ClubsNSW, the representative body for more than 1,000 clubs and pubs across Australia, has undertaken legal action against its former employee, Troy Stolz, for breaching his non-disclosure agreement.
The story broke out in February, when Independent MP Andrew Wilki, during a speech in Federal Parliament, accused 95% of clubs in New South Wales of illegal operations, by not complying with anti-money laundering /AML/and counter-terrorism financing /CTF/ laws.
Poker Machines Easy Targets
The MP said that the alarming information was provided to him by a whistleblower who sent him a 2019 ClubsNSW board paper that outlined how poker machines in the local clubs were being used for laundering large amounts of cash.
That whistleblower turned out to be Troy Stolz, a former ClubsNSW employee, whose job specifications involved advising and training staff from member clubs regarding the requirements related to money-laundering prevention, particularly around poker machines.
Stolz Bullied and Defamated
Last month, Troy Stolz, who had worked for 9 years as an anti-money laundering and counter-terrorism finance compliance auditor, filed an AU$2 million against ClubsNSW in Federal Circuit Court, alleging bullying, sham contracting, underpayment, defamation and other breaches of the Fair Work Act.
The 2019 ClubsNSW board paper that is now central to the lawsuit outlines the organization’s own concerns about poor levels of compliance within its member clubs.
“Current levels of AML/CTF (anti-money laundering/counter-terrorism financing) compliance are at best at 5-10 per cent for the approximately 770 clubs in NSW that are full reporting entities.”
Full reporting entities are clubs that have more than 15 poker machines. These venues pay around AU$30,000 per year for what’s called ClubSAFE premium membership and get the top AML/CTF training package included with its membership, while the smaller ones get only basic level training unless they pay for additional training courses. The board paper outlines the importance of making a financial profit out of its services, while ClubsNSW is a not-for-profit organization.
ClubsNSW Strikes Back
Troy Stolz is now alleged by his former employer that by acting as a source of information for MP Andrew Wilki, has violated the terms of the non-disclosure agreement signed when he was given the job for the organization. The chances for success in such a lawsuit are minimal as allegations face a centuries-long tradition that allows MPs to disclose information in Parliament from whistleblowers.
The Parliamentary Privileges Act can cover individuals who are not members of parliament if their actions are considered a part of parliamentary proceedings. And while the courts assessment how far the right to parliamentary privilege extends is difficult to predict, even if privilege is not granted, ClubsNSW’s lawsuit filed against Troy Stolz for violations of the Corporations Act has minimal chance to succeed.
Under the Corporations Act, whistleblowers are also protected, the law stipulating that a whistleblower is free from criminal prosecution, if the information disclosed is not false, and from civil litigation, such as a breach of a duty of confidentiality.