ClubsNSW claims former employee Troy Stolz “masquerading as a whistleblower” – by WBR think tank
- Kim Leighton
- Oct 14, 2022
- 4 min read
This is an extreme example of a whistleblower retaliation case in Australia in which judicial proceedings are used in an attempt to intimidate and discourage a lone whistleblower fighting a massive corporate entity.
It all started when Troy Stolz worked for the Registered Clubs Association of New South Wales (ClubsNSW) from 2011 until his resignation. Stolz claims constructive dismissal by way of severe bullying in 2019, and has also brought defamation proceedings. For eight years he had been their Head of Anti-Money Laundering and Counter-Terrorism Finance. The purpose of his position was to ensure that the use of casino or gambling money to finance crime and terrorist activities globally was avoided, or at least curtailed.
Stolz and ClubsNSW have been embroiled in litigation since April 2020, some of it ex parte and subject to suppression orders. The first publicized decision we found is by Justice Yates of the Federal Court of Australia dated November 17, 2021:
It’s an application for an interlocutory injunction to restrain (gag) him, and threatened him with contempt of court. Stolz had reported ClubsNSW’s failure to comply with anti-money laundering and counter-terrorism finance (AML/CTF) to Member of Parliament Andrew Wilkie, the Sydney Morning Herald (SMH), and the Australian Broadcasting Corporation (ABC). ClubsNSW claimed that in doing so, Stolz had breached the confidentiality provisions in his employment contract.
In common law, there can be no expectation of confidence in iniquity (wrongdoing), as suggested by the widespread and sustained non-compliance with AML/CTF laws by sports and veterans’ clubs equipped with Electronic Gaming (“pokies”) Machines, and Stolz’s disclosures were made in the context of reduction of corruption being in the public interest. However, the Federal Court ordered Stolz not to say any more, and ClubsNSW launched a private prosecution seeking a finding of contempt of court for disobeying that order.
Paragraph 160 says:
[160] It is true that Mr Stolz cannot be held responsible for what others—for example, journalists, commentators, and members of the general public—might choose to write or say about the proceedings. But the evidence suggests that he has actively sought to encourage this condemnation.
Contempt proceedings continue
Justice Yates declined an asset freezing order, not that it makes much difference because the multiple SLAPP proceedings including adverse cost orders have already forced the sale of Troy Stolz’s house so he could pay his legal fees. ClubsNSW’s contempt proceedings were allowed to continue.
In June 2022, a few months after Stolz lost his home, he received a devastating diagnosis of Stage 4 bone cancer and has been given about a year to live. There are studies that show that chronic stress can make cancer spread faster.
So, while battling cancer the stress of he was under continued as contempt proceedings commenced in August 2022. The suppression order became a moot point when it was discontinued because of the extensive reporting by major Australian media outlets. For example:
On September 23, comedian and journalist Jordan Shanks-Markovina pleaded not guilty to contempt of court in relation to his friendlyjordies publications while the suppression order was in effect.
Laundering method
In his disclosures to Wilkie, the ABC and SMH, Stolz alleged that 90-95% of clubs with pokies were failing to fully comply with AML/CFT laws.
As the laundering method is now widely publicized, we can say it entails having a smurf (money launderer) posing as a “punter”, placing a moderately large (eg: <$10,000) credit on a pokie machine, playing until a few percent of that credit is “lost” to the club (part of the accepted cost of laundering) then cashing in what’s left. A cashier’s docket accompanies the payment which can be provided to authorities, if necessary, as “evidence” that the “punter” was just lucky on the day. This alleged non-compliance was occurring on Stolz’s watch and he grew increasingly frustrated by senior management’s lack of support for his attempts to increase compliance. So, after he resigned (claiming constructive dismissal), and leaked a damning internal report to Wilkie and media, ClubsNSW sued him for breaching confidentiality.
We suspect that the seniority of Stolz’s position was compatible with receiving Protected Disclosures from junior staff through a formal internal process, but not making them. Justin Field, NSW Lower House MLC, told ABC that Stolz is a whistleblower (which means he should have been protected from retaliation under the relevant Act) while ClubsNSW accused him of “masquerading as a whistleblower”.
Media blowout
In a victory of sorts, on August 26, 2022 Justice Yates ruled:
[85] In light of these considerations, I am of the view that the interests of open justice are paramount in this case and that the order that ClubsNSW seeks under s 37AF of the Act is not necessary to prevent prejudice to the proper administration of justice. ([ClubsNSW sought an order] prohibiting publication or other disclosure of an interlocutory application and other documents – whether the order is necessary to prevent prejudice to the proper administration of justice...)
Inevitably, at least one editorial says ClubsNSW has “lost its moral compass” over pokies.
And we are willing to bet (if that’s the right word) there’s plenty more where that came from, because the NSW Crimes Commission is investigating. Brace yourself, ClubsNSW CEO Josh Landis!
This article was jointly composed by a think tank (so new it doesn’t have a name yet!) with knowledge of whistleblower retaliation (WBR). Its members are in the United States, United Kingdom, France, Canada and New Zealand.
Comments