Is PWC Australia a criminal organisation?

Jun 19, 2023
Wooden scales on a turquoise background.

Secrecy and the need to ensure natural justice for Peter Collins & other PWC Australia staff who received or used confidential information, prevents disclosure of the specific offences being investigated by the Australian Federal Police (AFP). But there will be no shortage of possible offences to investigate. They range from a breach of tax secrecy laws, making false or misleading statements, obtaining a financial advantage by deception, general dishonesty, to conspiracy to defraud the Commonwealth, and money laundering.

Establishing that any person committed fraud will depend on the intention of Collins and others when he entered into the confidentiality agreements in December 2013, April 2016, and February 2018 and what they did and knew at the time or later during their involvement. Of the money laundering offence, it is an act of money laundering to receive, possess, conceal, or dispose of property that is the proceeds of crime and that includes intangible property such as information. Three fault elements apply to the primary money laundering offences namely knowledge, recklessness, and negligence. PWC staff as professionals are required to act with integrity, which is reinforced in the organisation’s core values. It might be difficult for them to rebut any claim they were reckless or negligent when dealing with the confidential information they received. And if anyone of those fault elements cannot be established, then there exists another offence of receiving, possessing, concealing, or disposing of property reasonably suspected of being the proceeds of crime that can be applied to every PWC employee and client who received the unlawfully acquired information. Clients who benefited from the information and who structured their business processes to reduce their tax liability, should be very concerned.

Three years before Collins signed the first confidentiality agreement, the Commonwealth inserted Division 390 Criminal Associations and Organisations into the Criminal Code Act. Designed to counter traditional criminal organisations for example outlaw motorcycle gangs, it can and should be applied equally to any organisation that is engaged in criminal activity. The code does not define a criminal organisation. It captures organised criminal activity. And given what has come to light recently during the Senate inquiry, it would capture PWC Australia.

The provisions of Division 390 which are relevant to PWC Australia are sections 390.3, 390.4 and 390.5. Section 390.3 creates an offence of associating in support of serious organised criminal activity. That section prescribes an offence for any person who associates on two or more occasions with another person and that person engages, or proposes to engage, in conduct that constitutes in whole or part an offence against any law. The associations must facilitate the engagement or proposed engagement by another person in conduct that involves two or more people and the offence involved is a constitutionally covered offence (which includes an offence against Commonwealth law). The actions of PWC staff associating with each other (or with any other person) to discuss alleged criminal use of the confidential information would fall within the provision. And as associate means “meet or communicate by electronic communication or otherwise”, virtual discussions and email exchanges held during any period partners and staff worked remotely from home including Covid-19 lockdowns would be captured.

Section 390.4 creates an offence for any person supporting a criminal organisation. It carries a penalty of up to 5 years imprisonment. In simple terms, a person commits an offence against that section if they provide material support or resources to an organisation or a member of an organisation. And either the provision of the support or resources aids or there is a risk that the support or resources will aid an organisation to engage in conduct constituting an offence against any law. If any organisation, is involved in criminal activity, then a person would commit an offence. What is material and whether the actions of a few partners bind PWC Australia is for a court to decide.

Section 390.5 prescribes a penalty of imprisonment of up to 7 years. A person commits an offence if they commit an offence against any law which was committed for the benefit of an organisation which consisted of 2 or more persons and the organisation’s aims or activities include facilitating the engagement in conduct, or engaging in conduct, constituting an offence against any law that is, or would if committed be for the benefit of the organisation. No doubt, PWC partners and staff involved in the scandal did so to benefit the firm and PWC Australia would have benefited substantially by communicating confidential information to clients.

With approximately 63 partners and staff of PWC Australia allegedly implicated in the tax leak scandal, including four who masterminded the sharing of confidential information on changes to multinational tax avoidance laws, it is not difficult to imagine the organisation as being a criminal organisation.

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