NSW Government bushfire, COVID grants auditors brought in to catch fraudsters to be shut down

It may have caught fraudulent acts worth tens of millions of dollars, but an audit committee set up to track the State Government grant scheme has been shut down.

Residents defending a property from a bushfire at Hillsville near Taree. Picture: Peter PARKS / AFP

An audit into two NSW Government grants schemes, which has already identified tens of millions of dollars of taxpayers’ money being wrongly paid out to con artists and organised crime gangs, is being shut down before the full extent of the fraud can be measured.

Service NSW employed a private firm earlier this year to conduct an audit into the troubled bushfire and COVID-19 small business support grants when it emerged they had been targeted by thousands of fraudulent claims totalling more than $20 million.

A firefighter keeps an eye on a controlled backburn as a bushfire burns through Richmond Vale near Cessnock in the Hunter Valley. Picture: Darren Pateman

The audit prompted at least two major police strike forces to catch the fraudsters, who had pretended to have been victims of last summer’s bushfires and the coronavirus pandemic to claim up to $10,000 a time.

It allegedly found some individuals had successfully claimed multiple grants, including one Lake Macquarie address where more than $1 million was claimed, and the easy nature of the fraud had attracted organised crime groups.

But as the audit continued to identify new frauds among the $750 million grants program – and the size of the frauds were reported by The Newcastle News last month – the private firm was told their investigation was being cut short.

Both Service NSW and NSW Customer Service Minister Victor Dominello have refused to answer repeated questions about the audit and why it was being stopped without the full extent of the fraud being known.

Minister for Customer Service Victor Dominello was contacted for comment. Picture: NCA NewsWire/Flavio Brancaleone

Instead, Mr Dominello’s spokesman said he could not comment because of current criminal investigations other than to say the “Department of Customer Service has established an investigations function and is continuously working to strength its fraud detection and prevention systems’’.

NSW Labor leader Jodi McKay speaking to the press at the NSW Parliament House in Sydney. Picture: NCA NewsWire / Christian Gilles

Both the NSW Ombudsman and Audit NSW have confirmed they would conduct their own independent investigations into the grants fraud.

Opposition leader Jodi McKay said: “This is a Government that has given up on integrity and continues to accept grant rorting across all facets of funding programs.”

Opposition spokeswoman for better public services Sophie Cotsis also attacked Mr Dominello’s handling of the crisis.

“The Berejiklian Government needs to immediately get to the bottom of this fraudulent crime, stop these heartless criminals and support the investigators to do their job, not hinder them,’’ Ms Cotsis said.

“Millions of taxpayers’ dollars have gone to criminals rather than supporting the victims of bushfires and the COVID -19 pandemic.

“Minister Dominello cannot stop the public from knowing the truth about how far this fraud goes throughout the state.

“Cutting the contract with the investigators short raises questions about just how big this issue really is.

“The Minister must take action and beef-up the powers of the investigators and throw the book at those heartless criminals scamming the system at a time when families and businesses have experienced devastation and horror beyond words.’’