Australian Institute of Criminology

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Policing and prosecutions

In addition to gathering information from agencies on their experience of fraud and their fraud control arrangements, the AIC also gathered information from the AFP and CDPP on certain aspects of fraud investigations and prosecutions that they undertook in the preceding year. Unfortunately, it was not possible to relate these data back to individual agency responses and hence to report on which types of fraud matters resulted in differing policing and prosecution outcomes. Data collection practices within the AFP and CDPP also differed in various other respects, as described below.

Australian Federal Police reporting

Paragraph 8.15 of the Guidelines requires the AFP to provide the AIC with the following information each year on fraud matters it has investigated:

  • the number of referrals accepted and declined by the AFP;
  • the number of accepted referrals that led to prosecution;
  • the type of offences;
  • the estimated financial loss investigated;
  • fulfilment of AFP service standards relating to case handling; and
  • results of the investigation quality assurance review process, with an analysis of best practice and deficiencies.

The numbers of referrals accepted and declined

As defined by the Guidelines, fraud-related referral records held by the AFP included the following case types:

  • civil proceedings;
  • corporate bankruptcy;
  • corruption;
  • counterfeit currency;
  • fraud;
  • identity fraud;
  • money laundering and Anti-Money Laundering and Counter-Terrorism Financing Act 2006 offences; and
  • trans-economic crime.

During 2009–10, the AFP accepted 94 referrals and declined 29. This compares to 368 and 47 respectively in 2008–09. The number of referrals has decreased considerably since 2008–09. This is due primarily to changed business rules in the recording of undeclared currency referrals. Previously, each referral, regardless of outcome, was recorded as a separate case; in 2009–10, this practice was amended so that only cases proceeding to either arrest or summons were recorded. During 2009–10, 24 matters resulted in legal action, compared with 48 in 2008–09. This may include matters that were referred to the AFP in previous financial years. Losses involved in the 94 matters accepted for investigation during 2009–10 were estimated at $38,706,165, compared with losses of $70,068,615 in 2008–09 for the reported 368 cases. The reduction in losses is most likely attributable to the reduction in matters accepted for investigation by the AFP.

The type of offences

The type of offences recorded for 2009–10 and their frequency are shown in Table 26.

Table 26: Type and frequency of offences recorded by the AFP 2009–10 (number of offences)
Incident type Offences
Civil proceeding 0
Corporate bankruptcy 0
Corruption 7
Counterfeit currency 4
Fraud 79
Identity fraud 41
Money laundering (Financial Transaction Reports Act 1988) 91
Trans-economic 0
Total 222

Source: AFP internal data

Changes to business rules for recording undeclared currency referrals, grouped under ‘money laundering’, has resulted in a decrease from the 371 money laundering offences recorded in 2008–09.

Fulfilment of AFP service standards relating to case handling

The AFP assessed service standards by conducting a random sample of 50 cases referred during 2009–10. The following results were reported:

  • 100 percent of all cases reported included a completed Case Categorisation and Prioritisation Model, which took into account the views expressed by agencies and impact and priority.
  • 74 percent of applicable cases included acceptance or rejection letters to the agency within the 28-day timeframe. In instances relating to the referral of complex matters, the AFP adopted a position of extending the 28-day evaluation period to undertake an appropriate assessment of the case. When this occurs, the AFP informs the referring agency that an extended evaluation period is necessary.
  • 100 percent of acceptance letters contained either the contact details of the case officer and/or contact details for the Operations Monitoring Centre.
  • 68% of the 50 cases did not require a quarterly case management report (QCMR). Of the cases that required a QCMR only 31% complied.
  • The AFP Police Real-time Online Management Information System (PROMIS) was not able to accurately capture information about change of case officers.

These statistics are consistent with the figures provided by the AFP for the 2008–09 random sample on all indicators.

The investigation quality assurance review process— best practice and deficiencies

During the reporting period, the AFP received no requests to conduct quality assurance reviews (QARs). The purpose of a QAR is to establish whether an investigation was conducted in a way that complies with the Australian Government Investigation Standards 2011 (see paragraph 3.4.3). The AFP has been working closely with the Attorney-General’s Department on planned amendments to the Commonwealth Fraud Control Guidelines and the Australian Government Investigations Standards both of which require Government Agencies to participate in the QAR process.

The AFP has advised stakeholders that an additional 34 AFP members have recently completed specialist QAR training. These additional trained members will allow the AFP to conduct up to 10 QARs per annum.

Commonwealth Director of Public Prosecutions reporting

In accordance with paragraph 8.16 of the guidelines, the CDPP provides information each year on prosecutions undertaken that involved fraud against the Commonwealth. The CDPP is required to provide information to the AIC on:

  • the number of referred and prosecuted fraud-type matters;
  • the number of charges prosecuted in fraud-type cases under Commonwealth legislation; and
  • the amount initially charged in each fraud-type prosecution (from 2001–02 onwards) and the outcomes of those prosecutions, including:
    • the number of convictions
    • the number of acquittals
    • amounts ordered by courts by way of reparation orders under the Crimes Act 1914 (Cth) and pecuniary penalty orders under the Proceeds of Crime Act 1987 (Cth).

The number of referred and prosecuted fraud matters

In 2009–10, 5,010 defendants were referred to the CDPP for prosecution involving allegations of fraud, compared with 5,507 defendants referred in 2008–09. The types of fraud involved included obtaining financial advantage from the Commonwealth, general dishonesty, social welfare offences, tax fraud, forgery and medifraud. Of these, 4,913 were prosecuted, resulting in 4,180 convictions and 29 acquittals. This is an improved rate of prosecution compared with 4,821 prosecutions resulting in 4,089 convictions and 36 acquittals in 2008–09, although the conviction rate was 85 percent in both years.

The number of charges prosecuted in fraud type cases under Commonwealth legislation was 14,295 in 2009–10 across all Australian jurisdictions (Table 27), compared with 16,890 in 2008–09, a decrease of 2,595 charges prosecuted, consistent with a reduction in the number of defendants being prosecuted in the current reporting period. Clearly, the high conviction rate reflects the nature of matters chosen for prosecution, although in serious fraud cases generally, it is usual for accused persons to plead guilty once the prosecution case is known (Smith 2003). Only in a small proportion of cases will contested and complex matters proceed to trial, and few of these will result in acquittal (Smith 2003).

Table 27: Prosecution of fraud by jurisdiction, 2009–10 (number)
State and territory Referrals Defendants prosecuted Convictions Acquittals Charges prosecuted
NSW 1,501 1,442 1,147 17 5,368
Vic 991 893 781 2 1,846
Qld 1,130 1,163 1,063 5 2,445
SA 429 506 444 0 1,991
WA 319 454 392 3 1,066
Tas 160 147 131 0 877
NT 104 85 41 0 279
ACT 376 223 181 2 423
Total 5,010 4,913 4,180 29 14,295

Source: CDPP internal data

The CDPP laid charges in 2009–10 involving a total of $99,899,333.98 in respect of all types of fraud, which was almost $20.8m greater than in 2008–09, when $79,110,493.46 was alleged to have been defrauded. In 2009–10, the CDPP secured $59,337,503 by way of reparation under the Crimes Act 1914 (Cth) and pecuniary orders under the Proceeds of Crime Act 1987 (Cth)—some $14m more than the $45,277,119 secured in 2008–09.

To complement the data provided by the CDPP, the Australian Bureau of Statistics also collects data from Australian higher courts (Supreme and Intermediate), Magistrates’ and Children’s Courts. Not all federal offences are prosecuted by the CDPP, as some are heard in state and territory courts in conjunction with other local offences prosecuted by other agencies.

From the period 1 July 2009 to 30 June 2010, 14,007 defendants charged with fraud and deception who appeared before all courts had a total of 49,009 federal offences finalised—2,686 in the Higher Courts, 45,979 in the Magistrates’ Courts and 344 in the Children’s Courts (ABS 2011). Of the 14,007 offenders, 25 percent (n=192) were represented in the Higher Courts, 35 percent (n=13,027) in the Magistrates’ Court and 5 percent (n=10) in the Children’s Court (ABS 2011). Of these defendants, 34 percent (n=4,821) had a principal federal offence of fraud and deception.

Overall, 99 percent of fraud offences were proved, withdrawn or disposed of other than by acquittal (ABS 2011). This is the same rate as for the CDPP’s conviction rate reported in the current survey (99%). This is understandable as most federal prosecutions relate to fraud offences.

Penalties for offences relating to fraud and deception most commonly involved community supervision or work orders (84%), as opposed to other penalties (ABS 2011). In addition, 19 percent of defendants with a principal sentence involving monetary orders had been charged with principal federal offences involving fraud or deception (ABS 2011).