A pharmacy embroiled in an ongoing PBS fraud case has unsuccessfully tried to pay its liquidators using funds confiscated by the Australian Federal Police
Pharmacy Depot Hurstville has had a motion to allow debts incurred by its liquidators to be met out of funds restrained by the Australian Federal Police (AFP) rejected.
The pharmacy and its two directors are currently involved in a Federal criminal case for allegedly perpetrating fraud by obtaining in excess of $18 million in fraudulent PBS claims.
Restraining orders were made on the basis that the pharmacy directors, through Pharmacy Depot, were reasonably suspected of having committed the offences of obtaining a financial advantage from the Commonwealth by deception, and dealing with money with a value in excess of $100,000 and which is reasonably suspected of being proceeds of a crime.
Funds obtained from the Commonwealth under the alleged fraud were deposited into the restrained bank account.
Property restrained in April 2015 included funds in the amount of over $9.6 million.
However as of June 2019, Pharmacy Depot held cash not subject to any restraining order in the sum of approximately $265,000 – an insufficient amount to cover liquidation costs.
Pharmacy Depot sought for either $524,644 or $750,000 to be freed up from the restrained bank account to pay for in unpaid debts towards its liquidation. It contended that a liquidator’s remuneration constituted a company expense.
However Senior Counsel for the Commissioner of the AFP submitted that “to enable fraudsters or money launderers, who perpetrate their offending through a captive company vehicle, to circumvent confiscation of the proceeds and instruments of their crimes by using the apparatus of voluntary liquidation years after assets are restrained would not be consistent with the requirement that an allowance only be made for debts incurred by the company in good faith”.
The presiding judge agreed that to incur a debt in the expectation that the debt will be met out of the restrained property is not to incur the expense “in good faith”.
Pharmacy Depot’s motion was dismissed, and it was ordered to pay costs to the AFP Commissioner.