Thousands of people have had their COVID business grants halted as police consider laying fraud charges against small business owners.
Over $20 million of the payments have been identified as potentially fraudulent, leading Service NSW to request police assistance.
The cessation of payments has led to outcry from small business owners, still reeling from the lockdown.
Fraudulent COVID Business Grants
Service NSW called in Police after identifying potentially fraudulent COVID-19 business grant claims.
Small businesses, sole traders and not-for-profit companies whose revenue fell by 30 per cent or more during the lockdown qualified for a $1,500 fortnightly payment under the grant.
But Service NSW last month put the scheme on hold after more than $20 million of the payments were suspected of being falsified.
"We were forced to pause the 2021 COVID-19 micro-business grant payments temporarily while the anomalies in some applications were investigated," chief executive of Service NSW Damon Rees said.
The government uncovered $15.9 million in fraudulent applications. This is 2.6 per cent of all applications. Further, they stopped the payment of another $4.6 million in grants.
This led to the establishment of a joint strike force between NSW Police and Service NSW. All applications are being analysed. Those that are found to be dishonest will likely result in fraud charges being laid.
"State Crime Command will be using a state-of-the-art artificial intelligence system designed to mass analyse and cross-reference metadata," Assistant Commissioner Stuart Smith of NSW Police said.
"Let this be a warning to anyone who made a fraudulent application. It will not be long before we are knocking on your door."
Innocent Small Business Owners Affected
However, the pausing of COVID business grant payments affected innocent small business owners as well.
Service NSW were forced to apologise for halting the grant payments of many genuine claimants.
Applicants were forced to wait over five weeks between payments, with some business owners told unable to sustain themselves.
Significantly, many of these people were not told their payments would be delayed.
Recurring payments for existing applicants have now resumed. Service NSW said the majority of eligible claimants were expected to receive their payments in the coming weeks.
Fraud falls under the charge of 'Obtaining financial advantage or property by deception' pursuant to Section 192E of the Crimes Act 1900 (NSW).
The definition of fraud is acting dishonestly to cause a financial advantage or disadvantage.
In order for you to be found guilty of dishonestly obtain financial advantage by deception charges, the prosecution must prove beyond reasonable doubt that:
1. You received property or a financial advantage, OR
2. You caused a financial loss, AND
3. The gain or loss was caused by your actions, AND
4. Those actions were dishonest. Dishonesty is to be assessed according to standards of ordinary people and requires you to know your actions to be dishonest according to those standards. If an Accused's dishonest actions were not the main cause of the gain or loss then the charge will be dismissed.
If you have been accused fraud, it is important to obtain advice from a leading fraud lawyer early on. Call Astor Legal on (02) 7804 2823. Or, you can email email@example.com. You can also read some recent cases where fraud charges have been dismissed by clicking here.
The maximum penalty for 'dishonestly obtain financial advantage or property by deception' is 10 years imprisonment when heard in the District Court.
Looking at statistics since 2018, 32% of persons found guilty of this offence were sentenced to some kind of imprisonment. 16% of persons were sentenced to full-time imprisonment. Only 10% of person received no conviction for fraud.
Jail is a real possibility and avoiding a conviction is not easy. Fraud is taken extremely seriously by the Courts. Having the right lawyer makes all the difference in the ultimate penalty you will receive.