John Mugambi Mwamba Palm Island trial day six: ‘Things were not being done above board’

Employee interviews in Hungry Jacks, thieves breaking through walls with sledgehammers and ‘silent partners’. The John Mugambi Mwamba case continues.

John Mugambi Mwamba (right) as supported by Defence lawyer Mathai Joshi in his appearance at the Townsville Magistrates Court on Tuesday. Photo: Leighton Smith

A slew of witnesses have taken to the stand in day six of an highly anticipated fraud and misconduct trial against former Palm Island Aboriginal Shire Council deputy CEO John Mugambi Mwamba.

Mugambi is accused of misconduct in public office which includes deliberately hiding his involvement in a Palm Island petrol station - alongside two fraud as an employee charges.

Mugambi has pleaded not guilty to the charges.

Defence barrister Darin Honchin said his client was employed as a financial adviser for the petrol station and argued there was no rule against second jobs for council workers.

Prosecutor Andrew Walklate argued it was the Crown case that Mugambi was an active owner of the business and was deliberately hiding his involvement.

One former employee - Scott Fleming - described in his evidence before the court that his time on Palm Island was “stressful, and I didn’t enjoy it at all.”

John Mugambi Mwamba (right) as supported by Defence lawyer Mathai Joshi in his appearance at the Townsville Magistrates Court on Tuesday. Photo: Leighton Smith

The jury heard Mr Fleming was approached about the manager job in 2017 and was interviewed for the job at Hungry Jacks Aitkenvale.

Mr Fleming said he worked one week on, one week off and would live in a room behind the service station.

“I didn’t enjoy it because of the crime,” Mr Fleming said.

“On my last night there some of the locals decided to break in with a sledgehammer through the walls because they couldn’t get through the door.”

Mr Fleming said inside the petrol station - known as Sibley Seaside Service Station or ‘Palm Island Servo’ - he would stock groceries, cigarettes and there was an ATM that operated as a “sub-business”.

Every night he would record all sales made and email this inventory to a group of men which he said included Mugambi.

“John (Mugambi) was mentioned as a silent owner, but it wasn’t discussed,” Mr Fleming told the court.

“He was just one of these people who got the report at the end of the day.”

Jeremy Williams, who also gave evidence before the court, worked at the petrol station in 2016 - he was also interviewed at Hungry Jacks Aitkenvale.

The court heard that at the time there were two main managers at the servo, Daryl Nickson and a Kenyan man who was close with Mugambi called Duncan Arimi.

“I was told John (Mugambi) was a silent partner,” Mr Williams said in court.

“I was told to tell people that Daryl (Nickson) owned the service station because the local people didn’t like people of African descent.”

Mr Williams said he started to grow suspicious when he searched the business on ASIC and Mugambi’s name wasn’t listed.

“This made me concerned things were not being done above board,” Mr Williams said.

He then searched Mugambi’s name on the computer in the service station and found an “email trial” where fuel prices were being discussed and Mugambi was being asked to approve the prices, the court heard.

The service station was the only source of fuel on the island.

The court also heard from another witness, Stephen Nicholson, who started as an employee at the service station before buying shares at $3000 each and becoming a 15 per cent co-owner.

He was regularly involved with employee meetings which he said Mugambi also attended.

“I asked why John was there. Daryl said he was a financial adviser, Duncan would just change the subject,” Mr Nicholson said.

Mr Nicholson said as the years went on, he started uncovering evidence of $640 a fortnight being paid to Mugambi and debts that had been hidden within the business - including a large $80,000 credit card debt in Mugambi’s and Mr Arimi names.

“In the bank statements I would find payments to John (Mugambi). John 1, John 2, John 3 … it was probably in 2019 when I found the receipts,” Mr Nicholson said.

In December 2020 the co-owners - Mr Arimi, Mr Nickson and Mr Nicholson - had a crisis meeting where Mr Nickson and Mr Nicholson demanded the money to Mugambi stop, but Mr Arimi objected and would keep moving the money out, either by paying it to himself, Mugambi’s brother-in-law or to Mugambi’s wife, Mr Nicholson said.

Mr Nicholson said he realised the amount Mugambi was being paid lined up with him being a shareholder.

“I asked, does he own half the business on the quiet? And he (Daryl) said ‘yeah’” Mr Nicholson said.

The court also heard that eventually Mugambi was finally cut-off from the Sibley Seaside Service Station in 2020 after he was charged by detectives from the Crime and Corruption Commission.

Mr Arimi has since moved back to Kenya, and has not been heard from since.

Originally published as John Mugambi Mwamba Palm Island trial day six: ‘Things were not being done above board’