While politicians spar over ways to increase tax without enraging voters, extraordinary details have emerged of how easy it is to make taxpayers’ money disappear.

Over three months in 2011, a group of civilians used cards belonging to the Australian Defence Force to buy fuel worth $585,000.

Despite the massive scale of the theft, the bills were paid when they arrived at Defence and the spending spree was discovered only when a Defence Department supervisor returned from a long holiday and went through the paperwork.

It is still not clear how the gang managed to buy, fraudulently, enough petrol or diesel to circumnavigate the nation many times.

The executive in charge of Defence’s fraud control division, Geoffrey Brown, told a Senate estimates committee hearing last month the theft was carried out on what was “almost on a commercial scale”.

The two cards were left by accident in a minibus when Defence sold it at an auction in 2011.

Shortly afterwards, the fuel started flowing and the bills went back to the department.

An incredulous South Australian Labor senator Alex Gallacher asked if the cards were protected by a PIN. “Are you telling me that someone was able to get hold of one of your cards and spend half a million?” Senator Gallacher said. “How do you pay your bills? Who ticked off on that expenditure?”

Mr Brown said he would find out and report back. “You are quite right to raise those concerns,” he said.

This week, Defence responded that the cards were not protected by PINs, nor were they restricted to a particular fuel type or a specific vehicle. That had since been rectified to avoid a repeat of the thefts, Defence said.

“This occurred as a result of a breakdown in the controls framework operating in 2011 across fuel card management, administration, usage and acquittal,” it said.

As well, a system was now in place to ensure fuel cards were removed when vehicles were sold.

A Defence Force spokeswoman said yesterday that when the theft was discovered, NSW Police was called in and ultimately four people were charged with 228 offences involving obtaining financial advantage by deception and failing to disclose the identity of the driver of a vehicle at a time when an offence was committed. Initially the case was heard in Liverpool Local Court but it was moved to Sydney Local Court. Two of those charged were convicted but there was insufficient evidence to convict the others.

Those charged were not connected with the ADF or the Defence Department, the spokeswoman said. One of those found guilty was ordered by a magistrate to perform 150 hours of community service and to repay $11,426.46. The other was put on a good behaviour bond for 18 months with a $500 surety and told to repay $889.58.

Extracted in full from:  theaustralian.com.au