PORT MORESBY, Jan 21, 2021, The Guardian. An Australian lawyer, Greg Sheppard, has been arrested in Port Moresby over an alleged 268m kina (A$96m) fraud involving trust funds from the controversial Ok Tedi mine in Papua New Guinea, The Guardian reported.
Sheppard, a former Queensland crown prosecutor, was arrested in Port Moresby on Thursday and charged with two counts of conspiracy and two of false pretence over the alleged defrauding of a fund established to assist impoverished communities in PNG’s Western Province.
He was taken into custody in Boroko prison in the capital, before later being released on 3,000 kina bail.
Police allege 268m kina was misappropriated from the Western Province People’s Dividends Community Mine Continuation Agreement (WPPD CMCA) trust fund and improperly paid into the accounts of the Ok Tedi Fly River Development Foundation and Sheppard’s law firm.
The trust fund was established with profits from the Ok Tedi copper and gold mine to fund development projects, such as roads, schools and health clinics for villages in Western Province impacted by the mine.
But for years, residents of those villages, and politicians in Port Moresby, have complained that none of the money has ever reached Western Province, which remains one of the most impoverished regions in the country.
As far back as 2018, the then prime minister Peter O’Neill claimed that millions of kina belonging to the people of Western Province had been misappropriated.
“Those funds have never reached the people,” he said.
The police investigation began after a formal complaint from the South Fly MP, James Donal.
In a statement issued on Thursday, the PNG police commissioner, David Manning, said investigations were continuing and “other suspects will also be brought in for inquiry into their alleged involvement in committing the fraud”.
“The investigation remains ongoing and includes a detailed forensic investigation into … the expenditure of the 268m kina, which police will allege were not authorised by the trust … this includes forwarding proceeds from the 268m kina to personal bank accounts.”
Earlier this month, 45-year-old Edna Oai, from South Fly district in Western Province, was charged with 15 counts of false pretence, conspiracy and misappropriation over the alleged fraud.
Gregory James Sheppard, an Australian citizen, has practised law in PNG for more than three decades, and is a partner at Port Moresby law firm Young and Williams. Its website says Sheppard “has acted for a number of prominent clients in Papua New Guinea, including prime ministers, ministers of state and businessmen.”
Sheppard was also the manager of Brisbane indie-pop group, Sheppard, of which three of his children are members. The group had a number-one Australian hit single, Geronimo, and performed at the AFL grand final last October.
The Guardian has sought comment from Sheppard in Port Moresby.