The Tahitian Prince Fraud

This report of the week is a serious contender for the fraud of the year.

This is largest fraud ever identified in the public sector of the state of Queensland, Australia.

It happened at Queensland Health – which avid readers will recall was also the organisation that implemented a payroll system that “must take a place in the front rank of failures in public administration in this country.” (Reference: Sick – The Implementation of the Queensland Health Payroll System)

The Queensland Crime and Corruption Commission (CMC) report is so full with great details that you need to read it in its entirety for yourself.

In the interests of condensing the story lets take an abridged part of the report and journey into the play book of fraudulent intent, ineffective systems and processes and people willing not to see what was right before their eyes.

It is still a long read – but well worth the investment of your time.

If there is one report that you share widely with your Management team it is this report.

How no one stopped to think that an invitation to a Queensland Health employee to the wedding of Prince William and Kate Middleton didn’t seem strange probably sums up many aspects of this story.

So read on …

**

Joseph Hikairo Barlow was born in New Zealand on 13 February 1975.

The curriculum vitae Barlow provided to Queensland Health (QHealth) stated that he received a number of tertiary qualifications and academic awards in New Zealand between 1995 and 1999.  Barlow, it turns out never had any academic qualifications.

However, inquiries conducted by the QPS confirm that Barlow does not, in fact, possess any tertiary-level qualifications. A Transcript of Academic Record from Victoria University shows that in 1996 Barlow commenced, but failed to complete, a Bachelor of Commerce and Administration and a Graduate Diploma in Professional Accounting. There is no evidence he received any academic awards.

On 10 May 2001, Barlow changed his name by deed poll to Hohepa Hikairo Morehu-Barlow, and on 31 March 2003 he left New Zealand and moved to Australia.

In July and August 2003, Barlow was recorded as being wanted in New Zealand for questioning in relation to a fraud committed while employed as a private contractor to a steering group funded by
a New Zealand Government department, and in relation to another fraud committed after his employment with a private business was terminated due to theft.

Barlow was employed by QHealth in 2004 as a contractor in a position obtained through an employment agency.

A former colleague said that when Barlow started working for QHealth in 2004 his lifestyle was beyond the means of his QHealth wage. He said Barlow told QHealth employees that he was Tahitian royalty and made it known that he had a trust fund but needed to have a job to access it.

Over the next couple of years Barlow worked in various positions in different sections at QHealth and on numerous occasions was given the opportunity to perform higher duties. The majority of these positions were finance-related roles. In January 2007, he was permanently appointed as an  Assistant Finance Officer.

In July 2007, Barlow was authorised to have access to a QHealth corporate credit card. His financial delegation (the amount of expenditure he was entitled to authorise) for business-related expenditure was $1000 per day, with a monthly limit of $10,000.

From September 2007, Barlow began to perform higher duties in the position of Principal Finance Officer (PFO).

In this position, Barlow gained reporting and monitoring responsibility for QHealth grants cost centres, including the Minister’s Grants in Aid (MGIA) and Non Government Organisation Support (NGOS) cost centres.

On 3 October 2007, 12 days after commencing as the PFO, Barlow established Muse Business Inspiration (The Muse) as a QHealth vendor. The Muse was a business registered to Barlow’s neighbours, established to work in the areas of strategy, communications, policy and advocacy,and dealing mainly with not-for-profit organisations and small businesses.

Barlow signed the vendor set-up form for The Muse as authorising officer. No vendor address was included in the form and no Australian Business Number (ABN) search was attached to the form.

The following day, Barlow authorised the first fraudulent payment of $2200.61 to The Muse using a General Purpose Vouchers. He authorised subsequent fraudulent payments to The Muse on 29 October ($2200.61) and 10 December ($6601.80), bringing the total of money defrauded from QHealth at the end of 2007 to $11,003.02.

Relatively early in his employment, staff began voicing concerns about Barlow’s poor attendance and work performance. This would be a recurring pattern throughout his time at QHealth.

  • Finance Officer 3 said Barlow was never in the workplace before 10 am and was a very inconsistent worker. He would disappear for lunch breaks for hours on end and didn’t complete timesheets. Often he would not turn up for meetings. He also generated more workload for other staff members as he didn’t respond to requests.
  • An officer who worked with Barlow in 2007 said Barlow was very difficult to deal with because of his spotty attendance at work and he wasn’t very responsive .
  • Finance Officer 2 said Barlow bullied him and other staff and recalled a number of staff members crying because of the way Barlow treated them. He said Barlow did not complete timesheets, regularly started work late and sometimes left early, and took a lot of leave without pay in block periods; however, he appeared to be on top of his work requirements.
  • Sometime in 2008, Manager 1 asked an officer to reconcile a budget previously managed by Barlow. The officer identified that there were no controls over the payments being made and told Manager 1 that “budgeting wasn’t Barlow’s strong point”. Once he had reconciled the budget, the officer said Barlow bought him a new iPhone to thank him for not making an official complaint about Barlow’s mismanagement of the budget. However, he had refused to accept the gift.

The officer also said Barlow regularly arrived at work between 12 and 3 pm, and treated junior staff with contempt — for example, telling them to pick up his dry cleaning and get him coffee.

The officer reported both the gift and his concerns about Barlow’s conduct to Manager 1 and another senior officer. He said Barlow’s supervisors tried to deal with his conduct, but Barlow would just take leave to avoid the issue.

Despite these recurring performance and conduct issues, Barlow was permanently appointed as a PFO on 22 May 2009.

Throughout 2008, Barlow continued to engage in fraudulent behaviour:

  • He authorised two further fraudulent payments to The Muse on 15 February ($7700.77) and 20 March ($15,400).
  • On 5 May, Barlow signed a letter to Queensland Transport in relation to demerit points accumulated by a friend and referred to himself as a “solicitor” and “legal counsel”. In an undated letter to the Fortitude Valley Police Station related to this matter, Barlow also referred to himself as a solicitor for the state government.
  • He authorised fraudulent payments to The Muse on 22 May ($15,400) and 6 August ($27,500).

The August payment was the final one Barlow authorised to The Muse. It was also the first payment to be made from the Minister’s Grants in Aid (MGIA) cost centre.

As described above, as PFO Barlow had responsibility for the MGIA cost centre. This cost centre became the primary target of Barlow’s offending, with all but seven of the fraudulent transactions being paid from it.

The MGIA cost centre had been established as a discretionary fund for the Minister for Health to provide one-off payments to fund health-related priorities. To make a grant, the Minister would give the area in charge of the MGIA written approval identifying the grant recipient, the funding amount and the purpose of the funds. On receipt of the approval, the responsible unit coordinated payment
of the grant and the Minister’s office was advised once the grant was paid; there were no contract or service level agreements and no assessment of outcomes. There was no payment limit, but the budget gradually increased from $250,000 in 2007–08 to $406,000 in 2011–12.

On 26 September, Barlow prepared and authorised the vendor set-up process to establish “Healthy Initiatives and Choices” (HIC) as a QHealth vendor. HIC was a trading name registered to Barlow as the individual operator and owner, and was registered to his home address. The entity name “Healthy Initiatives and Choices” in the ABN search attached to the vendor set-up form appears to have been manually inserted in place of the actual entity name of “Hohepa Hikairo Morehu-Barlow”. Further, the ABN was registered two days after the date of the HIC invoice attached to the vendor set-up form.

When interviewed by CMC officers, Barlow confirmed he established HIC for the sole purpose of perpetrating frauds against QHealth. When asked what he considered to be the likelihood of being caught submitting the vendor set-up form for HIC, Barlow said:

… a simple ABN search would have stopped this in the beginning

and later,

… it could of easily been found out and stopped had the Finance Business Centre done its due diligence.

Asked what would have happened if the checks had been done, Barlow said “I would of had to deal with it but it was a gamble”. He said that he thought there was a very good chance the form wasn’t going to get through, but he was prepared to take that risk.

Shortly after HIC was authorised as a QHealth vendor, Barlow processed the first fraudulent payment to HIC; it was an amount of $33,000, larger than any of the payments sent to The Muse. He authorised five further payments to HIC in 2008, each of $33,000.

All payments to HIC except one would be made from the MGIA cost centre.

QHealth located GPVs for 52 of the 58 fraudulent payments made to HIC. Barlow’s name and signature appear as delegated approval officer on all the located GPVs, which were co-signed by various QHealth staff.

Barlow authorised the GPVs using various position titles. Some of these either no longer existed within the organisation, or never existed, and accordingly were not included in the relevant delegation register. That Barlow was able to successfully use non-existent position titles demonstrates that staff did not check his delegation limit before certifying the GPVs and processing the payments.

In January, QHealth received an organisational review report and a working group was formed to implement the review recommendations.

Between January and May, Barlow authorised nine fraudulent payments to HIC totalling $379,500.

According to QHealth advice, the Minister for Health relinquished responsibility for the MGIA cost centre by email dated 17 June, and transferred responsibility for it to the Director-General, QHealth.

In June, Barlow authorised another two fraudulent payments to HIC from the MGIA cost centre, bringing his total fraudulent gains in the first half of 2009 to $482,494.10, nearly half a million dollars.

By the end of June, the majority of the review recommendations had been implemented, resulting in significant organisational change. As part of the review, finance roles and functions were progressively centralised within the Finance Branch. Sometime in 2009, Barlow’s team was re-named the Community Service Purchasing (CSP) team, and at the end of July it was transferred to the Finance Branch.

A member of the working group established to implement the review recommendations said it was expected that the CSP team’s former supervisors would speak to the new managers to discuss roles and responsibilities, work output and the transition process. The evidence suggests this did not occur. The CSP team did not physically relocate to the Finance Branch until late in 2009 and it seems that during this time Barlow’s team was unsupervised.

After July 2009 and coinciding with the transfer of the CSP team, MGIA transactions began to be recorded in a single financial management system. Due to access restrictions, Barlow’s CSP team was relied upon to monitor the system and report on the overall expenditure of the MGIA.

From July to September, seven fraudulent payments were made to HIC totalling $378,379.10.

From October to December, Barlow authorised four fraudulent payments to HIC totalling $343,981.  The payment of $137,592.40 in December became the payment amount he used most commonly.

Of the 31 payments made from December 2009 until the frauds were discovered, 28 payments were for $137,592.40.

By the end of 2009, Barlow had defrauded QHealth of $1,204,854 over the 12 months, with a total of $1,479,857.98 having been defrauded since October 2007.

In addition, around the time the CSP Division was established, QHealth was in the final stages of releasing a new payroll system. Staff advised that, in the months following its establishment, senior QHealth management and senior Finance Branch staff were focused on rectifying the difficult issues surrounding this system.

In April and May, Barlow authorised three more fraudulent payments to HIC, each of $137,592.40.

On 5 August, the CMC received an anonymous email complaint alleging that Barlow (under the name Joseph Hikairo Barlow) was defrauding QHealth and was due to leave Australia on 24 August 2010
“to start a new life of luxury” in Paris. The complaint also listed a number of his aliases.

Based on set criteria established by the CMC, the CMC officer responsible for handling the complaint determined:

  • The complaint did not meet the criteria of a Category 1 (the most serious) complaint because it did not specify that a substantial amount of money was being defrauded, did not allege that the fraud was being committed by a very senior officer, and did not indicate that the fraud was systemic.
  • The matter did not involve a public interest disclosure (PID), as set out by the Public Interest Disclosure Act 2010. PIDs about official misconduct can only be made by public sector employees and there was no information to indicate that that was the case.

Because the complaint was made anonymously, there was no way to contact the complainant and seek further detail about the allegations.

Criminal history checks were not done as the complaint concerned an agency whose Ethical Standards Unit included a seconded police officer who could do them. Barlow’s complaints history was not checked, as this was the responsibility of QHealth under the complaints management process in place at the time.

The CMC officer did not respond in a timely way to the information in the email stating Barlow’s proposed date of departure from Australia. However, that part of the anonymous complaint was not accurate, as Barlow did not in fact leave the country for Paris on that date. As a result, the complaint was not sent to QHealth until the day that Barlow was allegedly intending to leave the country.

The complaint was received by an officer within the QHealth Ethical Standards Unit (the ESU case officer).

On 27 August 2010 the ESU case officer received an email from Manager 4 (the Chief Financial Officer) stating:

Ho’s position has financial delegation of $5000 and procurement delegation of $10,000 — which is reasonable for an officer at his level and the fact that he holds a Corporate Card — yes I have checked transactions on this there have been none over the last five months. Business support examine our accounts on a monthly basis and have noted nothing untoward being charged to the accounts. As discussed Ho administers grant expenditure (procurement decision in this area rests with Community Services in Health Purchasing and Logistics and DDG PandA for [organisation name] — so adequate separation of duties) — Grants administered far exceed Ho’s financial delegation and require either sign-off by myself or a Senior Director in the Branch.

It appears to have been common knowledge in Barlow’s workplace that he used the names Joel and Joseph as well as Hohepa; he lived an extravagant lifestyle seemingly well beyond his wage; he bought gifts, often expensive ones, for people in the workplace; he claimed to be royalty; and there were persistent concerns about his conduct, attendance and work performance. None of this relevant contextual information was captured or communicated to the ESU case officer.

The ESU case officer has said that had he been made aware of the full picture about Barlow, red flags would have been raised and full inquiries conducted, rather than simply relying on the advice in Manager 4’s email.

Shortly after receiving Manager 4’s email, the ESU case officer replied:

Based on your advice I think I will close the file. I won’t send any advice to Ho as he hasn’t been interviewed nor advised of this matter.

Following the complaint, Manager 4 did not initiate any follow-up inquiries or monitoring of Barlow’s work.

Barlow’s conduct and performance continued to be erratic.

  • An officer who worked with Barlow said he was pretty much always late for work. I don’t think he would have got to work any day before 10.00 am.
  • A senior officer in Barlow’s previous work unit said he complained to Manager 3 about Barlow’s poor work performance: that he failed to complete normal processes, hardly ever showed up for work, and failed to deliver on what he promised to do.

The senior officer also spoke to Manager 2, Barlow’s direct supervisor in Finance, about Barlow’s poor work performance. The senior officer said he believed that Barlow could not fulfil the functions of the PFO position and thought Barlow provided poor service to his unit. Manager 2 said the senior officer did not raise any issues with him about Barlow’s work performance.

  • An officer who worked with Barlow said:

I used to think it was strange that Ho used to come to work at about eleven o’clock then leave about two and worked so little. He then got promoted to manager of governance. He also used to come into work later after we had all left. He would sign in using Facebook to let everyone know he was working late.

  • Finance Officer 3 was asked to fix some budget reporting problems, which were Barlow’s responsibility. He discovered the budget reports were being “flatlined” (no variance was recorded) and did not reflect the true state of the budgets. Finance Officer 3 said he spoke to Barlow “lots of times” while he was trying to fix the budget reports, and Barlow was “not impressed” with his inquiries.
  • Manager 2 said he had concerns with Barlow’s conduct including timeliness of reports, non-completion of timesheets, and hours worked. He brought these issues to Manager 3’s attention and he assumed that Manager 3 raised the issues with Manager 4.
  • Manager 3 was aware of various issues related to Barlow’s conduct, such as working irregular hours, providing questionable reasons for his sick leave, and not providing payroll forms (such as sick leave and annual leave) despite constant requests.
  • Manager 3 said he often spoke to Manager 4 about his concerns with Barlow, but Manager 4’s response was “well that’s Ho”. He believed Manager 4 defended Barlow and had faith in
    his abilities.

Five fraudulent payments were made to HIC in September and October of 2010, each of $137,592.40.

Barlow gave gifts to numerous QHealth employees during the period when the frauds were occurring. He gave gifts to staff he worked with (supervisors, subordinates and peers) as well as to those he had no professional relationship with. The gifts ranged from soaps, flowers and perfume, to Louis Vuitton goods, international travel, accommodation and money. He also funded QHealth Finance Branch social functions. Some gifts were solicited by staff and others were unsolicited.

In September, Barlow paid $1700 towards flights for a QHealth officer.  In October, the officer asked Barlow for money for his holiday and in November Barlow transferred $10,000 to the officer’s bank account.

On 1 November, Barlow hosted and paid for a Christmas function at a Fortitude Valley bar which was attended by some QHealth staff. The party is estimated to have cost $25,000.

On 11 and 23 November, fraudulent payments were made to HIC, each of $137,592.40.

In about December 2010, Barlow paid for Finance Officer 1 and his fiancée to stay in an upmarket hotel in Hong Kong for two nights, and for a flight from Barcelona to Athens for Finance Officer 2.

In December, four fraudulent payments were made to HIC, each of $137,592.40. Three payments were made on 3 December 2010, the week before Barlow moved to the role of Manager, Governance, with two of these payments described as advance payments for January and February 2011.

On 6 December, Barlow was given higher duties to act at an AO8 level in the position of Manager, Governance, Finance Branch. He was actively seconded to this position by Manager 4, who became his direct supervisor in the new position. Finance Officer 3 relieved in Barlow’s substantive position.

As Manager, Governance, Barlow’s delegation limit was $10,000 for both recurrent and non-recurrent payments. However, each of the GPVs he signed using this position title exceeded this amount.

After Barlow was seconded to the Manager, Governance role, his signature block up to March 2011 read “Manager, Governance and Manager, Community Services Purchasing Grants (CSP GRANTS) BAM,Finance Branch”, despite the fact that he was no longer attached to the CSP team and the position of “Manager, CSP Grants” did not exist.

He also tried to remain involved in decisions relating to the CSP team. Eventually (in February 2011) Manager 3 told Barlow he was no longer part of the work unit and queried his continuing involvement. Barlow stopped using his dual-title signature block on emails to Manager 3 but continued to use it in emails to all other staff until 1 March, when he amended his signature block to read “Manager, Governance”.

On 23 December, Barlow paid a deposit on a waterfront property in New Farm, Brisbane, valued at $5.65 million.

By the end of 2010, Barlow had defrauded QHealth of $2,889,440.40 over the 12 months, with a total of $4,369,298.38 having been defrauded since October 2007.

In January and February, four fraudulent payments were made to HIC totalling $770,369.60.  Two payments made on 14 February were for “flood relief”, which appear to be an exploitation of the Queensland flood crisis.

In January, he paid for flights for a QHealth officer from Frankfurt to New York as well as five nights accommodation in an upmarket hotel in New York City. When he returned from his holiday, the officer asked Barlow for money for his mortgage repayment. Barlow gave him $1300 cash.

In January 2011, QHealth finalised the October 2007 complaint about Barlow’s unauthorised use of an official vehicle. The allegations were substantiated. QHealth found that he had failed to return an official vehicle and used it over a weekend without authority; that he had travelled about 213 kilometres and incurred a speeding fine; and that he then falsified a log book entry to cover up his misuse.

Barlow was reprimanded by an Executive Director.  Manager 1, who had been Barlow’s supervisor at the time of the conduct, was given a brief summary of the outcome of the investigation.

Early in 2011, while Barlow was on leave, Finance Officer 3 dealt with some MGIA requests and set up an in-tray for the related correspondence. When Barlow returned from leave in about February, Finance Officer 3 noticed that this tray was missing. Finance Officer 1 told him that Barlow had taken it back. When Finance Officer 3 raised the issue with Barlow, Barlow said he was responsible for the MGIA. Finance Officer 3 took no further action in relation to the issue and Barlow retained responsibility for the MGIA cost centre until his frauds were discovered in December.

An internal audit of corporate credit cards had commenced in December 2010. Barlow was one of the cardholders chosen at random and the audit identified the following issues with his credit card usage:

  • numerous instances of transactions exceeding his $1000 limit
  • apparent payment “splitting”, where a payment exceeding the $1000 limit was split into multiple transactions, each under the $1000 limit
  • a number of payments deemed to be suspicious due to the nature of the expenditure.

Between 9 December 2010 and February 2011, QHealth Internal Audit liaised with Manager 4 and his staff, unsuccessfully seeking documents related to Barlow’s suspicious credit card transactions.

On 17 February, QHealth Internal Audit reported their concerns about Barlow’s corporate credit card transactions and his failure to provide supporting documentation. The allegations (referring to Barlow under the name Hohepa Morehu-Barlow) were reported to the CMC on 21 February and the CMC referred the matter to QHealth to deal with.

The ESU began its own investigation, interviewing Manager 1, Barlow’s supervisor at the relevant time, in relation to the transactions in question. Manager 1 gave them what information he could, such as the types of documentation that would be expected to accompany the transactions, and undertook to retrieve some of the relevant paperwork which had been archived.

ESU investigators were satisfied with Manager 1’s responses and returned the matter to Internal Audit to review the documents to be provided by Manager 1 and to provide the ESU with a further report.

On 21 June 2011, Internal Audit provided a report to the ESU. In relation to the suspicious purchases, Internal Audit found that, where documents were supplied, the documents indicated on face value
that the transactions were of an official nature. However, Manager 1 had difficulty locating all the documents and not all the requested source documentation had been provided. Given this and the uncertainty about whether QHealth actually used one of the vendors, Internal Audit recommended the matter be referred back to the ESU to determine whether any action should be taken.

In relation to the payment “splitting”, Internal Audit found that Barlow breached the FMPM and recommended that Barlow’s use of the card to make split payments be referred to management to
deal with.

It appears that no further action was taken by QHealth regarding this matter prior to Barlow’s frauds being discovered.

Some time before July 2011, the Queensland Audit Office conducted a routine audit of QHealth expenditure transactions, including a sample of 25 grant transactions. The audit sample included one of Barlow’s fraudulent payments to HIC. As a result, the QAO sought further documentation and a response from QHealth.

Barlow told the CMC that, when he became aware the audit included one of his fraudulent transactions, he felt sick and thought “the game was over”. He went on sick leave for a couple of days so he “didn’t have to explain it” and was unavailable to produce the documents being requested.

Despite repeated requests for outstanding documentation it was not provided.

The QAO wrote to QHealth regarding the findings and outcome of the audit, identifying the following issues with the HIC payment:

  • QHealth had not provided documentation regarding a signed Service Level Agreement or contract with the client to reflect the original approval for funding
  • QHealth had not provided documentation to verify whether the grant recipient (HIC) was being monitored to ensure the terms of the Grant Agreement was being adhered to
  • the expenditure approved by Barlow exceeded his delegated authority of $10,000.

The QAO also provided an overall risk rating relating to state-wide grants expenditure as “Low”; addressed the identified control breakdowns and their implications; and made recommendations about internal control measures relating to grant payments.

The Senior Executive’s response to the QAO on 29 August 2011 acknowledged the need for improvement:

The Director, Community Services Unit will review the provision of grants to better ensure consistency of process across the organisation. The requirements will then be communicated across the Divisions and Districts.

Staff at various levels continued to have concerns about Barlow’s conduct and performance after he was moved into the Manager, Governance role.

  • The Senior Executive said that a number of Barlow’s executive-level briefing notes were of poor quality, contained grammatical errors and overall inaccuracies, and had to be returned several times for correction. The Senior Executive thought Barlow was incompetent at his job, and that his attendance at work at much later hours than other staff was intolerable. He also believed Barlow was receiving favourable treatment from Manager 4, but did not raise this issue with Manager 4.
  • The Senior Executive and another officer said they spoke to Manager 4 about the poor quality of Barlow’s briefs, his poor attendance, general frustrations with the timeliness of his work, and his inability to undertake the role of Manager, Governance.
  • When the Senior Executive was advised Barlow was travelling to England to attend the royal wedding, he asked an officer to research Barlow’s claim to royal lineage. The officer reported back that he had done some research and confirmed that Barlow was Tahitian royalty. After Barlow’s frauds were discovered, the officer advised that he had not been able to find anything on the internet to confirm Barlow’s claims and so had relied on information provided by his co-workers in the Finance Branch.
  • The Senior Executive told CMC investigators he “often got annoyed that employees would regularly accept gifts” from Barlow, although he also said he was not aware of the full extent of the gift giving. In mid-2011, the Senior Executive said he spoke to the Senior Director about his concerns with staff being compromised by accepting gifts from Barlow but did nothing further to enforce appropriate workforce behaviours by Barlow. The Senior Director said he was not discouraged by senior managers, including Manager 4 and the Senior Executive, from accepting gifts from Barlow.
  • Another officer said dealing with Barlow was very frustrating as he did not meet deadlines, provided incorrect information, had no clear understanding of what was required, and would often arrive late to work. The officer continually had to fix Barlow’s work or follow up with others, so he began to bypass Barlow and speak directly with the senior management teams for information.
  • An officer who had known Barlow since 2004 returned from extended leave and said he became aware of Barlow’s “royal heritage”. He spoke to Barlow about the apparent change in his circumstances and Barlow said his trust fund had “kicked in”.
  • An officer said that, while Barlow was in the Manager, Governance role, he would attend work anywhere from 10 am to midday. Barlow’s excuses for the late starts included waiting for tradesmen, personal training sessions and that he was working from home. The officer would brief Manager 4 when Barlow was going to be late. He said Barlow’s regular absences and tardiness in attending to correspondence adversely impacted on his ability to meet deadlines, so he started bypassing Barlow and going directly to the relevant senior officer for the required information
    or signature.
  • An officer who began to work with Barlow in mid-2011 said that Barlow would arrive at work at about 11.30 am or midday each day, and everyone seemed to laugh it off because “it was Ho”.

Notwithstanding all the concerns or dissatisfaction with Barlow being expressed at every level, the managers at QHealth, rather than performance-manage him, appeared to reward his poor behaviour. For example, one officer said he was told Barlow was allowed to come into work late so he could write his royal correspondence in the mornings. Also, to make Barlow more easily contactable, in June he was provided with a QHealth Blackberry smartphone. Manager 4 and the Senior Executive approved his application for the Blackberry.

Barlow’s absence from the workplace increased when he moved into the Manager, Governance role.

He was absent from work for over a quarter of the year in which he acted in the position (28 per cent of the time), taking 11 days of recreation leave and 62 days of other leave in the twelve-month period.

In a meeting between Manager 3, Finance Officer 1 and another finance officer around August, the finance officer told Manager 3 that he had questioned Barlow about the regular payments made to HIC from the MGIA cost centre and Barlow had advised that the contract was about to end and it would no longer be an issue.

On 20 September, Barlow authorised a fraudulent payment of $137,592.40 to HIC from the MGIA cost centre.

In October 2011, Manager 3 attended the Rugby World Cup in New Zealand after receiving four “platinum” level tickets from Barlow worth several thousand dollars.

On 16 November, Barlow sent the SSP Officer an “urgent” GPV for payment from the MGIA to HIC of $11 million, related to the establishment of a dental school at a university. Barlow later admitted to altering the legitimate Capital Funding Agreement relating to the dental school.

Barlow said that when he prepared the GPV and approached the Senior Executive to sign the form “I got him purposely in a fleeting moment when he was in a hurry”. The Senior Executive denies signing the GPV and has said the signature on the GPV is not his. The SSP Officer processed the payment.

On 22 November, Barlow finalised the purchase of a property in New Farm, Brisbane for $5.65 million.

The $11 million payment was the final fraudulent payment made to HIC. Barlow told CMC investigators:

I was tired of living a double [life] you know [being] His Royal Highness … so I prepared an $11 million dollar payment I’ve sent it to my … own staff … who I’ve trained … to check through [documents] … [Finance Officer 3] would have checked the ABN seen it was registered to me and then … you know the game’s up … I’m glad my staff picked it up.

Over the 12 months of 2011, Barlow had defrauded QHealth of $12,320,739.20, with a total of $16,690,037.58 gained since his fraud began in October 2007. When asked how he kept track of how much money he was taking from QHealth, Barlow replied “I didn’t, if I ran out of money I’d submit another invoice”.

On 8 December, Finance Officer 3 received a copy of the November spreadsheet for CSP grants to provide commentary on the cost centres he was responsible for. While trying to determine why his budget was significantly overspent, Finance Officer 3 identified the $11 million payment made from the MGIA cost centre to HIC. He made some inquiries in relation to the payment, including seeking advice from a superior officer and requesting a copy of the GPV. He also searched for HIC in the Australian Business Register and discovered that the trading name HIC was registered to Barlow.

He and his supervisor then gathered the relevant paperwork and raised the matter with Manager 4.

Barlow told the CMC that he’d come in about midday that day. Checking his meetings later in the afternoon, he realised that Manager 4 should have been at the payroll meeting but that he’d been called over urgently to Finance Officer 3’s area.

So I knew then that [Finance Officer 3] had done [his] job properly … That’s when I realised that my electronic access had been cut, my blackberry was wiped …

It was the afternoon so I said to [his assistant] that I was going to get something to eat … and left the building and went home.

Later that day, QHealth made a complaint to the QPS, which commenced its investigation into Barlow’s activities.

***

In March 2013, the fake Tahitian prince was sentence to 14 years in jail with a non-parole period of five years.

The CMC report briefly noted the weaknesses that allowed this fraud to be committed:

Barlow admitted he actively intended to defraud QHealth. However, the frauds could not have succeeded or continued for so long if it were not for a range of factors within QHealth itself. These included:

  1. low levels of compliance with existing policy and procedures by other staff
  2. failures of financial management and accountability
  3. failures in supervision and management
  4. inadequate change management processes that failed to identify risk and failed to provide an effective follow-up review process
  5. low awareness of the risk of fraud among staff at all levels
  6. failure to properly investigate information provided in audits and complaints and evaluate it in a wider context.

It was this aggregation of factors that exposed QHealth to a long-term and continuing fraud. To some extent they overlapped, demonstrating their interdependence.

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