‘What about my money, John?’: Mugambi Mwamba’s shock last-minute guilty plea in Palm Island fraud trial

In a shocking twist, John Mugambi Mwamba has pleaded guilty to all four charges levelled against him in the Palm Island fraud and misconduct trial.

John Mugambi Mwamba walks out of the Townsville courthouse with his lawyer Photo: Jacob Miley

In a shocking last-minute twist, John Mugambi Mwamba has pleaded guilty to all four charges levelled against him.

For eleven years Mugambi was the second-in-charge on Palm Island, with full control of council’s purse strings and the ability to make problems disappear as the deputy CEO of Palm Island Aboriginal Shire Council, the jury heard.

On Wednesday, May 29, Mugambi took to the stand in his own trial, adamantly defending himself against allegations he took a $40,000 bribe from a business owner, misused a corporate credit card, committed fraud and acted as a secret director of the Palm Island Servo.

“I did so much for that council. I did 11 years. I improved their economics,” Mugambi said when confronted on the stand.

On Thursday, the 55-year-old solemnly pleaded guilty to all four charges brought against him by the Crime and Corruption Commission: misconduct in public office, two counts of fraud as an employee, and receiving a secret commission.

He is due to be sentenced before Judge John Coker on June 7.

Mugambi’s defence barrister Darin Honchin argued his client was not a flight risk due to the fact he had a three-year-old and five-year-old child and a wife to make “financial arrangements” for.

Mugambi’s passport had also been confiscated.

But Judge Coker denied Mugambi bail, saying there was “every possibility of a period of imprisonment”.

Mugambi maintained a serious expression when he was escorted by guards from the courtroom, pausing to take out his phone and undo his golden watch and handing them to his wife.

They hugged silently, then he walked with the guards through the security door.

John Mugambi Mwamba. Photo: Leighton Smith

Week four of the trial had focused on the alleged $40,000 bribe or ‘secret commission’ Mugambi took from the former owner of the Coolgaree Sports Bar and Bistro Shane Stratton in 2015.

According to the prosecution, the majority of this bribe was paid in cash, or as payments to James Cook University where it’s claimed Mr Stratton would pay for Mugambi’s wife’s university fees directly.

Mugambi’s wife isn’t accused of any wrongdoings.

Crown prosecutor Andrew Walklate used transcripts from intercepted phone conversations as proof there was money being exchanged between the men.

The jury heard one intercepted telephone call between the men.

SS: “What about my money, John?”

JM: “Which money?”

SS: “The money I gave you for the sale?’

JM: “Later, we will talk.”

Palm Island. Coolgaree Bay Sports Bar and Bistro. Owner Shane Stratton (2014). Pic Mark Calleja

On Thursday, Mugambi said the money exchanged between himself and Stratton was legitimate: either personal loans, or payments for freelance finance work Mugambi had done “prior to the sale”.

“I was looking into his books since the year 2010, helping with tax returns,” Mugambi said.

Prosecutor Andrew Walklate said it was clear Mugambi didn’t want to speak about the commission over the phone and accused him of lying.

“All your evidence before this trial is a total fantasy,” Mr Walklate said.

“That is not correct,” Mugambi said.

Mr Walklate accused the Kenyan national of taking advantage of the “culture at council”.

Mr Mugambi denied this.

A witness, Lilibeth Myles, told the court how she’d transported $10,000 in cash in her handbag for Stratton, carrying it on the plane into Townsville and into Mr Mugambi’s house.

Ms Myles told the court she was certain the $10,000 was the last instalment of a $40,000 ‘commission’ between the men.

Ms Myles said Stratton wanted to sell the business “quickly” because he was being “threatened”.

“Shane was very distressed,” Ms Myles said.

“Shane told me Mr Mugambi is going to help us sell the pub.”

The potential buyer lined up by Mr Mugambi was his own workplace, the Palm Island Aboriginal Shire Council.

On the witness stand, then-council CEO Ross Norman told the court he wasn’t aware the sports bar was selling until Mr Mugambi approached him about it.

“He suggested it was probably a good idea as a source of additional income for council,” Mr Norman said.

But Mr Norman had concerns about the legalities of an Aboriginal Shire Council profiting from liquor sales and insisted on a due diligence check which he “left it with him (Mugambi) to organise” as the director of finance and deputy CEO.

Afterwards, a disagreement occurred over the yet-to-happen due diligence check.

“John wanted to do it in-house initially and I said it should be done at arm’s length (by a third-party),” Mr Norman said.

It was only after Preston Law “strongly recommended” a third-party accountancy firm that one was finally engaged, and the accountants subsequently advised the bistro purchase involved “significant risks”.

When the sale fell through, Stratton allegedly started coming after John for the $40,000 bribe, the jury heard.

Emails exchanged between the pair proved that Mr Mugambi had started paying back money to Mr Stratton at $200 a week; the defence initially argued this is proof the money was simply a personal loan.

Mugambi is set to be sentenced before Judge Coker on Friday, June 7.

Originally published as ‘What about my money, John?’: Mugambi Mwamba’s shock last-minute guilty plea in Palm Island fraud trial