EXCLUSIVE: A major fraud case involving the alleged rorting of taxpayer funds has been stalled in court for nearly three years due to a delay in a pre-trial decision by Justice Stephen Southwood, who is now expected to move on the matter by the end of the month, after the NT Independent raised the issue with the NT Chief Justice.

It can also be revealed that the Office of the Director of Public Prosecutions inexplicably failed to raise any issues about the massive delay in bringing the high-profile trial to court.

Alice Springs-based MPH Carpenters and Constructions and its operations manager were charged in April 2018 for allegedly defrauding the government’s Indigenous Employment Provisional Sum scheme of more than $220,000.

In September 2019, lawyers for the accused sought a decision to have the charges quashed or, alternatively, for the DPP to provide “proper particulars of the charges”.

The court also heard an application at that time by the Crown to have the trial moved from Alice Springs to Darwin, where prosecutors alleged the company’s manager deceived bureaucrats into paying money to the company it was not entitled to receive.

However, a court spokesman told the NT Independent yesterday, in response to questions, that “the decision was reserved following a hearing and has yet to be delivered”.

“Although neither party has made a complaint to the Court in relation to the matter, the delay in the delivery of the decision in this case does not comply with the general expectation notwithstanding the high caseloads which all Supreme Court Judges carry,” the spokesman said in an email.

“The matter has been brought to Justice Southwood’s attention, and it is anticipated that a decision will be handed down before the end of this month.”

Current Director of Public Prosecutions Lloyd Babb did not respond to a question about why his office did not raise any concerns with the courts over the long delay.

IEPS largest known fraud ever perpetrated in the NT, figures show

The Indigenous Employment Provisional Sum (IEPS) scheme is reportedly the largest known fraud ever committed in the Northern Territory, with local construction companies alleged to have rorted the program of tens of millions of dollars, the Auditor General had found.

The program was established in 2014 to incentivise non-Indigenous businesses to hire Indigenous Territorians but was shut down in August 2017 amid widespread fraud allegations, that included allegations some companies had submitted false Indigenous employment records.

In April 2019, small-time contractor Timothy Schwab, director of Timber and Steel Constructions, pleaded guilty to defrauding the scheme of $213,000 and was sentenced to four years jail.

He remains the only person convicted of swindling the taxpayer-funded scheme, which the Auditor General also found was not properly implemented by the government, did not have proper oversight, and lacked proper guidelines.

The Department of Infrastructure, Planning and Logistics was criticised in another Auditor General’s report for not properly ascertaining the validity of claims being made by contractors of Indigenous employment numbers which added up to more than $100 million of taxpayer money.

The charges against MPH Constructions, now known as MPH Projects, and its manager have not been proven in court and they are expected to contest the charges when the case returns after the nearly three-year delay.

The ABC reported in late 2018 that three of the NT’s largest construction companies received more than $10 million through the program, including Halikos Group, Sunbuild and Probuild NT.

Halikos Group refused to answer questions at the time, but said in a statement that it had managed its government contracts “in strict accordance with the respective contractual requirements, including the reporting required for the IEPS”.

Sunbuild also said it followed IEPS reporting guidelines. Probuild NT did not respond to questions back in 2018, when it was revealed the company had claimed an estimated $8 million through the IEPS program.

None of the larger companies involved were pursued by prosecutors and the department’s internal investigation was found to have been flawed by the Auditor General, including that “resources allocated to the verification of past claims against the IEPS are not sufficient and the opportunity … to recover overpayments in a timely manner will be negatively impacted”.

Last week, the Fyles Government announced a new version of the controversial program, now called the Aboriginal Economic Partnership Framework, while millions of taxpayer dollars remain outstanding from the IEPS program and the full extent of the alleged fraudulent claims unknown.