Five years ago, John Joseph Carter, former chief executive of billion-dollar fleet management company ORIX, and his fellow executive George Georgiou were elated when their criminal trial for offering bribes collapsed due to a technicality.
At the time, Coca-Cola Amatil’s fleet manager Bryan Pereira was serving a minimum of four years in jail after pleading guilty to accepting corrupt payments totalling $504,900 in return for giving ORIX lucrative leasing contracts.
Former ORIX boss John Carter leaving court in September 2019 after corruption charges were dropped. Credit: Dean Sewell
Having avoided the prospect of jail, Carter, 62, sued insurance company Chubb for $4.5 million in legal costs for his criminal case and a subsequent civil case against ORIX, which he lost.
In a stunning ruling, Federal Court Justice John Halley has found that Carter was well aware of the payment of bribes and other illegal inducements, including paying for sex workers for Pereira.
At the time of the trio’s arrest in 2015, police had alleged that Georgiou had made corrupt payments to Pereira and that Carter was not only aware of the payments but that he had instructed Georgiou on how to make them.
In September 2019, one week into the ORIX executives’ estimated 13-week criminal trial, the matter was dropped when, among other things, the police conceded they had not disclosed the existence of a registered informant.
Bryan Pereira, who was arrested in 2015, was jailed for a maximum of four years. Credit: Nathan Patterson
Carter sued Chubb Insurance, claiming he was indemnified under a directors and officers liability policy.
Chubb had initially advanced Carter more than $650,000 to defend the criminal proceedings. However, after reviewing the police material in 2017, two years before the trial, Chubb demanded Carter repay the money on the basis that he had signed the insurance policy while knowing that bribery and corruption had occurred.
The Federal Court recently concurred. “On no plausible view was Mr Carter a peripheral observer who did not have any real or substantive appreciation of the payment of bribes and provision of illegal inducements to Mr Pereira,” the judge said last month.
“Mr Carter’s various denials of his knowledge of the payment of bribes and provision of illegal inducements are implausible given the extent of his involvement in the impugned transactions as demonstrated by the contemporaneous documents and the inherent logic of events.”
An email exchange revealed Carter was aware ORIX was picking up Pereira’s tab for expensive gifts and sex workers. In January 2015, Georgiou emailed Carter about Pereira’s purchases.
“Shit loads of gifts! Including a 2600 breitling watch… Plus the 7k cash I had to get out yesterday to pay for his roots!!! But he is good value for us bro!” Georgiou told Carter in the email.
Carter also approved two of Pereira’s invoices for $300,000 having been informed that Pereira was collecting $500 for every vehicle Coca-Cola leased from ORIX.
“Given my findings that Mr Carter engaged in and was aware of fraud at the time he signed the Proposal, Chubb is entitled to deny Mr Carter indemnity under the policy,” the judge said.
Carter has been ordered to pay costs plus Chubb’s initial advance, which is now $723,000.
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