We’ve all done it – called in sick to spend the day at the beach, headed home after a conference rather than returning to work for the last half hour of the afternoon, fraudulently raising $25 million worth of fake tax invoices against your employer over the course of 11 years and using the payments from those invoices for personal use…one might consider these all just part and parcel of the job. ‘Perks’, perhaps?
This is what the police are alleging against Mr Paul Whyte in the recent corruption charges laid against him, Mr Jacob Anthonisz and – very recently Mrs Paolo Colangelo. The allegations are that the team have siphoned $2.5 million from the Department of Communities over a period of at least two years. A scheme was formed whereby false invoices were raised almost monthly for works and services that were never carried out. Mr Whyte is said to have personally authorised the Department to pay those invoices into two company accounts that were under he and Mr Anthonisz’ control – Quadrant Analytics and iValuate. As assistant director general of the Department of Communities Mr Whyte apparently had the unchecked authority to sign off on payments for invoices of less than $50,000. Interestingly, perhaps because of this authority, the charges laid are for “corruption” under section 83 of the Criminal Code rather than for fraud or stealing as a servant. Corruption carries a maximum penalty of 7 years whereas under section 378 (7) the maximum penalty for stealing as a servant is 10 years.
Mr Whyte is a long-serving-high-level public servant and police are now looking into an 11-year history where they say the total amount of the false invoicing scheme could exceed $25 million (and some reports suggest even up to $40 million). Prior to his role as assistant director general with the Department of Communities Mr Whyte spent 10 years as the general manager of the Department of Housing and three years as executive director of Landgate. Concerns have been raised about just how deep and widespread the alleged corruption may flow. Former National Party leader Terry Redman suggested that investigations into Mr Whyte needed to push as far back as the Gallop administration and that close attention need be paid to the Royalties for Regions projects that involved Mr Whyte.
Mr Anthonisz on the other hand is, by occupation, a physiotherapist. He has an involvement in the horseracing industry which is one of the links to Mr Whyte. The horseracing industry also drew a link to Mr Craig Dale (since bankrupt) who, in 2016 took $3 million in funding for reconstruction projects in the East Kimberly town of Warmun after the area was devastated by floods. Mr Leigh Cleghorn who was once the chief executive of Warmun Community Incorporated said that Mr Dale “started invoicing the community for bogus work that was never done”.
Mr Whyte and Mr Dale are (were) part of the same racehorse ownership syndicate and were listed as parties to the sale of racehorse Darlington Abbey for $50,000 in February 2011. Mr Anthonisz, Mr Whyte and Mr Dale were all owners of at least one horse back in 2008 by the name of Hysteria. Anthonisz and Whyte are currently linked to more than 100 horses together.
As for 45 year old bookkeeper Mrs Colangelo little is known at this stage. Interestingly she has been charged with 9 counts of corruption rather than the 2 counts each for Mr Whyte and Mr Anthonisz.
Bizarrely there is no real indication on where so much money could have gone. There are a number of horses and some properties that have been frozen in connection with the allegations. Much of the swindled money is said to have been spent within the horse racing industry both at home and abroad in New Zealand as well as generally spent on ‘lifestyle’.
The question now is how such a scheme was so simple to conceive and carry out in this day and age of policy and procedure. Despite happening on one of the grander stages in the country, it is a reminder to all business owners to ensure that regular attention and review is paid to your internal policy and procedure. There is no suggestion that employees might be scheming to steal and of course this level of corruption is unprecedented however from time to time there can be losses and inefficiencies that slip through the administrative cracks due to poor internal regulation. Of course first and foremost is the undeniable value in encouraging and fostering a relationship of trust in the workplace, however ensuring that your governance documents and policies are in good and healthy order are some of the ways that Lynn and Brown can help safeguard your business against preventable losses.
About the authors:
Ben is a Perth Lawyer and Associate at Lynn & Brown Lawyers. He was admitted into the Supreme Court of Western Australia in July 2013, and specialises in both commercial law and dispute resolution matters. Steven is a Perth lawyer and director, and has over 20 years’ experience in legal practice and practices in commercial law, dispute resolution and estate planning.