City of Botany Bay Council – allegations concerning former chief financial officer (Operation Ricco)

Year: 2017 Status: Completed

The ICAC investigated allegations that former City of Botany Bay Council chief financial officer Gary Goodman, and other Council employees, dishonestly exercised official functions to obtain financial benefits for themselves and others by causing fraudulent payments of more than $4.2 million to be made by the Council through false invoicing to either themselves, or various entities. The ICAC also investigated allegations that Mr Goodman solicited and received payments as an inducement or reward for showing favourable treatment to contractors. It was also alleged that Mr Goodman and other Council employees dishonestly exercised official functions to obtain financial benefits for themselves and others by using Council resources.

In its report on the investigation, made public on 26 July 2017, the Commission makes findings of serious corrupt conduct against Mr Goodman and former Council officers, Marny Baccam, Malcom Foo and Lorraine Cullinane. The Commission also makes findings of serious corrupt conduct against contractors Keith Mark, Aleksa Subeski, Zoran Gajic, Joe Freitas, Sam Alexander, Lyndal Marshall, Robert Floudas and Siddick Hussein.

The ICAC is of the opinion that the advice of the Director of Public Prosecutions should be obtained with respect to the prosecution of Mr Goodman, Mr Mark, Mr Subeski, Mr Gajic, Mr Alexander, Ms Baccam, Mr Foo, Mr Hussein, Suman Mishra and Ms Cullinane for various offences.

The Commission has made eight recommendations to the now Bayside Council to prevent the type of conduct exposed in this investigation from recurring. The ICAC also recommends that the NSW Government should consider adopting a model of local council oversight that is comparable to that applicable to state government agencies.

Findings of corrupt conduct

The ICAC found that Gary Goodman engaged in serious corrupt conduct by:

  • between 1997 and October 2015, dishonestly exercising his official functions as Council CFO by approving, or causing the payment by the Council of, invoices totalling over $5 million, which he knew to be either entirely false or for inflated amounts, and did so in each case to obtain money from the Council for his own benefit and the benefit of others. The invoices were from, or purported to be from:

       - Emu Alarms Pty Ltd ($300,073.64)

       - CND Computers Pty Ltd ($2,097,021.74)

       - On Q Installations ($34,540)

       - Truck Service Centre ($536,474.95)

       - Computer Intersection (amount not established)

       - Australian Landscape Creations ($55,495)

       - Jovane Pty Ltd ($1.85 million)

       - Green Thumb Landscaping & Gardening Pty Ltd ($132,682)

       - Highland Profiles Pty Ltd and Cube Design and Construction Pty Ltd (amounts not established)

       - Teletec (amount not established)

       - Elias & Son Smash Repairs (amount not established)
     
  • soliciting and receiving $2,000 from Zoran Gajic of Cube Design and Construction and Highland Profiles as an inducement or reward for Mr Goodman exercising his public official functions to favour, or not to show disfavour to, Mr Gajic’s businesses in relation to their work for the Council
     
  • between December 2003 and January 2012, wilfully and intentionally using the Council’s corporate credit cards issued in the name of Peter Fitzgerald, the Council’s then general manager, to incur personal expenditure of $620,091.77, knowing that he was not entitled to do so, and then authorising the payment by the Council of the credit card accounts relating to that expenditure.

The ICAC also found that the following persons engaged in serious corrupt conduct:

  • Keith Mark by, between 1997 and 2005, in agreement with Mr Goodman, creating false Computer Intersection invoices, which he submitted to the Council for payment knowing that either he had not done the work claimed or that the amounts claimed had been inflated, with the intention that Mr Goodman would use his position at the Council to dishonestly arrange for payment of the invoices to benefit Mr Goodman
     
  • Mr Mark by, between 16 September and 7 October 2015, in agreement with Mr Goodman, creating false Australian Landscape Creations invoices totalling $55,495, which he submitted to the Council for payment knowing that the work claimed had not been done, with the intention that Mr Goodman would use his position at the Council to dishonestly arrange for payment of the invoices to benefit Mr Mark
     
  • Aleksa Subeski by, between 20 November 2014 and 7 October 2015, in agreement with Mr Goodman, creating false Jovane and Green Thumb Landscaping and Gardening invoices totalling $1,982,000, which he submitted to the Council for payment knowing that the work for which payment was claimed, had not been done, with the intention that Mr Goodman would use his position at the Council to dishonestly arrange for payment of the invoices to benefit himself and Mr Subeski
     
  • Mr Gajic by, on or about 20 July 2015, paying $2,000 to Mr Goodman as an inducement or reward for Mr Goodman exercising his public official functions to favour, or not to show disfavour, to Mr Gajic’s businesses in relation to their work for the Council
     
  • Joe Freitas by, in agreement with Mr Goodman, submitting to the Council for payment false Elias & Son Smash Repairs invoices for work he knew had not been done, with the intention that Mr Goodman would use his position at the Council to dishonestly arrange for payment of the invoices to benefit himself and Mr Freitas
     
  • Sam Alexander by, in agreement with Mr Goodman, submitting to the Council for payment false Teletec invoices for work he knew had not been done, with the intention that Mr Goodman would use his position at the Council to dishonestly arrange for payment of the invoices in order to benefit Mr Goodman
     
  • Marny Baccam by, between around 2013 and October 2015, dishonestly exercising her public official functions as a Council clerical assistant to obtain money from the Council for her own benefit and the benefit of others, by arranging for the payment by the Council of invoices she knew to be false. The false invoices were from, or purported to be from, Ari Landscape Solutions ($245,751), Al-Furat Pty Ltd, and Gardens2NV
     
  • Malcolm Foo by, between around 2012 to 2013 and October 2015, dishonestly exercising his public official functions as Council officer by arranging for the payment by the Council of Gardens2NV invoices, which he knew to be false, in order to obtain the invoiced amounts for his own benefit and the benefit of the contractor Gardens2NV
     
  • Lyndal Marshall by, between 2013 and October 2015, in agreement with Ms Baccam and Mr Foo, creating and submitting to the Council for payment false Gardens2NV invoices totalling approximately between $200,000 and $220,000 for work she knew had not been done, knowing that Ms Baccam and Mr Foo would use their positions at the Council to dishonestly arrange payment of the invoices in order to obtain money from Council to recoup money paid to Ms Baccam or Mr Foo
     
  • Robert Floudas by, between 2013 and October 2015, being party to an agreement between Ms Marshall, Ms Baccam and Mr Foo whereby false Gardens2NV invoices, totalling approximately between $200,000 and $220,000, were submitted to the Council for payment for work that had not been done, knowing that Ms Baccam and Mr Foo would use their positions at the Council to dishonestly arrange payment of the invoices in order to obtain money from the Council to recoup money paid to Ms Baccam and Mr Foo
     
  • Siddik Hussein by collaborating with Ms Baccam to create false Al-Furat invoices to be paid by the Council for work he knew had not been done, knowing that Ms Baccam would use her position at the Council to dishonestly arrange for payment of the invoices
     
  • Lolrraine Cullinane for wilfully and dishonestly failing, in her duty as the Council’s deputy general manager, to cause the taking of disciplinary proceedings against Mr Goodman or to report his misconduct to the NSW Police Force.

Recommendations for prosecutions

The Commission must seek the advice of the Director of Public Prosecutions (DPP) on whether any prosecution should be commenced. The DPP determines whether any criminal charges can be laid, and conducts all prosecutions. The Commission provides information on this website in relation to the status of prosecution recommendations and outcomes as advised by the DPP. The progress of matters is generally within the hands of the DPP. Accordingly, the Commission does not directly notify persons affected of advice received from the DPP or the progress of their matters generally.

The Commission is of the opinion that consideration should be given to obtaining the advice of the DPP with respect to the prosecution of:

  • Gary Goodman for fraud pursuant to section 192E and section 178BB of the Crimes Act 1900 and soliciting and receiving a corrupt commission or reward pursuant to section 249B(1)(a) of the Crimes Act
     
  • Keith Mark for offences of fraud pursuant to section 192E of the Crimes Act
     
  • Aleksa Subeski for offences of fraud pursuant to section 192E of the Crimes Act
     
  • Zoran Gajic for offences of fraud pursuant to section 192E of the Crimes Act and an offence under section 249B(2)(a) of the Crimes Act of corruptly giving a benefit to Mr Goodman
     
  • Sam Alexander for an offence of fraud pursuant to section 192E of the Crimes Act and an offence of giving false or misleading evidence to the Commission contrary to section 87(1) of the Independent Commission Against Corruption Act 1988, when he denied involvement in false invoicing
     
  • Marny Baccam for offences of fraud pursuant to section 192E of the Crimes Act and an offence of giving false or misleading evidence to the Commission contrary to section 87(1) of the ICAC Act, when she denied submitting false invoices to the Council other than the false invoices submitted through Ari Landscape Solutions
     
  • Malcolm Foo for offences of fraud pursuant to section 192E of the Crimes Act, soliciting and receiving a corrupt commission or reward pursuant to section 249B(1)(a) of the Crimes Act, and an offence of giving false or misleading evidence to the Commission contrary to section 87(1) of the ICAC Act, when he denied involvement in or knowledge of false invoicing
     
  • Siddik Hussein for offences of fraud pursuant to section 192E of the Crimes Act
     
  • Suman Mishra for giving false evidence to the Commission contrary to section 87(1) of the ICAC Act, when she denied knowledge of Mr Goodman’s involvement in false invoicing
     
  • Lorraine Cullinane for an offence of misconduct in public office.

The Commission has been advised by Mr Goodman's legal representative that Mr Goodman died on 21 November 2017. In the light of his death, the Commission will not be seeking advice from the DPP in relation to him, but will seek the DPP's advice in relation to the other persons mentioned above.

Updates

Briefs of evidence were provided to the DPP on 16 March 2018 in relation to Samuel Alexander, Marny Baccam, Lorraine Cullinane, Malcolm Foo, Zoran Gajic, Siddiq Hussein, Keith Mark, Suman Mishra and Aleksa Subeski. The Commission is awaiting the DPP's decision on whether proceedings will be taken.

Recommendations for disciplinary action

Gary Goodman resigned from his position at the City of Botany Bay Council prior to disciplinary action being taken. The Commission, therefore, makes no recommendation in relation to the consideration of disciplinary or dismissal action.

Malcolm Foo’s employment at the Council was terminated prior to disciplinary action being taken. The Commission, therefore, makes no recommendation in relation to the consideration of disciplinary or dismissal action.

Marny Baccam resigned from her position at the Council prior to disciplinary action being taken. The Commission, therefore, makes no recommendation in relation to the consideration of disciplinary or dismissal action.

Given that Suman Mishra no longer works for the Council, the issue of whether consideration should be given to the taking of action against her for a disciplinary offence or the taking of action with a view to her dismissal, does not arise.

Given that Lorraine Cullinane no longer works for the Council, the issue of whether consideration should be given to the taking of action against her for a disciplinary offence or the taking of action with a view to her dismissal, does not arise.

Recommendations for corruption prevention

The Commission has made nine corruption prevention recommendations in this matter. Since the City of Botany Bay Council has now been amalgamated, recommendations relating to Council processes and governance arrangements are made to Bayside Council. Recommendations concerning the local council governance framework are made to the NSW Government.

Recommendation 1

That Bayside Council reviews its financial processes and makes any necessary changes to ensure that:

  • its vendor master file is subject to appropriate segregation and review-based controls
     
  • sufficient segregations exist in its invoice payment processes (including the introduction of a three-way match arrangement) to manage the risks associated with fraudulent payments
     
  • operational managers have visibility over, and involvement in, setting budgets and monitoring expenditure against these budgets
     
  • adequate segregations exist across different financial processes.

Recommendation 2

That Bayside Council undertakes a review of the control frameworks governing processes that are vulnerable to corruption (including those related to procurement, invoice payment, fleet management and charge-card usage) and implements any recommendations arising from the review.

Recommendation 3

That Bayside Council reviews the position descriptions of key operational and financial roles to ensure that they include the required skill sets and qualifications.

Recommendation 4

That Bayside Council ensures that the implementation of both internal and external audit recommendations is considered by the elected body when evaluating the performance of the general manager.

Recommendation 5

That Bayside Council undertakes a risk assessment (including an assessment of fraud and corruption risks) to inform its internal audit plan.

Recommendation 6

That Bayside Council ensures that its internal audit function operates independently from management by reporting functionally to its audit committee.

Recommendation 7

That Bayside Council ensures it has a robust system in place to monitor and report on the implementation of internal audit recommendations that is independent from management.

Recommendation 8

That the general manager of Bayside Council conducts a review of the audit committee’s effectiveness and the adequacy of its arrangements to ensure that it fulfils the responsibilities of its charter and provides sufficient assistance to Bayside Council’s governing body on governance processes.

Recommendation 9

That the NSW Government considers adopting a model of local council oversight that is comparable to that applicable to state government agencies. This model could include:

  • mandatory administration and governance directives similar to those that apply to state government agencies
     
  • requirements concerning the composition and operation of audit committees that are similar to those that apply to state government agencies
     
  • the requirement for council general managers to attest that audit committees are operating in accordance with requirements.

Response to ICAC recommendations

The action plan posted below has been provided by Bayside Council in response to the ICAC's corruption prevention recommendations. Its publication here is to show the status of the responses. It does not constitute approval or endorsement by the Commission.

12 month progress report - Bayside Council

Action plan - Bayside Council - Part A

Action plan - Bayside Council - Part B

Action plan - Office of Local Government

Media Releases

ICAC finds former City of Botany Bay Council CFO corrupt over $5.6 million in false invoices and credit card misuse

26 Jul 2017

The NSW Independent Commission Against Corruption (ICAC) has found that former City of Botany Bay Council chief financial officer (CFO) Gary Goodman engaged in serious corrupt conduct involving more than $5 million in false or inflated invoices and by incurring over $620,000 of personal expenditure on corporate credit cards issued in the name of the then general manager.

Public inquiry into allegations concerning former City of Botany Bay Council CFO resumes tomorrow

2 Jun 2016

The NSW Independent Commission Against Corruption (ICAC) Operation Ricco public inquiry into allegations concerning former City of Botany Bay Council chief financial officer, Gary Goodman, will resume tomorrow (Friday, 3 June 2016) at 12:30 pm.

MEDIA ALERT: ICAC public inquiry into allegations concerning former City of Botany Bay Council CFO starts Monday

26 Feb 2016

The NSW Independent Commission Against Corruption (ICAC) Operation Ricco public inquiry into allegations concerning former City of Botany Bay Council chief financial officer, Gary Goodman, will start next Monday (29 February 2016) at 10:00 am.

Public inquiry into corruption allegations concerning former City of Botany Bay Council chief financial officer

16 Feb 2016

The NSW Independent Commission Against Corruption (ICAC) will hold a public inquiry commencing on Monday 29 February 2016 as part of an investigation it is conducting into allegations concerning former City of Botany Bay Council chief financial officer, Gary Goodman (Operation Ricco).

Witness Transcripts

View all transcripts associated with this investigation. The Commission makes every effort to post the daily transcripts of its public inquiries on its website by 8:00 pm each day when possible. If the Commission sits later than 4:00 pm, the daily transcripts, particularly the afternoon session, may not be available until the next working day.

Filename File Size KB Date pp. Time
15-03-2016 Operation RICCO transcript pp. 01062-01127 from 1.50pm to 4.17pm.pdf 228 15/03/16 01062-01127 1.50pm to 4.17pm
07-06-2016 Operation RICCO transcript pp. 01628-01664 from 2.15pm to 3.37pm.pdf 134 07/06/16 01628-01664 2.15pm to 3.37pm
29-02-2016 Operation RICCO transcript pp 00001-00056 from 10 15am to 12 31pm.pdf 204 29/02/16 00001-00056 10 15am to 12 31pm
29-02-2016 Operation RICCO transcript pp 00057-00124 from 1 35pm to 4 02pm_Redacted.pdf 241 29/02/16 00057-00124 1 35pm to 4 02pm
01-03-2016 Operation RICCO transcript pp. 00125-00193 from 10.05am to 12.42pm.pdf 228 01/03/16 00125-00193 10.05am to 12.42pm
01-03-2016 Operation RICCO transcript pp. 00194-00242 from 1.50pm to 3.26pm.pdf 156 01/03/16 00194-00242 1.50pm to 3.26pm
02-03-2016 Operation RICCO transcript pp. 00243-00325 from 10.05am to 12.59pm_Redacted.pdf 274 02/03/16 00243-00325 10.05am to 12.59pm
02-03-2016 Operation RICCO transcript pp. 00326-00385 from 2.05pm to 4.02pm_Redacted.pdf 201 02/03/16 00326-00385 2.05pm to 4.02pm
03-03-2016 Operation RICCO transcript pp. 00386-00471 from 10.05am to 1.02pm.pdf 279 03/03/16 00386-00471 10.05am to 1.02pm
03-03-2016 Operation RICCO transcript pp. 00472-00505 from 2.05pm to 3.18pm.pdf 114 03/03/16 00472-00505 2.05pm to 3.18pm
04-03-2016 Operation RICCO transcript pp. 00506-00576 from 10.10am to 12.32pm_Redacted.pdf 257 04/03/16 00506-00576 10.10am to 12.32pm
04-03-2016 Operation RICCO transcript pp. 00577-00615 from 1.40pm to 2.57pm.pdf 121 04/03/16 00577-00615 1.40pm to 2.57pm
07-03-2016 Operation RICCO transcript pp. 00616-00695 from 10.25am to 1.02pm_Redacted.pdf 310 07/03/16 00616-00695 10.25am to 1.02pm
07-03-2016 Operation RICCO transcript pp. 00696-00725 from 2.17pm to 3.18pm.pdf 97 07/03/16 00696-00725 2.17pm to 3.18pm
08-03-2016 Operation RICCO transcript pp. 00726-00795 from 10.10am to 12.53pm.pdf 236 08/03/16 00726-00795 10.10am to 12.53pm
08-03-2016 Operation RICCO transcript pp. 00796-00826 from 1.50pm to 3.10pm.pdf 107 08/03/16 00796-00826 1.50pm to 3.10pm
11-03-2016 Operation RICCO transcript pp. 00827-00846 from 10.10am to 10.46am.pdf 73 11/03/16 00827-00846 10.10am to 10.46am
11-03-2016 Operation RICCO transcript pp. 00847-00865 from 4.58pm to 5.34pm.pdf 68 11/03/16 00847-00865 4.58pm to 5.34pm
14-03-2016 Operation RICCO transcript pp. 00866-00934 from 9.05am to 12.38pm.pdf 236 14/03/16 00866-00934 9.05am to 12.38pm
14-03-2016 Operation RICCO transcript pp. 00935-01005 from 1.25pm to 3.51pm_Redacted.pdf 298 14/03/16 00935-01005 1.25pm to 3.51pm
15-03-2016 Operation RICCO transcript pp. 01006-01061 from 10.25am to 12.52pm_Redacted.pdf 224 15/03/16 01006-01061 10.25am to 12.52pm
16-03-2016 Operation RICCO transcript pp. 01128-01202 from 9.40am to 1.07pm.pdf 268 16/03/16 01128-01202 9.40am to 1.07pm
16-03-2016 Operation RICCO transcript pp. 01203-01282 from 2.00pm to 5.02pm_Redacted.pdf 278 16/03/16 01203-01282 2.00pm to 5.02pm
17-03-2016 Operation RICCO transcript pp. 01283-01366 from 9.10am to 1.00pm_Redacted.pdf 299 17/03/16 01283-01366 9.10am to 1.00pm
17-03-2016 Operation RICCO transcript pp. 01367-01406 from 2.05pm to 3.42pm_Redacted.pdf 145 17/03/16 01367-01406 2.05pm to 3.42pm
03-06-2016 Operation RICCO transcript pp. 01407-01427 from 12.35pm to 1.27pm.pdf 81 03/06/16 01407-01427 12.35pm to 1.27pm
03-06-2016 Operation RICCO transcript pp. 01428-01481 from 2.20pm to 4.39pm.pdf 194 03/06/16 01428-01481 2.20pm to 4.39pm
06-06-2016 Operation RICCO transcript pp. 01482-01528 from 10.30am to 12.56pm.pdf 172 06/06/16 01482-01528 10.30am to 12.56pm
06-06-2016 Operation RICCO transcript pp. 01529-01563 from 2.05pm to 3.41pm.pdf 165 06/06/16 01529-01563 2.05pm to 3.41pm
07-06-2016 Operation RICCO transcript pp. 01564-01627 from 10.10am to 1.01pm.pdf 247 07/06/16 01564-01627 10.10am to 1.01pm
08-06-2016 Operation RICCO transcript pp. 01665-01721 from 10.20am to 1.00pm.pdf 232 08/06/16 01665-01721 10.20am to 1.00pm
08-06-2016 Operation RICCO transcript pp. 01722-01781 from 2.15pm to 4.19pm.pdf 234 08/06/16 01722-01781 2.15pm to 4.19pm
Exhibits

Ricco Exhibit List (PDF)

Download exhibits associated with this investigation below.

Public notices