ACCC takes action against visa fraud

ACCC takes action against visa fraud

 

ACCC v Clinica Internationale Pty Ltd [1]

The Australian Competition and Consumer Commission (ACCC) has won a legal battle against Clinica International Pty Ltd (Clinica) and Mr Radovan Laski for contraventions of the Competition and Consumer Act associated with false and misleading advertisements and offers of sponsored employment in regional Australia to foreign workers.

Clinica International is a Melbourne-based cleaning company owned and managed by Mr  Laski.

Advertisement: “The Quick and Easy Way to get P.R.”

The Clinica advertisements claimed that:

  • Clinica would enrol the applicant in a cleaning course “Certificate III Asset Maintenance (Cleaning Operations)”;
  • Clinica would find for the applicant a cleaning job in a regional area of Australia;
  • Clinica would engage a migration agent in relation to a permanent residence visa application and other immigration advice for the applicant; and
  • Completion of the cleaning course and working in the cleaning job would qualify the client for permanent residence under the Subclass 187 visa – Regional Sponsored Migration Scheme (187 Visa).

Applicants would be charged between $30,000 to $40,000 to participate in the scheme. During the life of the scheme, at least 97 Indian workers paid Clinica a combined total of $800,000 in return for a promised 187 Visa.

However, the cleaning course and cleaning work offered by Clinica could never have entitled the applicants to apply for a 187 Visa. Moreover, Clinica and its managing director, Mr Radovan Laski, admitted during the trial that Clinica did not have any cleaning jobs available for applicants with sponsoring employers in regional areas.

No applicants who completed a cleaning course with Clinica were placed in cleaning jobs. Workers were instead placed in unskilled abattoir jobs.

One victim stated in his evidence:

“To my horror, the work did not involve cleaning… I was working very close to the animals being slaughtered. I am a Hindu and have been a vegetarian all my life. My experience at [the abattoir] was scary and I was very emotional and upset… No matter how much money I had spent and how much I wanted the permanent residency visa, I could not stand by observing the slaughter of animals.”

The Department of Immigration gave evidence in the proceedings, a signal of growing cooperation and collaboration between government agencies to combat exploitation of foreign workers.

Court Findings

The Federal Court judge found that the representations Clinica made in its advertisements were false or misleading because there were no jobs available that would qualify clients for permanent residency. Also, the cleaning jobs were not sufficiently skilled to have led to permanent residence.

The Court also found that the conduct was unconscionable. Despite knowing that no jobs were available, Clinica and Mr Laski did not stop advertising and marketing the program, nor signing on new clients or pressing existing clients for payment. Also, the Court found that clients who signed up to the scheme were exposed to “harsh” fees of $5000 if they withdrew from the scheme despite the company’s knowledge of the unavailability of jobs and the lack of certainty about the path to permanent residence.  Mr Laski also threatened workers he would initiate court action or contact the Department of Immigration to cancel their visas if they did not pay the money they had agreed to.

“The way Clinica and Mr Laski preyed on the dreams of people about obtaining secure and long-term residency and employment in Australia, is one of the features of this scheme most deserving of the court’s condemnation,” said the Judge.

Significant Penalties

The Court found that there were aggravated circumstances relating to the conduct of Clinica and Mr Laski:

“The scheme took advantage of the vulnerable nature of the prospective clients, and their desperation to secure employment as a pathway to a visa, surpassed only by their desire for a visa. Clinica, and Mr Laski, promised them these things, in conduct which was calculated and systematic.”

As a result, the Court imposed the following sanctions:

  • A fine of $700,000 against Clinica, for false and misleading conduct and unconscionable conduct; and
  • A fine of $325,000 against Mr Laskim, for false representations and unconscionable conduct.
  • Restitution of $800,000, be paid back to the workers.
  • A ban on Mr Laski from serving as a director of any company for 5 years.

What we can learn

This case demonstrates the willingness of the competition and consumer regulator, the ACCC, to investigate and take legal action against employers engaging in visa fraud activity where the conduct breaches the Australian consumer law.

It is important to remember that Australian consumer law governs the conduct of Australian businesses towards not only Australians but also foreign nationals, including matters related recruitment and migration of foreign workers to Australia. Businesses found to be engaging in false or misleading or unconscionable conduct in the course of recruitment or sponsorship of foreign workers may be held liable under the Competition and Consumer Act.

The penalty regime under the Competition and Consumer Act is more onerous than the penalties available under fair work or immigration laws and can be applied IN ADDITION TO legal action and penalties available under the other laws.

The maximum penalty for false or misleading and unconscionable conduct is:

  • $1.1m for corporations
  • $220,000 for individuals (directors or senior representatives)

The ACCC can also issue infringement notices for false or misleading conduct of:

  • $10,800 for a corporation (or $108 000 for a listed corporation) and
  • $2,160 for an individual (directors or senior representatives)

Businesses should also be aware that receiving payment or any other benefit in exchange for providing sponsorship is prohibited under the new Migration Amendment (Charging for a Migration Outcome) Act. It is a criminal and civil offense for a sponsor, recruiter or other third party to ask for or receive a benefit for sponsorship. Prison time and fines of up to $64,000 for an individual or $324,000 for company apply.

Next Steps

Is your business compliant? The Migration Agency can assist your business with immigration “health checks”, auditing and monitoring, and develop auditable compliance program to ensure you have the policies, systems and processes for legal compliance.

Call us on (02) 8896 6056 or email info@themigrationagency.com.au to arrange a confidential discussion.

 

 

[1] Australian Competition and Consumer Commission v Clinica Internationale Pty Ltd (No 2) [2016] FCA.

A copy of the judgement can be accessed here: http://www.judgments.fedcourt.gov.au/judgments/Judgments/fca/single/2016/2016fca0062

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