Employee Ombudsman arrested and charged with $180,000 fraud

The Employee Ombudsman in South Australia was arrested last week and charged with 67 counts of fraud allegedly committed while he was a union boss.

Stephen Brennan has been charged with over 35 counts of falsifying accounts and 32 counts of dishonestly dealing with documents during his time as the South Australian and Tasmanian branch secretary for the Textile, Clothing and Footwear Union.

South Australia Police confirm Brennan was arrested by detectives from its Commercial and Electronic Crime Branch.

The investigation into Brennan began when the Fair Work Commission received a complaint about his conduct.

The Fair Work Commission began an investigation into whether Brennan was in breach of the Registered Organisations Act and referred the alleged criminal breaches to the South Australia Police.

The Australian reports police made the arrest after the union reported up to $180,000 had been defrauded from members

A spokeswoman for the Fair Work Commission told SmartCompany its investigation into potential civil charges are ongoing.

“We did originally contact the South Australia Police and suggested they investigate this matter, we have been making sure to have a coordinated approach with them,” she says.    

“We are focusing on financial reporting and the appropriate use of members’ money, the police are looking at the fraud element.”

The Australian reports the South Australian Labour government appointed Brennan to the role of Employee Ombudsman on $140,000 a year in 2006 when his term with the textile union concluded.

Brennan stood down from his position in May last year, pending the outcome of the police and Fair Work Commission investigations, but continues to be paid his salary.

Once the Attorney-General’s department was informed Brennan was being charged with serious criminal offences, the Attorney-General wrote to Brennan asking that he show cause as to why he should not be suspended from duty.

Brennan has until March 13 to respond and the Attorney-General’s department informed SmartCompany the Employee Ombudsman cannot be suspended without pay or be forced to take leave without pay.

Brennan is appointed under the Fair Work Act 1994. Under the Act, the Employee Ombudsman may only be removed from office on grounds of misconduct by the governor following a motion by both houses of parliament recommending his removal from office.    

He has been bailed and will appear in the Adelaide Magistrates Court on 30 April 2014.

The Employee Ombudsman’s office declined to comment and SmartCompany was unable to contact Brennan.