ClubsNSW whistleblower forced to sell home in court battle
A former ClubsNSW anti-money laundering compliance auditor who exposed lax compliance in New South Wales poker machine venues has lost a preliminary court fight to keep his communications with a federal MP confidential.
The Age reports that Troy Stolz gave Independent MP Andrew Wilkie an internal ClubsNSW report from May 2019, which revealed that up to 95 per cent of registered clubs in New South Wales were not compliant with federal anti-money laundering and counter-terrorism financing laws.
The Australian Federal Police have previously warned that poker machines are useful to launder money for the black market.
Proceeds from pokies gambling can, at any stage, be turned into an electronic funds transfer or a cheque for a bank account, which doesn’t need to be reported to the tax department.
Mr Wilkie told Parliament in 2020L “The clubs are required by law to report to AUSTRAC any suspected money-laundering or the funding of terrorism.”
In a decision that sparked fresh calls for greater whistleblower protections, Federal Court Justice David Yates ordered Mr Stolz to pay ClubsNSW’s costs after the court ruled the bulk of communications with Mr Wilkie would need to be handed over.
Mr Stolz no longer works at ClubsNSW and is suing them for wrongful dismissal.
ClubsNSW brought a separate case against Mr Stolz for breaching the confidentiality terms of his employment contract.
Justice Yates granted the preliminary application for access to the communications in the confidentiality case and also took the unusual step of granting ClubsNSW permission to use the communications against Mr Stolz in the wrongful dismissal case.
The whistleblower protections were not raised in the hearing for that application.
Stolz forced to sell home as whistleblower protections offer little comfort
Since the ruling, Mr Stolz has received two letters from law firm Thomson Geer, acting for ClubsNSW, threatening legal action.
One sent on June 3 says ClubsNSW will take him back to court if he doesn’t pay a $150,000 deposit for the costs awarded against him after he listed his house in Woogarrah, on the NSW Central Coast, to fund the legal battles.
A subsequent letter sent on June 11 threatens to invoke the court’s power to force journalists Nick O’Malley from the Sydney Morning Herald and Steve Cannane from ABC to hand over their communications with Mr Stolz after publishing reports that NSW pokie venues were breaking money laundering and terrorism finance laws.
“I’ve got to tell my kids, and my 19-year-old son with autism, that we’ve got to sell the house to keep fighting this,” Mr Stolz said.
“They want to use the court system to run me out of money. They’re using ClubsNSW money against me, which is meant to be for the betterment of the industry.
“I never thought I’d have to sell my house for reporting criminal activity in clubs. I feel like I’m on my own.”
A ClubsNSW spokeswoman said that they intend to enforce the cost order against Mr Stolz.
“Mr Stolz has claimed that he is entitled to whistleblower protections in these proceedings. However, in CLubsNSW’s view, he has not made any whistleblowing disclosures under the law.”
Under 2019 reforms, laws to protect whistleblowers were expanded to cover a larger group of staff from the corporate sector and workers were also given more protection.
The reforms included changes to guard whistleblowers’ confidentiality and to prevent them from being threatened for their actions.
Commonwealth Bank whistleblower Jeff Morris expressed concern about the erosion of protections in Mr Stolz’s case and the significant financial burden he is now required to carry to defend the fallout from his disclosures.
“The corporations don’t care if the litigation goes anywhere, they’re exhausting your resources and can tie you up in court for years. Eventually, your morale has to crack,” he said.
“This is the reality of the whistleblower reforms enacted by this government. Whistleblowers left to fend for themselves in a court system where the deck is stacked against them.