The Australian Federal Police has won the right to seize and keep assets that it says are proceeds of crime
Mid-last year the Australian Federal Police (AFP) sought orders against Pharmacy Depot Hurstville, as well as pharmacists Yaakop (Jacob) Youssef and Hamza Amin Zoghbi, who are the shareholders and directors of the pharmacy.
The orders arose out of an investigation involving suspected fraudulent Pharmaceutical Benefit Scheme (PBS) claims made by Pharmacy Depot in respect of a specialised formula for children and adults, a product manufactured by Vitaflo Australia.
Between 30 November 2013 and 12 March 2015, Pharmacy Depot allegedly made 4,743 PBS claims for 17 different Vitaflo products.
Department of Health records show that Pharmacy Depot was identified as the top distributor in Australia for nine of the products. As a result of the claims, $18,660,260 was paid to the Pharmacy Depot account nominated for PBS payments.
The AFP sought the orders based on the suspicion that the defendants, Mr Youssef and Mr Zoghbi, had committed offences including obtaining financial advantage from the Commonwealth by deception; and/or dealing with money with a value in excess of $100,000 and which is reasonably suspected of being the proceeds of crime.
While the Supreme Court of NSW has found that there are reasonable grounds to suspect that the defendants have committed serious offences, Mr Youssef and Mr Zoghbi have not yet been found guilty of any crime.
However in December 2015 the AFP obtained a custody and control order against the Pharmacy Depot property.
A provisional liquidator was appointed to Pharmacy Depot in December last year, and in May 2018 the business was wound up.
In the same month, the AFP requested leave to continue the proceedings against the Pharmacy Depot business.
The AFP more recently sought original restraining orders made in respect of property to include an amount of $50,000, which remains in the bank account of the pharmacy business.
There was also a reference to four Toyota motor vehicles and an amount of $7,919.83 with interest earned, which were the proceeds of a sale of another Toyota motor vehicle, such proceeds being in the custody of Toyota Finance Australia.
This July the liquidators filed a notice of motion seeking that all of the Pharmacy Depot property be transferred to their possession.
In response the Supreme Court of New South Wales has had to determine between the right of the liquidators to deal with the company property for the benefit of the company’s creditors, and the right of the AFP to restrain and seize the property by reason of the crimes alleged to have been committed.
Alternatively the liquidators requested that the additional $50,000 be used to meet the payment of debts incurred by the liquidators.
They further requested that another sum of $750,000 held in a related account be transferred to the liquidators to satisfy their statutory indemnity regarding the costs and disbursements of the liquidation of the pharmacy business.
However the Supreme Court of NSW decided that the matter should proceed to a final hearing rather than be dealt with as a separate question, meaning the AFP continues to hold the property under restraining orders.
“I do not consider that there would be a saving in time or expense,” found Justice David Davies.
“I do not consider that, even if the separate question was determined favourably to the liquidators, that would minimise to any appreciable extent the further involvement of the liquidators in the proceedings, as they submitted it would.”
Justice Davies dismissed the liquidators’ notion of motion and ordered them to pay the AFP’s costs.
The case continues.