A Police Investigation in NSW
On 9 November 2021 NSW Police and Service NSW made a joint media announcement to mark the establishment of Strike Force Sainsbery, a taskforce created to investigate fraudulent applications for COVID-19 business support payments.
Strike Force Sainsbury was established following the identification of anomalies by Service NSW fraud and compliance investigators. Irregularities are said to have been identified within a large volume of applications for financial support under the scheme. The identification of these anomalies initially resulted in the pause of all payments, although recurring grant payments for existing applicants have now resumed.
Service NSW CEO Damon Rees stated ““It is incredibly disappointing that deliberate, coordinated fraudsters have undermined the systems put in place to support the businesses of NSW in one of the most challenging times we have faced.”
State Crime Commander Assistant Commissioner Stuart Smith, spokesperson for the NSW Police, stated ““We cannot have those in need miss out on crucial support while greedy fraudsters live it up on the dime of NSW taxpayers.”
The Grants Scheme
The 2021 COVID-19 micro-business grant is a NSW State Government assistance scheme directed towards small business, sole-traders and not-for profit organisations with an aggregated annual turnover between $30,000.00 – $70,000.00.
Entities who meet these eligibility requirements and who have additionally experienced a decline in turnover of 30% as a result of the restrictions imposed under recent public health orders, can make an application seeking financial assistance. Applicants are required to evidence the decline in turnover by submitting financial records to Service NSW for a two-week period post 26 June 2021, and comparative records for the same period in 2019 or 2020.
The grant payment was originally $1500 per fortnight but the payment has now been reduced to $750 per fortnight in response to increased vaccination rates and a reduction in restrictions impacting small business operations.
The COVID-19 micro-business grant runs separately to the Federal government JopKeeper and early release super schemes, which have also attracted media attention in recent times following allegations of widespread rorts and misreporting by ineligible businesses and individuals, including large publicly listed companies.[1]
Potential Criminal Liability + Penalties
Fraud offences in NSW are legislated under the Crimes Act 1900 (NSW) (‘the Crimes Act’). A person who dishonestly obtains a financial advantage by way of deception is guilty of fraud and liability for a maximum term of imprisonment of 10 years pursuant to s. 192 of the Crimes Act.
The Crimes Act also contains offence provisions relating to dealing with, possessing and using identity documents to facilitate an offence (See Part 4AB of the Crimes Act) as well as offences relating to forgery and the provision of false or misleading documents to a public authority (See Part 5 and Part 5A of the Crimes Act).
In additional to potential terms of imprisonment, Courts can make orders requiring offenders to pay compensation to victims (including public authorities) when such offences are proven following criminal investigation and prosecution.
Representation
Investigations relating to applications for the COVID-19 micro-business grant and related criminal wrongdoing are ongoing. Recent public announcements are indicative that all past applications will be subjected to a high level of scrutiny by law enforcement in NSW.
Should you be contacted by police or have concerns that you are subject to a criminal investigation, it is essential you receive legal advice at any early stage. To discuss your options, call our Sydney Office of Hugo Law Group on (02) 9696 1361 to make an appointment to speak to one of our lawyers.
Damien Mahon, Senior Lawyer
[1] See for example: https://www.abc.net.au/news/2021-03-12/ato-owed-millions-jobkeeper-rorts-and-overpayments-early-super/13231222
