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Bri Lee on the loophole being exploited, and why the government has failed to act.

The abusers hiding their money in super

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One of the ways survivors of child sexual abuse or violent crime can seek redress is through compensation. 

But, at that point, some discover that the perpetrators have hidden their assets - in their superannuation funds, where it can’t be reached.

It’s a common enough problem that four years ago, the government promised to fix it. So far, however, it has failed to act on that promise. 

Today, contributor to The Saturday Paper Bri Lee on the loophole being exploited, and why the government has failed to act. 

 

Guest: Contributor to The Saturday Paper, Bri Lee.

 
Read Transcript

[Theme Music Starts]

RUBY:
From Schwartz Media, I’m Ruby Jones, this is 7am.

One of the ways survivors of child sexual abuse or violent crime can seek redress is through compensation. 

But, at that point, some discover that the perpetrators have hidden their assets - in their superannuation funds, where it can’t be reached.

It’s a common enough problem that four years ago, the government promised to fix it. So far, however, it has failed to act on that promise. 

Today, contributor to The Saturday Paper Bri Lee on the loophole being exploited, and why the government has failed to act 

This episode contains descriptions of grooming and abuse.

It’s Thursday, March 31. 

[Theme Music Ends]

RUBY:
So, Bri, can you tell me how it is that you became interested in this story? 

BRI:
Yes. So about a month ago, I got an email out of the blue from a lawyer based in Adelaide named Andrew Carpenter. 

Archival Tape -- Andrew Carpenter:
“I just said, Hi Bri, I'm a lawyer in Adelaide who specialises in survivors of childhood abuse claims…”

BRI:
And he'd reached out to me because he was told that I covered stories relating to law reform in Australia or stories relating to survivors of adult or child sex crimes. 

Archival Tape -- Andrew Carpenter:
“I had a discussion with Justice Ned about a law I'm trying to get changed. It was suggested that you may be able to point me in the right direction. Can you please call me for a quick chat?”

BRI:
And he described this problem to me, where survivors would turn up to his office looking for help in basically holding a perpetrator to account. And the problem Carpenter described to me was that more often than not, perpetrators were able to dump a huge amount of their money, if not most or all of it, into their lawyers' trust funds and into their superannuation. 

Archival Tape -- Andrew Carpenter:
“Now, most offenders, if they're elderly, they often have a house and they live off their superannuation. What then offenders will do is because they're entitled to legal representation, they'll significantly mortgage their house, put money into their lawyers trust account, and they'll start defending the action.” 

BRI:
And that once that money hit super, the survivors were precluded from accessing that in a compensation claim.

Archival Tape -- Andrew Carpenter:
“So what I'm seeing a lot lately is many of the offenders are actually putting money into superannuation to avoid their survivors from actually seeing the claim that back”

BRI:
And that that was the case even when a survivor was able to secure a criminal law conviction against a perpetrator that a perpetrator could either declare bankruptcy or not, but that they could be sitting on millions of dollars in superannuation, which could let them live very comfortable lives for the final few decades of their life. Meanwhile, these survivors whose interests Carpenter was representing were really struggling.

Archival Tape -- Andrew Carpenter:
“So then at the end of the day, you've got people who are force with either running an action against someone who has limited funds against the name, or they tend to take settlements at the earliest possible stage because once the assets, once the equity in the house is gone, they can't touch anything.”

RUBY:
Right ok and so what else did Carpenter say to you about those survivors that he’s representing? What kinds of things had they experienced, that led to this point?

BRI:
So Carpenter told me one story in particular about a woman who we cannot name, of course, for legal reasons. 

Archival Tape -- Andrew Carpenter:
“So I got referred to by that amazing young woman who goes by the name of S. She was the most popular girl in school. She was a primary school captain. She was captain of the baseball team. Unbeknownst to her, her godfather, who used to be her father's business partner, had been grooming her for a number of years. It got to the point where the family finally trusted The Godfather to have sleepovers the whole time he had a certain affinity towards S. What happened then was he started sexually abusing S, and so he was arrested. He was subsequently found guilty.”

BRI:
He appealed to the Supreme Court, who upheld the conviction, and he appealed all the way up to the High Court, who also again upheld his conviction.

Archival Tape -- Andrew Carpenter:
“And so this offender had a freehold house had millions of dollars in super. We went to sue him. And as a usual paedophile there’s quite a narcissistic approach they get because they're all about control and taking away agency of the survivors.”

BRI:
And Carpenter told me that when he went to then assist this survivor in making a financial claim against the perpetrator, he said that he would rather pay his lawyer 20 grand a day than give the girl a cent - because this survivor was ruining this perpetrator's life.

Archival Tape -- Andrew Carpenter:
“And so that's the attitude that you're getting from quite a lot of paedophiles as they think that they've been wronged by their survivors for simply speaking out about their crimes because they feel like the control element has, has ended.”

BRI:
The sort of people Carpenter describes dealing with will do whatever they can to avoid paying any money to these survivors.

RUBY:
So it sounds like what you're describing is a situation where victims of a crime can't access compensation that they're owed because the perpetrators are essentially hiding their assets, putting them into superannuation accounts, and from there they can't be accessed. Is that even legal?

BRI:
Yes, it is legal. And what's really interesting about this matter is that it's not even really about criminal law, it's actually about superannuation law. The way superannuation works in Australia is that an individual's super is exempt from claims made against them. 

And a person can even have a huge amount of money in superannuation but declare bankruptcy, for example. So then what you have is a situation where regardless of any criminal law outcomes, but even if this person goes to jail for even a short or long amount of time when they come out on the other end, they can live in extraordinary comfort at the end of their life. While the survivor is not able to access any of that cash that the perpetrator has hidden and put aside for them. 

And we have known about this problem for a really long time. Back in 2017, the government acknowledged that this was a problem and they commenced, you know, one of their classic big review procedures into the issue. So they accepted a lot of submissions. They drafted responses. They had all of these roundtables. And in 2018, they released a final report.

So when that report came out  the then Minister for Revenue and Financial Services, Kelly O'Dwyer, announced that the government would, and I quote, legislate to ensure that victims of serious crimes will be able to access the perpetrators superannuation. 

The government made a very explicit commitment to introducing that legislation by the end of that year.  

That was back in 2018. and then just absolutely nothing happened. 

RUBY:
We'll be back after this.

[Advertisement]

RUBY:
Bri, four years ago, the federal government promised to legislate to ensure that victims of serious crimes will be able to access the perpetrators superannuation. That hasn’t happened - why not? 

BRI:
That's a really great question. I emailed, of course, the federal treasurer's department. And the response I got was an incredibly convoluted whole lot of nothing, just an excuse that this is a really complex area of law and that they didn't want to rush it. I followed up by asking if they had any specific timeline to do any, I suppose, clarifying extra stages or any other commitments, and they did not respond. 

Archival Tape -- Andrew Carpenter:
“The Federal Treasury raised an issue that all the offenders are going to have to then rely upon the old age pension to survive.” 

BRI:
So this is the only even kind of half and so anyone could think of trying to try and explain the delay on the government's part. And it's this concern, I suppose, that if you allow claims to be made against a perpetrator's superannuation, that there is a risk that that perpetrator that will then be pushed from their own, you know, sort of self-funded retirement onto welfare to survive in their later years, which I think Carpenter makes a very clear, compelling argument against because the survivors he is currently representing, a lot of them are facing extraordinary financial hardship because of the lifelong effects of the abuse that they were subjected to. 

Archival Tape -- Andrew Carpenter:
“Now, many of the survivors that I've come across many of the brave ones over the years, they can't work about, never work. And so I said to the representatives from the Treasury: Who's going to be the bigger cost? You’re either paying for survivors to be on the on the Social Security system for potentially 30, 40, 50 years, or the offenders 10 to 15 years. It makes financial sense for the government to stop paying for paedophiles’ crimes and enable other ways for survivors to seek redress because one, it's in their best interest and two, it's going to save the government a lot of money.” 

RUBY:
Hmm. And do we know how often this could be happening, how many people could be using superannuation accounts to hide their wealth in situations like this?

BRI:
It's pretty much impossible to ever quantify, mainly because so few of these cases ever make it to the stage of the courts where judgements would be published. Part of the reason for that, ironically, unfortunately, is that they're they're so often is not enough money available to even potentially be claimed by the survivors that a lot of lawyers will advise them, often accurately, that it's not worth going after any kind of compensation. 

Archival Tape -- Andrew Carpenter:
“What I do believe we’ll see is that if this reform in superannuation, people will then go right, there is a light at the end of the tunnel. I'm not going to be bullied again by the offender by simply trying to dispose of assets and say, I don't have anything in my name. They'll then have something to actually gain against the offender…” 

BRI:
You know, in some very practical ways, for a lot of these people struggling, it is just about the cash and about living a comfortable life. But for a lot of them, it's not really about the money, it's about encountering a justice system that was not designed to hear their complaints. It's about trying to find any possible way of of feeling like even a sliver of justice might be done to acknowledge the enormous hurt and damage that was done by a perpetrator. 

RUBY:
Hmm. And so what has this time been like for those survivors, then who presumably had a sense of hope and relief that this would be addressed, but since then have been waiting for any kind of financial reparation? 

BRI:
I can imagine that it would be absolutely devastating. The main lawyer I spoke to about this issue, Andrew Carpenter, he used the phrase more often than not for the frequency with which survivors would come to his office for help, and he would have to tell them that it basically looked like the perpetrator didn't have any cash that would be available to them.  

Archival Tape -- Andrew Carpenter:
“Usually, what you see with many survivors is the impact of the assaults committed against them. It just cripples them. Many will never work. We never owned a house or never have kids, will never be able to finish education.”

BRI:
And Carpenter told me about representing and dealing with survivors who couldn't even afford their mental health medication. 

Archival Tape -- Andrew Carpenter:
“They're living off Centrelink and the cost of psychiatric assessment. Every week, the cost of medication, often they go without food to afford their medication.”

BRI:
What we know is true is that often the psychological and physiological effects for survivors are significant, and they often have complex post-traumatic stress disorder or other disorders. And earning a sort of normal living wage for a lot of these people is a near impossibility. 

Archival Tape -- Andrew Carpenter:
And that's mainly because one the offenders are only getting some slaps on the wrist and suspended sentences rather than jail time, but also because offenders are not being forced to pay significant compensation to the survivors.

BRI:
And they have been waiting decades, often before they even feel ready enough to make a complaint.  

I think it's pretty easy to imagine how disappointing it would be when they do finally come forward to learn that inexplicable delays from the federal treasurer's department mean that their perpetrators can live the final several decades of their life in luxury - while the survivors left behind are doing it really tough. 

RUBY:
Bri, you so much for your time.

BRI:
Thank you. Thank you for having me.  

[Advertisement]

RUBY:
Also in the news today,

In NSW, Byron Bay's central business district is underwater after record breaking rainfall caused flash flooding and prompted several evacuation orders across the Northern Rivers region down the Mid North coast.

 

Lismore's levee has “overtopped” and residents within low-lying areas near Kempsey have been told to evacuate the high danger area.

 

**

 

And Ukrainian President Volodymyr Zelensky will address a rare joint sitting of the federal Parliament today.

 

Zelensky is expected to speak to Parliament in a move to thank Australia for its support after the Russian invasion of Ukraine and urge more international support against the invasion.

 

I’m Ruby Jones, This is 7am, see you tomorrow.

 

Host

Ruby Jones is an investigative journalist and host of 7am.

Guest

Bri Lee is a legal academic and the author of Who Gets to Be Smart.

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