International Fraud Awareness Week 2019

In 2019 we presented events for FCX subscribers and clients and friends of McGrathNicol to mark International Fraud Awareness Week. These events are aimed at leveraging the knowledge and experience of financial crime control experts to help organisations reduce the incidence and impact of financial crime.1

In Sydney we presented “Corporate Governance – When Neglect Becomes a Liability” to an audience of more than 200 at the Fullerton Hotel featuring award winning investigative Fairfax and ABC journalist, Adele Ferguson as key-note speaker. Adele provided an overview of several significant examples from the casebook of boards and senior executives who ‘got it wrong’ in terms of governing their corporations. The event was moderated by Fairfax journalist Angus Grigg and supported by a panel of experts in their respective fields: Professor Clinton Free of University of Sydney, Cris Parker of the Ethics Alliance, non-executive director Ming Long and Tony McGrath of McGrathNicol.  A broad ranging discussion covered many of the corporate governance issues confronting contemporary Australian business including:

  • the drivers of governance failure in first world economies with an ever-escalating focus on revenue growth, globalisation, technology and cost-cutting;
  • the impact of poor corporate governance on organisational reputation and investor and lender confidence;
  • the need for governments, corporations and the community generally to encourage whistleblowers to come forward with reports of organisational wrongdoing;
  • the need for boards to consider the interests of stakeholders other than shareholders; and
  • why poor governance continues to happen in spite of the exposures and the inevitable government and community outcry.

In Brisbane, FCX hosted a Government panel event titled “When good people do bad things”. Brisbane Forensic Partner Graham Newton moderated an expert panel comprising: Crime and Corruption Commission CEO, Jen O’Farrell; Queensland Integrity Commissioner, Dr Nikola Stepanov; and Member of the Ipswich City Council Interim Management Committee, Simone Webbe.

The event was attended by over 60 public sector employees from Queensland Government departments and statutory authorities. A highlight of the event was Jen O’Farrell sharing with the audience a six minute video of an interview between the CCC and former Ipswich City Council CEO, Carl Wulff. The interview was conducted with Wulff while on remand awaiting sentencing for accepting over $240,000 in bribes (he has since received five years imprisonment). The interview involved asking Wulff questions around why he accepted the bribes and how his life had changed in prison. Feedback received from the audience indicated that the video presented a powerful message in relation to the way in which occupational fraud offenders think prior to, during and post the commission of their offending.

Continuing our tradition of listening to and leveraging the experiences of convicted financial crime offenders, our Melbourne event included an insightful presentation by convicted insider trading offender, Christopher Hill.

Christopher told the seminar that while working at the Australian Bureau of Statistics in Canberra, he was offered the opportunity to ‘make some fast money’ in what has been described as “one of the biggest insider trading cases in Australian history”. He was arrested, interviewed, charged, fingerprinted and ultimately served three years imprisonment. The scheme saw Chris and co-offender Lukas Kamay (at the time a nab foreign currency trader) net more $7m from illegal foreign exchange trades based on ABS economic forecast data provided by Christopher to his co-offender a matter of hours before being officially disclosed to the market. Christopher shared his journey with those in attendance in order that they could leverage his experience and prevent similar conduct within their own organisations. Following Chris’ presentation, a panel comprising Forensic Psychologist Dr David Curnow; Managing Partner, Justitia Lawyers and Consultants, Sarah Rey; and Australian Institute of Criminology Principal Criminologist, Dr Russell Smith discussed Chris’ story with Christopher and with the audience.

The main takeaways from the event included:

  • the people who tend to become involved in ‘occupational’ financial crime are often just ordinary members of the organisation’s workforce;
  • opportunity is put in front of employees in organisations all over Australia every day and it is hardly surprising that some of those people sometimes take advantage of opportunities that seem to appear in front of them;
  • in many cases, occupational fraud offenders do not look for opportunity to commit fraud – opportunity presents itself and they in effect take advantage of it;
  • many occupational fraud offenders are able to justify or normalise their conduct – self-serving statements about “victimless crime”, “no real harm will be done” and “other people do this sort of thing” often feature in the narrative of the occupational fraud offender; and
  • organisations should have a strong culture of integrity and internal control but those alone will not prevent occupational financial crime.

1 – see for an overview of IFAW 2019 activity around the world