Money laundering uncovered in Fremantle Ports
Front page feature for The Fremantle Herald, July 6, 2020
A FREMANTLE Ports manager and his wife are on the run in South Africa after a “sophisticated” fraud scheme at the harbour was uncovered.
Giacomo (Jack) Merolla, who looked after the port’s navigational aids and beacons, and his wife Daniela have been accused of setting up fake off-shore and Australian companies which acted as ‘middle men’ to cream off profits from legitimate port business.
Mr Merolla is facing 23 charges of corruption and 34 counts of money laundering, while Mrs Merolla, who worked as a bookkeeper in Doubleview, faces 24 counts of property laundering.
The alleged partners in crime are believed to have flown to South Africa in March, shortly after Mr Merolla was interviewed by WA’s Corruption and Crime Commission over discrepancies in Port accounts and subsequently suspended.
The pair left their two adult children behind; they faced court on Tuesday (June 30) over their alleged involvement in their parents’ scheme.
Paolo Merolla (23) was charged with seven counts of property laundering, and his 28-year-old sister, Tiziana Merolla facestwo counts of the same charge.
The Merollas were wrong in thinking they would get away with it by fleeing to South Africa says the head of the Police Financial Crimes Squad, Ken Foster.
“If the Merollas believe that being outside of the country is going to place them in a safe haven to avoid justice, they are mistaken.
“Our advice to them is to come home now and sort this mess out.”
Det Sen Sgt Foster says the Merolla children were aware of the origins of the funds, and used the money to buy and sell motor vehicles.
He found it “very disturbing” their parents had left them in Australia “to hold the candle”.
Describing the scheme as a “sophisticated, corrupt set up,” he says the family has “benefitted in excess of $1 million-dollars”, though police were still trying to follow the paper trail to determine the extent of the fraud.
Police executed three search warrants on a Perth storage facility and residences, seizing $70,000 in cash believed to have been ill-gotten gains.
The inquiry is investigating evidence dating back to 2014.
Fremantle Ports board chair Ross Love says a 2018 internal audit should have raised “red flags” when it found discrepancies in Mr Merolla’s accounts, but no action was taken
He says at the time, it was attributed to “overspending”, and there was no perceived evidence of criminality.
According to Mr Love, further suspicions were raised in December last year, which lead to a short internal investigation.
“To ensure this doesn’t happen again,” Mr Love says Fremantle Ports is “undertaking a series of changes to our procurement processes and systems.
I want to be clear that we are fully accountable for addressing the issue”.
The Ports have since appointed a chief procurement officer, and installed new software designed to winkle out cheats.
Mr Love said employees of Fremantle Ports will “be horrified and feel betrayed,” but stressed it was an isolated event.
“There is no other evidence of other Fremantle Port employees being involved in these schemes,” he says.