Australian lawyer arrested for third time in Papua New Guinea over alleged $100m fraud
An Australian lawyer has been arrested for the third time in Papua New Guinea over the alleged misappropriation of 268m kina ($AUD104m) from a trust fund linked to the controversial Ok Tedi mine, alongside three others.
Greg Sheppard, a former Queensland crown prosecutor, has previously been charged with eight counts of financial misconduct including money laundering. He was arrested and bailed in January and June.
Edna Oai, Annie Smerewai and Boston Kassiman, all directors of the Ok Tedi Fly River Development Foundation Limited (OTFRDF), have also been arrested and charged with 15 counts of financial crime including misappropriation and false pretence.
Police on Wednesday described the allegations, if proven, as the “single biggest fraud that has ever been investigated by police in the history of the Royal Papua New Guinea Constabulary”.
They were still seeking to arrest and charge the chief executive officer, Samson Jubi, and others.
In January, Sheppard’s law firm, Young & Williams Lawyers, and the trust fund board, rejected the charges against him as “politically motivated” and an “unlawful attempt by powerful forces in PNG” to keep control of money intended for communities affected by mine pollution.
A spokesperson for Sheppard’s law firm said at the time it had always acted on the advice of OTFRDF and “all transactions have been in accordance with the PNG court order”. The Guardian has again approached them for comment.
On Wednesday, the police commissioner, David Manning, denied the investigation was politically motivated. “The fact that significant funds have [allegedly] been expended by ‘trustees’ with no actual benefit to the ‘beneficiaries’ ought to loudly speak for itself,” he said.
Police allege 268m kina was misappropriated from the Western Province People’s Dividends Community Mine Continuation Agreement (WPPD CMCA) trust fund and improperly paid into the accounts of the Ok Tedi Fly River Development Foundation and Sheppard’s law firm.
The trust fund was established with profits from the Ok Tedi copper and goldmine to fund development projects, such as roads, schools and health clinics for villages in Western Province affected by the mine.
But for years, residents of those villages, and politicians in Port Moresby, have complained that none of the money has ever reached Western Province, which remains one of the most impoverished regions in the country.
According to Young & Williams’ website, Sheppard has been practising in Papua New Guinea since 1990 and has counted “prime ministers, ministers of state and businessmen” among his clients.
Sheppard was also the manager of Brisbane indie-pop group, Sheppard, of which three of his children are members. The group had a No 1 Australian hit single, Geronimo, and performed at the AFL grand final last October.