“Bogus” Businessman Stripped of Charity Status
11 June 2015 at 11:31 am
A charity linked to a man who has been banned from running businesses for 15 years and fined $450,000 has finally been shut down by the charity regulator, the ACNC.
The Mature Age Group Charity Association has been stripped of its charity status after more than two years of investigations and court actions by Government consumers organisations.
The ACNC has deregistered the charity set up by Victorian man and Heartlink company director, Laurence Hann, who was banned in 2012 by the Australian Competition and Consumer Commission (ACCC) for 15 years from managing a company in a landmark Federal Court judgement over an “egregious series” contraventions of competition and consumer law.
The ACCC said the 2012 judgement concerned “unscrupulous business practices which prey on disadvantaged or vulnerable consumers” in the promotion and sale of a parcel distribution business for 'Heartlink' branded household products, including the sale of goods for donation to charity.
Consumer Affairs Victoria also took court action over Hann’s activities, which it described as running a “bogus business opportunity which claimed to raise funds for charity”.
In 2009 Hann set up the charity known as the Mature Age Group Charity Association with a registered address in the small town of the Kalangadoo, near Mt Gambier in South Australia.
The owner of the property told Pro Bono Australia News she was asked to be the volunteer book keeper by the founder Laurie Hann who lived near Casterton in Victoria.
She said Hann and his wife made household cleaning products such as dishwashing liquid, oven cleaner and laundry detergent from their home and the profits from the sales were distributed to schools, aged care facilities and other charities.
She said the charity has had no money in its account for several of years and all those helping Laurie Hann were volunteers. She said she understood that Hann was in his 70s, was very sick and his wife was his carer.
ACCC chairman Rod Sims said the Federal Court decision in 2012 was the first time the ACCC had obtained orders from the Federal Court which disqualify an individual from managing companies.
In handing down the $450,000 civil pecuniary penalty against Hann, Federal Court Justice Richard Tracey said "I consider his conduct to constitute an egregious series of contraventions of legislation designed to protect consumers. He well knew what he was doing was wrong but he still persisted."
"There can be no doubt that Mr Hann's conduct was deliberate.
"The fact that they (his victims) had been cynically exploited did not deter Mr Hann from continuing his attempts to attract further investors who, I readily infer, would have been destined to lose their money."
Justice Tracey also imposed injunctions against Hann for 15 years which prevent him from carrying on a business or supplying goods or services in connection with which:
persons are invited to invest money or perform work
any claim is made that moneys or profits earned by the sale of goods are donated to charity, or
goods or services concerned are or include household cleaning products.
"The conduct has resulted in substantial losses being sustained by people, many of them elderly, across Australia,” Justice Tracey said.
“Hann has a long history of establishing companies and other entities and using them to promote dubious business opportunities in order to obtain funds. He should not have the opportunity to do so again.”
According the ACNC’s website the charity indicated that it was engaged in aged care and rehabilitation activities.
The ACNC said the charity status of the Mature Age Group Charity Association was revoked on 5 June 2015 under section 35-10 of the of the Australian Charities and Not-for-profits Commission Act 2012 (ACNC Act) which points non compliance of governance standards or external conduct.
The charity was listed as having revenue of less than $250,000 and was operated by six volunteers.
The charity regulator has revoked eleven charities following compliance action since it was established in December 2012.
Commissioner Susan Pascoe AM said the ACNC takes a proportional approach to compliance activity.
“The ACNC has a range of regulatory powers at its disposal,” Pascoe said.
“This includes guidance and support, warnings, directions and enforceable undertakings. Where appropriate the ACNC will revoke an organisation’s status as a registered charity.”
The ACNC said it was prevented by secrecy provisions in the ACNC Act from disclosing the details of any case. Under the ACNC Act, decisions to use formal powers must usually be published on the ACNC Charity Register.
When a decision to revoke is made, charities are informed and provided with the reasons for revocation via both phone and mail. The charities then have 60 days to lodge an objection to this decision.
For more information about the ACNC’s compliance activity, visit acnc.gov.au/compliancedecisions.