Conviction for 6 phony sick certificates

A former Darwin IT worker at the Defence Department has pleaded guilty to using forged documents for sick leave.

The Darwin Magistrates Court heard Michael Wise, 32, took a total of 10 days’ sick leave over a three-year period.

He provided his employer with six doctors certificates, but his boss became suspicious and realised the certificates were identical, except for the date.

She called the doctor on the certificate, who confirmed Wise had not visited the GP on those dates.

The court heard Wise was paid more than $2000 for his time off.

His lawyer said he was depressed and had done something “very stupid”.

He said Wise was extremely embarrassed and could no longer work in places requiring security clearance.

He was convicted and put on a 12-month good behaviour bond.

Court report: A peek behind closed doors

The street out the front of the Shanghai No 1 Intermediate People’s Court in China was a place to which fellow correspondents and I had become quite accustomed.

So, when we found out that we were going to actually be allowed in to watch the verdict in the Rio Tinto trial, I’ll admit that there was a fair bit of excitement.

After eight months of reporting on the arrest and then trial of Australian Stern Hu – a trial that has seen Canberra and Beijing again trading blows over justice and sovereignty – we were finally going to get to see him.

Stern Hu and his three Chinese colleagues Liu Caikui, Ge Minqiang and Wang Yong were facing charges relating to receiving bribes and also offering inducements in exchange for the secrets of Chinese steel companies.

For our purposes, the entire hearing had been held behind closed doors. During the bribery part, Australian diplomatic observers had been allowed in (though they too would be denied access to the commercial secrets part).

So, in the early part of the trial, we were relying on Australia’s Consul General in Shanghai Tom Connor for any solid information at all about what was going on inside the court room.

When he emerged from the first day of the hearing dozens of reporters jostled and shoved to hear and record what he had to say.

He was being very careful about what he said but the gathered reporters, Chinese and international, were hanging off his every word.

And that’s how we proceeded throughout the case.

The only other sources of information were the defence lawyers. They would only confirm dribs and drabs of information and refused all requests for taped interviews.

So fast forward to the verdict and we were actually being allowed inside to do some first-hand reporting.

We exchanged our journalist cards for yellow passes, went through a security check and walked up the stairs and into the court complex.

We walked through a large polished, cream foyer with mosaics either side depicting historic court-type images from ancient Greece, Mesopotamia and China – this presumably gives the institution a link to human systems of justice developing over the centuries.

Mind you I’m not sure what the ancient Greeks would make of China’s court system with it complete lack of judicial independence and politicised outcomes.

We were ushered into the lift and emerged on a floor with police everywhere (it turned out they were there just to keep an eye on the 30 or so reporters allowed in).

When we walked into the court room, I noticed that there was nobody in there except journalists, police and some minor court officials.

In front of us were two large television screens with live connections to another court downstairs.

Oh, so we weren’t going to be actually allowed into the court room.

From there we watched four defendants brought in – they all looked like men without hope.

When they were expected to sit down the guards pushed down on their shoulders, when the time came to stand up and learn of their fate, the guards lifted them up from under their armpits.

They’d become life size bunraku puppets who couldn’t move without their handlers.

But which one of them was Stern Hu? I really couldn’t tell.

Fellow correspondent from The Australian Michael Sainsbury was sitting next to me – he couldn’t tell either: Nor could ABC producer Jiang Xin who was sitting on the other side of me.

The media uses two photos of Stern Hu supplied by Rio Tinto. Whichever one of the four he was he does not look like either of these photos now.

Apparently he was one with a full head of grey hair.

Then came the verdict – and it was massive.

The strategy of admitting to partial guilt and hoping for the mercy of the court had not prevented punishments which involved long periods of incarceration – between seven and 14 years.

Stern Hu and his three colleagues were found guilty of both accepting bribes and also receiving secret information relating to Chinese steel companies.

According to the judge, this information had been passed on to Rio Tinto headquarters and enabled the mining company to rip off Chinese steel companies to the tune of over a billion yuan when it came to negotiating on price.

Outside the court, again it was Consul General Tom Connor who announced the result to a huge scrum of reporters.

These significant sentences have left plenty of questions unanswered.

Because the trial was held in secret, most of the detail about what these men are said to have done is still not known.

Citing their “deplorable behaviour” Rio Tinto has now dismissed its four staff. The company’s official statement was all about them receiving bribes and did not mention the secret information said to have been passed on to senior people at Rio Tinto.

But as details of the secret part of the trial start emerging, questions are being asked about how much Rio Tinto has been involved in this matter as a company and if it plausibly says that it didn’t know what its staff were doing in its name in China.

Assuming that a successful appeal is virtually impossible, Australian Stern Hu will be spending the next nine years in Qingpu Prison on the outskirts of Shanghai.

He’ll be eligible to start applying for parole in around five years.

Rio employees to appeal jail terms

Two Chinese Rio Tinto employees jailed for stealing trade secrets and pocketing millions in bribes will appeal their sentences.

Wang Yong and Liu Caikui will appeal against their jail terms of 14 and seven years respectively, their lawyers said.

The other Chinese employee, Ge Minqiang, has not yet decided if he would challenge his sentence of eight years, his lawyer said.

However the lawyer representing Australian citizen Stern Hu, who was jailed for 10 years, has declined to comment.

Liu lodged his appeal on Friday (local time) while Wang will meet with his lawyer Monday morning to discuss his decision to appeal, the lawyers said.

Hu and the three Chinese staff were convicted on Monday of taking more than $14 million in kickbacks from Chinese steel firms during tense 2009 iron ore talks, which the court said they had helped ruin, and of stealing trade secrets.

The sentences provoked protests from the Australian Government, which said the prison term for Hu was “very tough” and “harsh”.

Hu, head of Rio Tinto’s Shanghai office, was sentenced to seven years for bribery and five more on the industrial espionage charge, but the court reduced the combined sentence to 10 years.

Chinese legal authorities also plan to take action against officials from Chinese steel companies who allegedly gave bribes to the four Rio executives, the Economic Observer reported Saturday.

After the convictions were announced Rio, a prime supplier of the raw materials that China needs to sustain its economic boom, said it was firing the convicted quartet and said it wanted to maintain good relations with Beijing.

School director guilty of fraud

The director of three Islamic schools in Perth has been found guilty of illegally claiming millions of dollars in Federal and State Government funding.

Abdullah Magar had been on trial for the past three weeks accused of inflating the number of students attending the schools to claim additional funding in 2005 and 2006.

He set up the schools in Dianella, Kewdale and Thornlie.

The principal of one of the schools was also found guilty of five fraud offences, while the principal of a second campus was acquitted of three charges.

Magar will face a sentencing hearing next month.

Two charged over development fraud

Police have charged two company directors with stealing more than a million dollars from a joint venture to redevelop the Sandringham Hotel site in Belmont.

A 69 year old man from Singapore and a 51 year old man from Joondalup were part of the Balneum Joint Venture, which is building three residential towers at the site on Great Eastern Highway.

The men were arrested earlier this month after an investigation by the fraud squad.

They are facing stealing and money laundering charges.

The two men appeared briefly in the Perth Magistrate’s Court this morning.

They are due back in court on the 21st of April

Investor keeps faith in perpetual-motion machine

A Northern Rivers man who invested in a company which claims to have developed a perpetual-motion machine says it should be allowed to continue its work.

Cycclone Magnetic Engines are said to produce power using magnets rather than fuel, and the company raised more than a million dollars from investors in the Lismore area.

Last year it was found guilty of misleading and deceptive conduct after proceedings brought by the Australian Securities and Investments Commission, and its appeal was dismissed by Queensland’s Supreme Court last week.

But shareholder Donald Greene says those who put up the money still have faith.

“We held a shareholders’ meeting prior to these proceedings being commenced because shareholders were being canvassed by ASIC to make complaints about our own company,” Mr Green said.

“There was a motion put at that meeting of shareholders and it was unanimous; that we advise ASIC to go take a running jump, it was our company, we know what it’s doing, and we had no concerns,” he said.

“It was raised many times in those court proceedings that ASIC could not get any complaints from any of the shareholders,” Mr Greene said.

“Despite all their efforts, they couldn’t get anyone to complain about it, therefore the shareholders must have been happy and satisfied with the conduct of the company,” he said.

Nuttall case mentioned in District Court

Corruption charges against former Queensland Government minister Gordon Nuttall have been mentioned in the District Court in Brisbane.

Nuttall is accused of corruptly receiving more than $150,000 from businessman Brendan McKennariey between 2001 and 2006.

He is also accused of lying to a Crime and Misconduct Commission (CMC) hearing.

The case will be mentioned again next week.

Shand to face new corruption trial

Queensland businessman Harold Shand will be retried on corruption charges.

He has pleaded not guilty to corruptly paying $60,000 to former State MP Gordon Nuttall in 2002.

A jury could not reach a majority verdict two weeks ago.

The new trial is expected to start in the District Court in Brisbane in July.

Gold Coast woman recovers money from Nigerian fraud

A woman on Queensland’s Gold Coast has become the first Australian to recover funds from an online Nigerian scam.

The 57-year-old woman sent more than $40,000 to Nigeria.

The West African country’s authorities have recovered a quarter of the money from the advanced-fee fraud scheme.

The woman, known only as ‘Ann’, says she thought she was helping an English widower, but he was a 25-year-old Nigerian student.

“He posed as four different collectors that is the travel agent, his boss, the doctor and then the police officer,” she said.

Detective Superintendent Brian Hay says the majority of money sent to Nigeria is from victims of online fraud.

“Queenslanders are now sending between $800,000 and $1 million every month,” he said.

The Nigerian man was sentenced to 19 years in jail last year.

Police union warning

Meanwhile, the Queensland Police Union (QPU) says it has alerted the fraud squad after hearing reports that someone is claiming to be collecting money for the union.

It is believed the man or a group of men have been asking people to donate money to the QPU in quantities ranging from $400 to $2,000.

QPU president Russell Armstrong says the organisation does not raise money in that way and people should ignore the calls.

Chartwell director pleads guilty to fraud

A former director of failed Geelong stockbroking firm, Chartwell Enterprises, has pleaded guilty to fraud in the Supreme Court.

Chartwell Enterprises collapsed in 2008, owing more than $60 million.

Ian Rau has pleaded guilty to eight charges, including dishonest conduct, and trading without a licence.

He will be back in court in June.

Hu trial ends in China

The trial of Rio Tinto executive Stern Hu has ended in Shanghai but no verdict has been announced.

Hu and his Chinese colleagues Liu Caikui, Ge Mingqiang and Wang Yong faced charges of receiving bribes and infringing commercial secrets.

Yesterday’s proceedings were held behind closed doors and only court officials, lawyers, prosecutors and the defendants were present.

“It has just ended,” said Yang Bailin, who is representing Yong.

The lawyer declined to comment on when the court might deliver its verdict.

Foreign Affairs Minister Stephen Smith says it could be several days before Hu’s fate is known.

“We’re also expecting in the normal course of events that the court would adjourn to … consider sentencing,” he said.

“So there may well be some time, a matter of days, between the end of the hearing today and those further processes.”

The four Rio Tinto executives have asked for leniency in sentencing because they have made certain admissions, although the amounts of money have been contested.

Last night Hu and his colleagues were expected to return to the detention centre on the eastern outskirts of Shanghai where they will be held until the trial result is announced.

Bribery charges

Hu was accused of receiving bribes in two amounts which add up to more than $1 million.

Mingqiang is said to have taken a similar amount and Caikui about half as much.

But the allegation against Yong is that he took 10 times the amount Hu allegedly did, receiving bribes worth more than $10 million.

Hu has already admitted he took some level of bribes, but who offered the bribes and what they expected in return is not known to those outside the court.

The confession makes it almost certain he will receive some form of jail term.

Mr Smith says he will not comment on whether the admissions have been coerced.

A Chinese newspaper has reported that a high-profile owner of a local steel mill has given written testimony regarding the bribery allegations.

According to the National Business Daily, Du Shuanghua said he bribed Yong with about $9 million to guarantee iron ore supply and enable his mill to carry out a massive expansion.

Yong has reportedly denied this.

According to one of the lawyers, one or several of the defendants today admitted to some level of guilt regarding allegations of “receiving commercial secrets”.

That is, that they offered inducements in return for the secrets of Chinese steel companies.

Six arrested in UK insider trading probe

A major financial services probe in Britain has led to the arrest of six men on suspicion of insider trading.

Officers from the Financial Services Authority also searched 16 homes and businesses in London and surrounding counties, seizing computers and documents.

The FSA says the six men are believed to have been involved in a sophisticated and long-running insider dealing ring.

Among the six are employees of Deutsche Bank, the hedge fund Moore Capital and the financial services firm, Exane. which is partly owned by French bank BNP Paribas.

The Allco show comes to town

This week’s public examination into the collapse of Allco Finance Group reads like a who’s who of the corporate world and highlights the conundrums created when public companies are run like private firms.

Former Allco chairman and former Optus boss, Bob Mansfield, will take the stand, as will Allco founders, David Coe and Gordon Fell, and the Government’s infrastructure adviser, Sir Rod Eddington.

Up first in the Federal Court in Sydney was former chief executive David Clarke.

He wore a grey suit and patterned grey tie, and sipped water before the cross examination by John Sheahan SC began.

Mr Sheahan is working for the receivers, Ferrier Hodgson, who are being paid by the banking syndicate to find out why the company failed in November 2008, owing more than $1 billion.

Allco’s market value was almost wiped out in 2008 as share markets plummeted amid the global financial crisis.

That from a company which had a market value of $5 billion at its peak.

The cross examination revealed the complexities of Allco’s structure. More than 50 related companies are in liquidation following the collapse.

Mr Clarke admitted that the company was too complex and said that negative perceptions of highly structured finance houses like Allco and Macquarie Bank affected the share price, which fell by nearly half in late 2007.

Under heavy questioning, he conceded that a $50 million loan to a subsidiary, Allco Principals Trust, was partly made to stop margin calls from affecting the Allco share price.

“One of the purposes of the loan was to allow APT to meets obligations… one of set of obligations was the margin loans,” he told the inquiry.

The main shareholders in APT were senior Allco executives and its main asset was Allco shares.

The loan and other transactions with Allco companies are among issues being investigated by Ferrier Hodgson.

Another transaction being investgated is Allco’s decision to takeover property group Rubicon, which was controlled by Gordon Fell.

Mr Clarke conceded “we knew there was a poor response from shareholders,” but Allco went ahead regardless.

Mr Fell, Mr Coe and another top executive got paid $63 million and more than $130 million in shares.

Related party transactions were all the go at Allco, despite dissent from independent directors and big and small investors.

Mr Clarke said the company hoped to stop using such methods as the business model “matured”.

The admissions kept coming.

Mr Clarke said the sale of assets was sped up in 2007 so the company’s financial accounts would look better to the market and to head off another fall in the share price under a “failure is not an option” strategy.

That included $68 million in asset sales to the Singapore Investment Fund, a fund set up by Allco to expand its business.

Mr Clarke said “I felt there was a good reason to be optimistic.”

“We, of course, did not know we were about to enter the global financial crisis.”

The public examinations represent a rare insight into the inner workings of the company.

The former executives have rarely commented on the high profile collapse of a local victim of the global financial crisis.

Essentially, Allco borrowed too much to fund its expansion, which included assets like trains, planes and property.

And the collapse of Allco has already hit reputations.

Mr Clarke, a former Westpac executive, did not stand for re-election to the board of wealth manager AMP last year.

Sir Eddington decided not to take up the role of chairman of ANZ after the collapse.

He was criticised by shareholders for his seat on the Allco board at last year’s Rio Tinto annual general meeting. Sir Eddington is also a non-executive director of the big miner.

The banks are expected to get a substantial proportion of their cash back. Ferrier Hodgson has already managed to sell assets such as the leasing business and shipping business.

There’s little joy for ordinary investors though. They could wait years to see any of their money.

Investors are waiting on the sidelines to launch a class action if this inquiry reveals the company has available assets.

Also waiting on the sidelines is the Australian Securities and Investments Commission.

They are probing whether Allco executives broke the law by doing deals in house.

As for Allco’s grand plans to takeover Qantas as part of a failed private equity bid, we are lucky that never happened.

The move was championed by Bob Mansfield, but it may have led to disaster for Qantas as the global financial meltdown hit.

Suspected rogue trader sentenced over escape plan

A former Macquarie banker who is under investigation for insider trading has been jailed for at least six months for trying to leave the country.

The Australian Securities and Investments Commission (ASIC) is investigating Oswyn De Silva for insider trading during the time he ran a $4.45 billion fund.

He pleaded guilty to contempt of court for trying to leave Australia to return to Malaysia.

His lawyers argued that he needed urgent medical treatment.

But in sentencing De Silva to nine months in jail with a non-parole period of six months, the judge said it was a pre-meditated escape plan.

The judge said the corporate regulator will need to act quickly in laying any charges.

He ordered prison health authorities to consult with doctors who have been treating De Silva for HIV.

His lawyers argued his immune system had fallen to a dangerously low level and jail would be bad for his health.

Centrelink worker created dozens of false accounts, court told

A Centrelink employee created false accounts to claim tens of thousands of dollars in social security payments, an Adelaide court has heard.

The District Court was told Kevin Lee McInerheney, 33, created 26 fake identities and used those of four genuine Centrelink customers to claim welfare payments over three months, totalling $66,000.

The prosecutor said most of the fraud happened after normal working hours and associated records were created in an effort to avoid detection.

McInerheney pleaded guilty to 30 counts of deception.

His lawyer asked that the man not be given an immediate jail term because of psychiatric issues.

He said the offending was out of character.

The prosecutor argued jail was warranted to send a clear message that Centrelink fraud, especially by an employee, could not be tolerated.

‘Fake music producer’ denies fraud

A Sydney court has heard that a man will plead not guilty to fraud after accusations he made $6.5 million by pretending to be a music producer.

Dimitri de Angelis was arrested at his Turramurra home on Friday night.

Police say he used fake documents to convince would-be singers he was a music producer.

De Angelis was charged with 27 counts of fraud. Today at Central Local Court, prosecutors laid an extra two charges against him.

De Angelis’ lawyer said the 44-year-old would plead not guilty to all charges and asked for a bail application hearing.

He also told the court de Angelis is no fraud, having published 10 music CDs.

The prosecutor said de Angelis has a criminal record in Western Australia where he once worked as a bouncer, but police are yet to provide the court with details of that charge.

The magistrate ordered the prosecutor to find proof of de Angelis’ criminal record.

The case has been adjourned for a week.

Execs face grilling over Allco collapse

Former Allco Finance Group executives are facing public questioning for the first time, as the company’s receivers try to work out exactly how it collapsed in 2008 under $1.1 billion of debt.

A week-long inquiry in the Federal Court has begun, with Allco’s former chief executive David Clarke on the stand. He faced rigorous scrutiny about the company’s liquidity problems and ill-fated acquisitions.

David Clarke told the court: “There was a great deal of activity that pointed to quite positive outcomes… we of course did not know that we were about to enter the global financial crisis.”

In particular, he was grilled about the motive behind a $50 million loan made by Allco to one of its related companies.

He also admitted the company sped up asset sales in late 2007 to make its bottom line look better.

The financial services group had an impressive rise, and was valued at close to $5 billion on the stock market in 2006. The company borrowed heavily to fund its expansion, and was soon unable to re-pay its debt.

A barrister for receiver Ferrier Hodgson today asked David Clarke if there was “a perception the business was too complex?”

“That’s correct,” he replied.

Allco was put into administration in November 2008. The receivers are representing a consortium of 12 lenders, including Westpac which has a $200 million exposure. The Commonwealth Bank has a $170 million exposure.

Allco’s former chairman Bob Mansfield will take the stand on Wednesday, with the inquiry expected to wrap up on Friday.

The Australian Securities and Investments Commission has also been investigating Allco’s collapse.

Assault charge for alleged fake doctor

Police have told the Alice Springs Magistrates Court a new example of deception has come to light since they arrested a man working unqualified as a doctor.

Balaji Varatharaju, 29, is facing 12 charges mostly relating to his employment at the Alice Springs Hospital as an intern.

He is also facing a fresh charge of assaulting a patient.

Detective Senior Sergeant Leith Phillips has told the court Varatharaju defrauded the Territory Government of $1100 in stamp duty by falsifying the value of a South Australian car he was registering in Alice Springs.

The court has also heard copies of a passport belonging to the brother of Balaji Varatharaju, 29, were found at his house.

In opposing his second application for bail, Mr Phillips told the court police considered Varatharaju a flight risk despite the fact South Australian police hold his passport.

The court heard Varatharaju’s student visa ran out last Monday and a bridging visa is due to expire next month.

Detective Senior Sergeant Phillips told the court colour photocopies of a passport belonging to Varatharaju’s brother, who he said was of a similar age and appearance, were found in the hospital accommodation where Varatharaju had been staying.

Allco chief says financial crisis totally unexpected

A public hearing in Sydney is investigating the collapse of the local investment house, Allco Finance Group.

Allco Finance Group collapsed in 2008 and a was high profile casualty of the global financial crisis.

The former chief executive, David Clarke, told a hearing in the Federal Court that no-one expected the crisis to occur and, in late 2007, he was optimistic that Allco’s share price would recover.

But he admitted the company sped up asset sales in late 2007 to make its bottom line look better.

He also admitted under cross examination that a $50 million loan to an Allco subsidiary was to stop margin calls which may have caused the share price to fall further.

Council manager spent funds on personal surveillance

The general manager of a council in Sydney’s inner-west has admitted spending council funds to employ a surveillance company to follow a man he feared was involved with his wife.

The Independent Commission Against Corruption (ICAC) is conducting an inquiry into the General Manager of Burwood Council, Pat Romano.

It is alleged Mr Romano used council funds to pay for security expenses for personal purposes.

Mr Romano has told the inquiry he spent more than $44,000 to conduct surveillance on a man he believed may have been harassing his family.

The inquiry also heard Mr Romano thought the man was involved with his wife.

He has admitted to becoming consumed and obsessed with the idea the man was having an affair with his wife.

Counsel Assisting the Commission, Chris Ronalds SC told the hearing that Mr Romano faces seven corruption allegations.

It is also alleged he used three council employees and a council contractor to build a new driveway at his home.

The ICAC is also investigating whether Mr Romano used the council’s depot staff, to help renovate a block of units owned by his wife.

It is alleged the work was carried out during council work hours and that some false time sheets were submitted so staff would still be paid by the council.