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Dual fraud trial: prosecution opens case against couple

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Former Dual Australia employee Josie Gonzalez and her husband Alvaro Gonzalez submitted more than 400 fraudulent invoices to con the underwriting agency out of $17.4 million, prosecutors claimed today.

The couple, appearing at the County Court of Victoria in Melbourne before Judge Paul Lacava, each deny 14 charges of obtaining a financial advantage by deception.

Prosecuting barrister Andrew Grant told the jury the couple had set up a company, Jaag Lawyers, shortly after Josie Gonzalez joined the Dual underwriting agency in November 2010. The invoices were then submitted for legal services, to be approved by Josie Gonzalez.

“Those purported services had not in fact been provided,” Mr Grant said. “[That] they weren’t entitled to payment is the prosecution’s case.”

The court was told Dual previously outsourced its claims management to Proclaim, where it had been predominantly handled by Josie Gonzalez.

She joined Dual as the company brought its claims handling function in-house, and the alleged fraud relates to invoices from March 2011 to mid 2013.

Mr Grant says the alleged deception was uncovered after Josie Gonzalez went on maternity leave in May 2013.

He says some funds were used by Alvaro Gonzalez to buy a $4.4 million house in the Melbourne suburb of Kew, and there was no mortgage on the property.

The prosecution alleges false invoices were attached to legitimate claims and were coded in spreadsheets so they indicated “counsel” services, rather than showing the company name.

Mr Grant says the couple signed a civil deed which assisted Dual in recovering $15.858 million – the total amount lost minus GST. He told the court the deed is “a pretty powerful piece of evidence in my submission”.

But defence barrister Alan Hands, for Josie Gonzalez, says the deed was signed “in the shadow” of a freeze order related to assets and bank accounts.

Mr Hands told the court the prosecution case relies on false premises, and also questioned whether Dual had a legal panel that it used at the time, suggesting it was on “an ad-hoc basis”.

Peter Kilduff, appearing for Alvaro Gonzalez, says his client believed all monies paid by Dual to Jaag were for the “legitimate provision of legal services”, and denies the civil proceedings deed contains admissions related to his conduct.

“Mr Gonzalez denies the prosecution’s allegation that Jaag Lawyers was established for the sole purpose of defrauding Dual,” Mr Kilduff said.

Dual Australia founder and Asia Pacific CEO Damien Coates told the court that before Josie Gonzalez was employed by Dual, she had suggested the company use a legal firm set up by her and her husband instead of Proclaim’s legal panel.

Mr Coates says he rejected that idea.

He also denied defence assertions that he had not raised conflict of interest concerns, and that he had told Josie Gonzalez he would allow the outsourcing of work to the firm she and her husband proposed setting up.

The trial continues.

By Wendy Pugh, at the County Court of Victoria