Palm Island footed the bill for deputy CEO John Mugambi Mwamba’s personal shopping, court hears

The trial against a former UNESCO officer accused of misconduct and fraud while working for a remote NQ Aboriginal community continues in court.

John Mugambi Mwamba walks into Townsville Magistrates Court facing fraud charges as the deputy chief executive officer and director of financial services for Palm Island Aboriginal Shire Council. Photo: Jacob Miley

Relaxed rules around the use of corporate credit cards at Palm Island Aboriginal Shire Council have been put under the microscope in the high-profile John Mugambi Mwamba trial.

Mugambi, 55, worked for Palm Island Aboriginal Shire Council from 2006 to 2019 as the director of finance and deputy CEO.

During that time he was paid a base annual salary of $100,000 to $150,000.

Crown prosecutor Andrew Walklate is accusing the former deputy CEO of using his corporate credit card for extensive personal shopping - which includes clothes from Witchery, parking passes for Mugambi’s Lexus and his wife’s Range Rover and JCU student payments for Mugambi’s doctorate degree.

Mr Mugambi’s resume was presented in court to show how well qualified he was, with a masters degree in business administration, previous experience as a UNESCO finance officer in Kenya, and former employment as a Thuringowa City Council senior accountant.

John Mugambi Mwamba, the deputy chief executive officer and director of financial services for Palm Island Aboriginal Shire Council is accused of fraud.

As part of his job on Palm Island, Mr Mugambi was in charge of ensuring all corporate credit cards were being appropriately used by council staff.

The court heard in 2016 Palm Island mayor Alf Lacey, who is not accused of any wrongdoing, was warned directly by an auditor that the council had “no credit card policy” and this was a “significant risk area”.

Defence barrister Darin Honchin argued the council never officially adopted any credit card policy.

This matched what Mr Mugambi initially told CCC investigators in his interview that there was no code of conduct he was required to follow.

Mr Honchin outlined several grey-areas - including the fact Mr Mugambi was using his own personal car to conduct council work, and that his wife was also a council employee.

Evidence collected by Crime and Corruption Commission (CCC) investigators shows Mr Mugambi used his corporate credit card for alleged personal expenses on several occasions - and he always collected a receipt to give to council, where they’d accept it as a business expense.

These expenses include: buying iphones for his children, a Nokia phone for his friend Duncan Arimi, paying for speeding fines, multiple express AusPost parcels to Kenya, a gaming laptop for his son, and more.

Mr Mugambi’s wife and family are not accused of any wrongdoing.

An intercepted phone conversation between Mr Mugambi and his university-aged son was played in court, where the son asked his father for an “early birthday present”.

Mr Mugambi laughs in the recording and says: “that’s interesting, what do you want?”

The son says his laptop is broken and he needs a new one, and asked if Mr Mugambi could “just put the money in my account”.

But Mr Mugambi insisted they go to Joyce Mayne together so he could purchase the laptop “on the credit card” and get a receipt.

This shopping trip ended up on the Palm Island corporate credit card for a total of $2939 and the expense was covered by the Palm Island taxpayers.

Mr Mugambi has pleaded not guilty to one charge of fraud as an employee.

The alleged credit card fraud is the most serious charge he is facing in the trial - Mr Mugambi has also pleaded not guilty to misconduct in public office and fraud as an employee.

Originally published as Palm Island footed the bill for deputy CEO John Mugambi Mwamba’s personal shopping, court hears