Flight Centre has been implicated in a long-running travel rorts scandal in the Northern Territory and police have revealed 10 agencies are under investigation.
It follows revelations the company had repaid about $2.3m to the government in relation to subsidies claimed through a government travel concession scheme which is subject to a fraud investigation.
The scandal centres around the alleged practice by some agencies of submitting inflated invoices for travel bookings to the health department’s pensioner and carer concession scheme. Police have examined about 16 agencies and executed warrants on several NT businesses and premises.
In a statement late on Wednesday NT police confirmed the 10 agencies – later confirmed to be Flight Centre-affiliated – were under investigation after a referral by the health department. A 2013 Ernst and Young report is understood to have found Flight Centre was receiving overpayments, and the matter was taken to NT cabinet that same year.
Since it was requested to in September 2014, Flight Centre has “fully cooperated” and submitted information on “a large number of transactions” to the health department, a spokesman for the company said.
“The company also volunteered to promptly repay any subsidies that may not have complied with the scheme’s rules and has repaid in the order of $2.3m.”
The NT attorney general and health minister, John Elferink, said on Thursday the repayment was a civil settlement and should not be seen as related to the police referral.
“[As a] settlement of a civil debt you cannot automatically assume that’s evidence of anything that may or may not be in the criminal domain,” he said, before police announced their investigation.
Elferink added such a payment did not absolve any potential criminal liability.
Flight Centre would not confirm how many NT agencies were involved in the police investigation, but the spokesman said the company was “proud of its record as a leading provider of high quality travel services to territorians and highly values its relationship with the government of the Northern Territory.
“It welcomes the opportunity to address any ongoing issues with the past administration of the pension scheme, will continue to cooperate with all territory agencies, and will of course do everything as may be properly required of it by the NT police to assist in any of their inquiries.”
Elferink said the scheme came to the government “in disarray” and there had been “a number of issues that have already been through the court system clearly demonstrating that the PenCon scheme was vulnerable”.
On Friday the deputy chief minister, Peter Styles, asked what level of audits had been conducted within the health department in the past.
“Perhaps this an area that’s come so much into the public eye and now we’ve got criminal investigations, the auditor general may decide to look at what systems are in place in the health department,” Styles told local radio.
In March a Katherine travel agent pleaded guilty to one count of obtaining benefit by deception, reportedly rorting the government of $40,000 by inflating invoices to the scheme.
Last year the owner of Latitude Travel, Xana Kamitsis, was sentenced to almost four years’ jail – suspended after 18 months – for fraud totalling $124,000.
Kamitsis, the former head of NT Crimestoppers, also pleaded guilty to one count of corruptly giving benefits to Paul Mossman, a staffer of government minister Bess Price, to obtain business for Latitude Travel.
Mossman is due to face trial later this year.
The Kamitsis case was also linked to the demise of John McRoberts’ career as NT police commissioner, after he was accused of seeking to interfere with a police investigation into Kamitsis.
McRoberts was presented with evidence obtained during a criminal investigation “and his reaction was to resign”, the then police minister, Peter Chandler, said.
Late on Friday NT police announced a 40-year-old Alice Springs man had been charged with one count of criminal deception in relation to the scheme.
The charge relates to alleged fraudulent activity between 2011 and 2013 and the man will face court at the end of the month.
