of gross mismanagement, negligence or incompetence.
There was a general feeling of helplessness amongst those in the audience who had seen their loved ones lose any say as to how their finances should be managed to a greedy Public Trustee which had no other interest than to wring every last cent they could out of the clients. Properties were being sold off and family members left homeless simply so that PTQ could charge further fees on the cash raised from the proceeds of the sales. In extreme cases clients had even committed suicide rather than go on living under an authority which has no regard for their needs and wishes and refuses to allow them the use of their own funds for basic necessities.
Attorney General, Ms Yvette D’Ath who did not attend the AASGAA meeting, told an Estimates Hearing on 26 July 2019 that the number of complaints being made against PTQ is quite small and dismissed them as being nothing more than the response of aggrieved clients or their families who did not believe somebody else should be managing their money, or their loved one’s money, for them. Does Ms D’Ath really believe PTQ’s clients are jumping off cliffs and killing themselves, as was revealed by family members at the meeting, simply because there is somebody else managing their finances for them?
Ms D’Ath is only too aware of the many numerous complaints that are being made about PTQ, both to her office and to the office of the Ombudsman. However, she would prefer to see families lose everything they have owned and accumulated in their lifetimes and have their lives destroyed rather than slow the flow of cash which is pouring into the Government’s coffers. For every property PTQ sells and a family made homeless, there is also a buyer and that means collecting exorbitant stamp duty fees, something which Ms D’Ath sees as having far greater importance than showing any compassion for PTQ’s hapless victims.
Anthony Marx’s article in Brisbane’s Courier Mail on 3 August 2019 is a landmark piece of journalism in exposing these State Government sanctioned rackets. It is the first time that a major capital city newspaper has made a genuine attempt to reveal the full extent of these scams that Public Trustees across the country are inflicting on their clients, even touching on the allegations of fraud which are rife at PTQ. The article is a must read by anyone having dealings with or contemplating having dealings with Public Trustees. Special mention must also go to Doug Young, a tireless campaigner behind the scenes, for the enormous amount of work he has put in over the years to have these rackets exposed and which played such an important role leading to the publication of Anthony Marx’s outstanding article. Anyone wishing to get in touch with Doug can contact him on his mobile phone at 0488 531824.
Ombudsman decides not to investigate fraudulent payments made by NSW Trustee and Guardian.
The NSW Ombudsman has decided not to investigate payments NSW Trustee and Guardian (NSWTG) had been making from its clients’ funds to a caravan park and holiday resort located in Laurieton in northern NSW. NSWTG made the payments under the pretence of paying a bogus contractor which in reality did not exist. The caravan park business is owned by Debbie Albert, a former real estate agent who had been selling properties on behalf of NSWTG, but whose franchise with Elders Real Estate was terminated at the end of 2016 for professional misconduct and malpractice. The Ombudsman came to his decision in spite of the fact that I hold copies of the bank records for the caravan park resort concerned which clearly show NSWTG as having made the payments to it for services which were never provided.
In the case of Marilyn (see Marilyn’s story), NSWTG had taken the funds from her account while she was their client to pay Ms Albert’s fraudulent charges. These charges had been invoiced through Ms Albert’s non existent contractor business to have Marilyn’s home cleared of its contents. In reality Ms Albert had arranged for Marilyn’s lifetime collection of personal possessions of low cash value, including family photographs, to be taken away by the local council paid for out of Marilyn’s council rates. NSWTG had then gone and told her that everything in her home of value had been stolen by her son and I. It had been necessary to hire a private investigator to have Debbie Albert revealed as the real owner of the bank account into which NSWTG had paid Marilyn’s funds.
The bank records also revealed Ms Albert had received payments from the accounts of two other named clients of NSWTG around the same period that she had received the payment from Marilyn’s account. These payments were also related to clearing out the contents of the clients’ properties by her non existent contractor business. In addition, Ms Albert’s records showed NSWTG had been making regular periodic payments to her caravan park resort account for reasons which were not clear. The Ombudsman acknowledged that Ms Albert had engaged in fraudulent conduct but stated that the evidence did not prove that NSWTG had made the payments knowing the charges they were paying were fraudulent and he refused to take the matter any further.
NSWTG, for its part, made it very clear that as I was now Marilyn’s financial manager, it was my responsibility to take whatever action was needed to recover the funds which they had paid out of her trust account for the fraudulent charges. NSWTG claimed it had always acted in good faith in its dealings with Ms Albert as a real estate agent and was not liable for and took no responsibility over what she had done. The police were not prepared to investigate the fraud claiming that any complaint would need to come from NSWTG as they were Marilyn’s financial manager at the time the fraud occurred. This means I am only able to take civil proceedings against Ms Albert for the fraud she perpetrated against Marilyn. She will not have to face criminal charges or even civil proceedings for the losses she has caused other clients of NSWTG who remain under NSWTG’s management.
This matter was referred to the Attorney General, the Shadow Attorney General, ICAC and the Local Member for Wyong, Mr David Harris, whose electorate is in part of the area in which Ms Albert operated. The Government refused to do anything about the fraud and the Opposition declined to raise the matter on the floor of the Parliament. NSWTG has an obligation to recover the funds it paid to Ms Albert from its clients’ accounts, where the clients remain under NSWTG’s management, and to see that Ms Albert is held accountable for her fraudulent conduct. Instead the clients have been left to suffer the losses. Quite clearly NSWTG is more concerned as to what Ms Albert might reveal about the role of its own officers in what took place if they were to take her to court rather than protect the interests of their clients.
A much bigger problem is that this racket is not just confined to Debbie Albert when the properties of NSWTG’s clients get cleared out and sold. It seems to be virtually standard practice for NSWTG to rush clients off into nursing homes and then sell their properties against their wishes in order to widen the scope of assets which attract NSWTG’s fees and charges, not to mention the stamp duties collected by the State Government from the purchasers of the properties that NSWTG sells. These are huge revenue raisers for the Government and explains why the politicians will not do anything to stop the practice. They know that It is very seldom anyone will go to the expense, as I went and did, of taking NSWTG to court over the losses all this causes for the clients. The case over which I took them to court ended up in a $135,000.00 pay out for the client (see Marilyn’s story).
It is also very clear from the feedback I have received on my website, that thefts from properties put up for sale by NSWTG are very common. These thefts should be reported to the police and the clients’ insurance companies as a matter of practice but instead NSWTG simply passes the blame on to other members of the clients’ families and then does nothing further about it. NSWTG’s staff are aware that NSWTG normally does not report thefts from clients’ properties to the police and this is undoubtedly a major factor as to why these thefts are so prevalent in NSW. However, when I have drawn this to the Ombudsman’s attention, the response has been he can see little point in making it standard policy as the police were unlikely to find the time to investigate the thefts anyway.
This is a most unsatisfactory response for the Ombudsman to make and I have noticed from my own dealings with his office that the standards he sets in conducting his investigations fall well short of those of his counterpart in Victoria with whose office I have also had dealings. For example, when I made a complaint against a government agency in Victoria, a member of the Ombudsman’s staff met me at the agency involved and we went over the files together. This ended up with the dispute being resolved. By comparison, the NSW Ombudsman refused my request to be present when a member of his staff examined NSWTG’s files and I had to take his findings on trust.
The Ombudsman’s findings wrongly identified a genuine contractor business (Inside Out Home Services) as being responsible for the clearance of Marilyn’s property and which ended up in the disappearance and theft of everything Marilyn had owned. He also failed to identify that NSWTG’s records surrounding the sale of Marilyn’s home had been compromised and dates altered. This was only revealed when I subpoenaed NSWTG’s files for the court case against it more than a couple of years later.
Part of the problem lies in the fact that the Ombudsman’s office depends on the NSW Government for its funding while the NSW Government in turn strongly benefits from NSWTG’s rackets and dodgy practices. This is particularly the case when the Government has so much of its funds tied up with NSWTG. In this situation the Ombudsman is hardly likely to cut back a major source of his own funding by exposing the rackets which are raising the funds to pay his staff and in any event he would be placed under enormous political pressure if he tried to do so.
This is the key difference between NSW and Victoria.. State Trustees in Victoria is a state owned company run with commercial objectives. Unlike NSWTG which is run as a government agency, State Trustees is expected to be self reliant and to make a profit. It receives just over $18 million each year from the Victorian Government to provide services for clients that can’t afford to pay for them themselves while the Government has very little of its own funds invested with State Trustees. It is this low level of government funding which makes it much easier for the Victorian Ombudsman to carry out her investigations into State Trustees with the transparency that she does. This would never happen in NSW because of the amount of government funding being put into NSWTG and any attempts to expose what is going on through the media get quickly shut down.
The government funding is purportedly provided to assist the more disadvantaged of NSWTG’s clients. In reality these funds are pooled with those of the clients making it difficult for the clients to identify the individual ownership of their funds. Clients are provided with statements showing their funds are being held in low yielding cash at call accounts but in reality the clients have no way of knowing where NSWTG is actually holding their funds. Suspicions are raised by NSWTG’s reluctance to release funds for essential everyday needs and services, or property repairs and maintenance, when this should not be a problem with their funds being held in cash. Private managers are required to keep their own funds separate from those of their clients in order to prevent rorting. NSWTG should be required to do the same.