A charity hit by a $1.8 million fraud has told of the devastating backlash it suffered, including a massive staff exodus, financial struggles and ridicule from supporters, after its former general manager was exposed as the fraudster.
Surf Life Saving NSW became engulfed in the biggest scandal in its 114-year history after Matthew Hanks resigned from his $200,000 a year position when colleagues blew the whistle on his dodgy dealings.
Police arrested the 52-year-old in 2019 and after admitting he scammed a total of $1,839,845 from SLS NSW.
Hanks pleaded guilty to six fraud charges last year.
The NSW District Court has been told Hanks used numerous methods to fraudulently obtain the money, including by secretly selling SLS NSW cars to himself at a wholesale price and then selling the vehicles to private buyers at a higher price.
Without disclosing a potential conflict of interest, Hanks also started a business called See Hear Speak, which SLS NSW paid to do printing work Hanks was secretly subcontracting out to cheaper providers in order to pocket the difference.
In court on Thursday, SLS NSW board member Anthony Waller said the fraud created a “tsunami effect” which was still being felt today by everyone associated with the organisation.
“His actions bought the entire staff cohort into disrepute with the volunteer membership, the board and even within the staffing ranks,” Mr Waller said in a victim impact statement.
“The culture of the workforce changed immediately from one of collegiality, camaraderie and trust to one of distrust and innuendo.
“There has been significant business disruption in redirection of key staff away from their positional functions of supporting the volunteers, to that of attempting to recover documents and evidence required to unravel the complex fraud … many key projects that were underway to be delivered for the volunteer membership were required to be cancelled or postponed to redirect staff, energy and focus on supporting the investigation.”
Mr Waller told the court Hanks’ fraud triggered a public backlash against SLS NSW and he suggested it could have possibly led to a loss of donors or volunteers.
“This backlash consisted of both public demands for all staff to be sacked, regardless of their non-association with this fraud,” he said.
“I’m advised there were many cases where volunteers would be subject to ridicule by members of the public about the waste of moneys that they had donated to the organisation to support surf life saving.
“This enormous fraud is now indelibly chiselled into the social media search engines when referencing SLS NSW and there is only qualitative assumptions the organisation can make on how many potentially new valuable corporate partners have withdrawn interest in partnering with SLS NSW due to this scathing account.”
The court heard Hanks’ fraud led the NSW Government and the Australian Charities and Not-For-Profits Commission to query governance processes at SLS NSW.
“Many staff reported significant psychological, emotional and anxiety stress brought on by the confronting police investigation and questioning,” Mr Waller said.
After Mr Waller finished reading the statement, Judge John Pickering said he was “troubled” by parts of it and found other aspects of it “a little misleading”.
“Every dollar does not actually go to volunteers, there’s a significant budget in running the operation.
“I accept SLS NSW don’t seem to accept there were any issues in relation to their governance, I don’t necessarily accept that. It seems to me there were quite a number of slack systems that Mr Hanks was able to easily exploit.”
Judge Pickering said while Hanks’ actions were inexcusable, it seemed “a little unrealistic” to suggest they had stopped people from supporting SLS NSW.
“I doubt that if I walked along Bondi Beach that I would find a single person on the beach who’d ever heard of Matthew Hanks,” Judge Pickering said.
“What they see are the amazing people of surf life saving working there at Bondi and they’re happy to donate to it. Unfortunately all organisations both non-profit and profit ones are sometimes defrauded … it doesn’t automatically mean that you completely lose utter respect for the entire organisation and the people who work there.
“Mr Hanks may or may not have appeared on a television show or the newspaper, but people have got a lot of other things in their life to do than have some long term memory of whether Mr Hanks committed a fraud there in 2016 … I just find it hard to believe that he is at the forefront of peoples thoughts when they are thinking about this organisation.”
When Judge Pickering questioned if some of the money Hanks took had been repaid, the court heard about $600,000 had been repaid and that civil proceedings, which SLS NSW launched to recoup the funds, led to a settlement of $1 million being reached.
After Hanks was called to give evidence for the last time he told the court he was unemployed and living on the south coast in constant fear.
“I get up and I breathe and I eat, I don’t sleep much,” Hanks said.
“I owe money to my family for the house I’m living in and my legal expenses and some day to day things they’ve been assisting me with.
“I’ve been sitting in the street and I’m sure people are taking photos of me, I’m not sure if they are or not.”
Hanks said media coverage and social media comments about his case had been distressing to read, with people posting remarks like “I hope he drowns”.
“I stopped reading them, just for my own mental health,” he said.
“I regret so much of what happened.
“I know I can’t go back and change it and it’s something you can’t make up. Simply being remorseful doesn’t seem enough.”
Hanks said after undertaking a Graduate Certificate in Counselling he was now focused on obtaining a new career in the mental health sector.
“That’s been really beneficial for me in trying to maintain some stability,” he told the court.
“Ideally I’d like to go down that path and complete the study and work in that field.”
Judge Pickering reserved his judgement in the case and will sentence Hanks on February 18.
