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Commercial, Financial and Corruption

Deputy Director: Berdj Tchakerian

Top five referring agencies:

  • Australian Securities and Investments Commission 77%
  • Australian Federal Police 14%
  • Australian Competition and Consumer Commission 4%
  • Australian Taxation Office 3%

Referrals: 106

Matters on hand: 282

Matters managed:

  • Complex tax fraud, often with an international dimension
  • Fraud by company directors and employees, other breaches of company directors’ duties
  • Corporations Act 2001 offences, including: insider trading, market manipulation, insolvent trading, and publishing false or misleading information about company affairs
  • Offences involving financial services or consumer credit, such as operating unregistered managed investment schemes or breaches of relevant licensing requirements
  • Bribery of foreign public officials and corruption involving Commonwealth officials
  • Serious cartel offences, including price fixing, rigged tenders and restricting outputs
  • Money laundering linked to financial crime

Role

The Commercial, Financial and Corruption (CFC) practice group prosecutes serious financial crimes, focusing on offences involving corporations, financial markets and services, large‑scale tax fraud, criminal cartel conduct and bribery and corruption of Commonwealth and foreign officials.

These white collar crimes are typically complex, difficult to detect and challenging to investigate, while prosecutions are often hard‑ fought by well‑resourced defendants. CFC prosecutions play an essential role in maintaining the integrity of Australia’s taxation and financial systems.

Trends in 2019–20 prosecutions

While the disruption caused by COVID‑19 since March has impacted on the work of CFC, it is pleasing to note prosecutors have adapted well and met the many challenges of working in a different way effectively. The restrictions have primarily impacted on the conduct of contested trials in all courts, resulting in many of those cases being adjourned. However, other cases have continued, such as appeals and sentencing hearings, with these often being conducted by way of video conferencing technology. Most staff have been working from home during this period and have successfully coped with the challenges this has posed. While there was an initial reduction in referrals from CFC partner agencies, this has not continued.

The Australian Securities and Investments Commission (ASIC) remains the source of most CFC referrals. In the past year, in addition to the usual types of matters referred by ASIC we also received some cases resulting from the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry. We expect even greater numbers of such referrals in the coming year.

CFC is seeing a consistent pattern of referrals from the Australian Competition and Consumer Commission (ACCC) relating to criminal cartel offences, which is a relatively new but very important area of work for the Office. Since undertaking Australia’s first prosecution for cartel offences in 2017, two companies have been successfully prosecuted in the Federal Court of Australia, resulting in the imposition of significant fines. Another company prosecuted for cartel offences pleaded guilty this year and is currently awaiting sentencing in the Federal Court. In addition, CFC is currently conducting prosecutions in a number of other cartel matters, with a total of 20 entities (both corporate and individual) facing charges.

Foreign bribery cases continue to be a major focus for CFC, with a number of complex prosecutions currently underway. The most significant of these involves the prosecution of a company and six of its employees in relation to the alleged payment of bribes to officials in the Philippines and Vietnam to obtain work on various infrastructure programs. CFC also has carriage of a number of domestic corruption cases involving allegations of corrupt conduct by public officials.

CFC is an active member of the Serious Financial Crime Taskforce (SFCT), which was established after Project Wickenby ended in 2015. The Taskforce was extended for a further four years from 1 July 2019 and will continue to focus on offshore tax evasion and illegal phoenix activity, as well as expanding its activities to deal with transnational and technology‑enabled crime and, more recently, serious financial crime affecting the ATO‑administered measures of the Commonwealth Coronavirus Economic Response Package.

Operation Elbrus is an SFCT matter investigated by the AFP. It involves a large‑ scale tax fraud relating to an alleged failure to remit Pay as You Go tax instalments to the Australian Taxation Office, involving more than $100 million. CFC is currently prosecuting 10 individuals with five other defendants having already pleaded guilty and been sentenced.

CFC prosecutors have embraced the CDPP’s digital transformation to find more efficient and effective ways to manage the document intensive cases which are a feature of CFC cases. Prosecutors have developed the capability to use digital tools in analysing complex briefs of evidence and also in marshalling material to facilitate the smooth running of cases in court.

Law reform

On 23 March 2019, the Australian Government announced the jurisdiction of the Federal Court would be expanded to include corporate crime. The CDPP continues its engagement with relevant stakeholders in relation to this policy.

On 10 April 2019, the Australian Law Reform Commission was commissioned by the Australian Government to undertake a comprehensive review of the corporate criminal responsibility regime. CFC provided assistance to the Commission, including meeting with members and responding to requests for information and data. The Commission’s report was delivered on 30 April 2020 and was tabled in Parliament on 31 August 2020. CFC has engaged with partner agencies to discuss the possible impact on our practice of recommendations in this report and will work with Attorney‑General’s Department in developing policies which are likely to crystallise from the report.

CFC has been an active participant in settling the Code of Practice for Deferred Prosecution Agreements. The new Deferred Prosecution Agreements scheme is contained in the Crimes Legislation Amendment (Combatting Corporate Crime) Bill 2019 introduced to the Senate on 2 December 2019, but yet to be passed.

Stakeholder engagement

CFC continues to play an active role in providing pre‑brief advice to partner agencies, including legal advice during active investigations. We engage with investigators early to provide feedback and guidance about what is required for potential briefs to meet the requirements of the Prosecution Policy of the Commonwealth. Advice covers a diverse range of topics, but might include identifying evidentiary gaps and what steps may be needed to address them.

We meet our partner agencies on a regular basis at the national, state and territory levels. Our regular collaboration often involves the delivery of training and, increasingly, law reform initiatives. We also provide information sessions on a variety of topics to representatives of our partner agencies.