Ex-Wallaby’s charity faces big fraud claim
SYDNEY The New South Wales state government has accused a children’s care charity run by former Wallaby Glen Ella of misappropriating A$20 million. The money was paid in subcontracts to companies linked to criminals.
Guardian Youth Care received millions of dollars in public money to provide fulltime care for children from dysfunctional families in Sydney before it slid into administration.
A Fairfax Media investigation last month exposed the not-forprofit company’s parlous financial position, as well as questions over its borrowing and lending. Youth workers and former residents have since described serious neglect of children and illegal working conditions.
Now a report by an external administrator has found that Guardian Youth Care directors, including Ella as chief executive, may have breached their duties through unauthorised loans and contracts.
The report outlined allegations by the Department of Family and Community Services and an accounting firm of misappropriated funds, irregular payments and false expense claims.
The administrator found that the charity may have traded while insolvent for up to four years, and has referred it to the corporate regulator regarding ‘‘any potential offences’’.
Roy Bijkerk, who was convicted of conspiracy to import cocaine in 1999, helped to found Guardian Youth Care in the early 2000s, before the company became a not-for-profit in 2008.
The Department of Family and Community Services has paid the charity base funding of A$6.4 million a year since 2012. But the charity is now accused by the department of subcontracting work without authorisation.
Millions of dollars in ‘‘management fees’’ were paid to Alpha Support Services, a company controlled and owned by the Bijkerk family.
Convicted murderer Ned Bikic has also served as a director of Alpha Support Services, after an 11-year minimum jail sentence.
Bijkerk and Bikic run Sunergos Support Services, which the charity has paid A$30,000 a month since 2013 – roughly A$1.4m. The pair own the com- pany with Samantha Madigan, a Guardian Youth Care director.
The charity was not allowed to subcontract without approval from the department, which now claims A$19.6m in management fees were misappropriated, according to administrator BRI Ferrier.
Guardian Youth Care directors have said all funding was spent on the children in care, most of whom have histories of abuse, mental illness and drug addiction.
But the subcontractors are refusing to open their books, leav- FAIRFAX ing the administrator in the dark about how the money was spent. BRI Ferrier said numerous requests for information had been ignored since it was called in late last month.
In the end, Guardian Youth Care had just A$28 in the bank.
A number of former youth workers and residents have told Fairfax Media there was often not enough food or clothing in the western Sydney group homes. Shannon Smith, 20, a resident for three years, said conditions were ‘‘quite appalling’’.
When Guardian Youth Care shut in the last week of June, some children were only told the day before. But the department told the charity months ago that it would not receive funding beyond the financial year, after protracted disputes over money and placements.
The charity has claimed the government owed it A$1.7 m to A$2.3m.
A review by accounting firm Deloitte reported last September that the department owed A$332,000, according to the administrators. But Deloitte also found that Guardian Youth Care had breached financial obligations and conflict of interest rules and misappropriated funds.
Large loans to and from the charity remain unexplained.
For instance, it has claimed since 2012 that Alpha Support Services would repay a A$686,000 loan. Alpha said this must be an error.
Without those loan repayments to count on, the charity may have been insolvent since 2012, the administrator found. More conservatively, it was likely to have traded while insolvent since late March.
Ella, a director since May 2013, had signed off on accounts to say all debts were able to be paid.
Guardian Youth Care also allegedly made unauthorised loans of A$899,000 to ‘‘related entities’’, which were not repaid but ‘‘extinguished’’ by way of services rendered.
The department failed to answer questions about when it first learned of concerns about conditions within the children’s homes.
Directors of Guardian Youth Care, including Ella, did not respond to questions. Neither did Bijkerk or Bikic. Fairfax