Cash-for-visa Scheme - What penalties would visa sponsor face for taking benefits or payments from visa applicants? Visa Scams in Australia

Government corruption is a serious offence and needs to be dealt with accordingly. Daryl Maguire abused his position of power on more than one occasion, so why hasn't he faced any punishment?

The Alleged Cash-for-visa scheme involving Daryl Maguire

During the ICAC investigations in November 2020, it was alleged that former MP Mr Daryl Maguire may have been involved in a cash-for-visa scheme.

Also implicated in the alleged scheme are Ms Maggie Wang and Mr Phillip Elliott.

The scheme allegedly involved connecting visa applicants with business sponsors, taking payments from applicants and distributing these payments between the parties involved. In the hearings, Mr Maguire confirmed that cash was delivered to his office in parliament. The payments discussed in the hearings included a flat “training fee”, as well as repayment of the first 3 months of wages. It is raised that at least some of the visa applicants may not have begun work at the sponsoring businesses.

So far, no actions against Mr Maguire or his alleged associates have been reported.

A Brief History of Visa Scams in Australia

In March 2016, the “A National Disgrace: The Exploitation of Work Visa Holders” report was released. This addressed numerous ways in which a range of temporary visas were being exploited (including work and holiday visas, student visas and the 457 visas). Some of the exploitations and abuses related to Australian visas are:

1. Payment or benefit for sponsorship

Payments/benefits for sponsorship scams extend to situations where third parties, business people or persons fraudulently providing migration advice, offer to arrange visa sponsorship in exchange for large payments.

An example of this is Eddie Kang, who was convicted of 22 counts of fraud and misleading conduct in relation to promising students Australian visas and taking substantial payments from them.

Another is Teddy Junus, who falsely advertised himself as a migration agent and allegedly took very large amounts of money on the promise of arranging 457 visas.

2. Underpayment, no payment or repayment of wages

Another rort of the visa scam is where the employer underpays the sponsored worker, or does not pay the sponsored worker at all, or pays the sponsored worker, but then asks them to pay the money back again.

There have been a range of situations where this has been uncovered, include Abella Travel (penalised $398,520), Endota Spa, making unlawful deductions and very recently Fu Kang GC in the Gold Coast.

These actions are often pursued by the Fair Work Ombudsman in the same way as underpayment of Australian citizens and permanent residents.

Both of the above are relevant to the allegations discussed in the ICAC investigation.

An earlier review into the integrity of the 457 visa programme published in September 2014, had highlighted the issues of payment for sponsorship and proposed “sanctions including possible criminal sanctions”.

This led to s 245AR being added to the Migration Act in September 2015.

What are the requirements of s 245AR of the Migration Act that Daryl Maguire may face?

MIGRATION ACT 1958 - SECT 245AR
Prohibition on asking for or receiving a benefit in return for the occurrence of a sponsorship-related event
(1) A person (the first person ) contravenes this subsection if:

(a) the first person asks for, or receives, a benefit from another person; and

(b) the first person asks for, or receives, the benefit in return for the occurrence of a sponsorship-related event.

(2) To avoid doubt, the first person contravenes subsection (1) even if the sponsorship-related event does not occur.

(3) Subsection (1) does not apply if the benefit is a payment of a reasonable amount for a professional service that has been provided, or is to be provided, by the first person or a third person.

S245AR of the Migration Act 1958 makes it an offence to ask for and/or receive a benefit in relation to a sponsorship-related event.

Section 245AQ of the Migration Act 1958 defines the meaning of "benefit" stipulated in s 245AR and sets out a series of “sponsorship-related events”.

benefit includes:

a payment or other valuable consideration; and
a deduction of an amount; and
any kind of real or personal property; and
an advantage; and
a service; and
a gift.

sponsorship-related event means any of the following events:

a person applying for approval as a sponsor under section 140E in relation to a sponsor class;
a person applying for a variation of a term of an approval as a sponsor under section 140E in
relation to a sponsor class;
a person becoming, or not ceasing to be, a party to a work agreement;
a person agreeing to be, or not withdrawing his or her agreement to be, an approved sponsor in relation to an applicant or proposed applicant for a sponsored visa;
a person making a nomination under section 140GB in relation to a holder of, or an applicant or proposed applicant for, a sponsored visa, or including another person in such a
nomination;
a person not withdrawing a nomination made under section 140GB in relation to a holder of, or an applicant or proposed applicant for, a sponsored visa;
a person applying under the regulations for approval of the nomination of a position in relation to the holder of, or an applicant or proposed applicant for, a sponsored visa, or
including another person in such a nomination;
a person not withdrawing the nomination under the regulations of a position in relation to the holder of, or an applicant or proposed applicant for, a sponsored visa;
a person employing or engaging, or not terminating the employment or engagement of, a person to work in an occupation or position in relation to which a sponsored visa has been granted, has been applied for or is to be applied for;
a person engaging, or not terminating the engagement of, a person to undertake a program, or carry out an activity, in relation to which a sponsored visa has been granted, has been applied for or is to be applied for;
the grant of a sponsored visa;
a prescribed event.

What penalties are applicable under s 245AR of the Migration Act?

The applicable penalties are imprisonment for 2 years, or 360 penalty units (a total of $79,920, since the Commonwealth penalty unit increased on 1 July 2020) or both.

If the Department of Home Affairs takes action against Daryl Maguire and his alleged associates under s 245AR, they may face some of the penalties above.

Have many businesses or individuals been pursued under s245AR of the Migration Act before?

From our research of reported decisions from the AAT and the courts, there seem to be very few decisions by the Department of Home Affairs which have been appealed. It is possible that those charged under these sections are reluctant to appeal the decisions, to avoid further publicity. It is also possible that there are a limited number of these decisions.

As pointed out above, these issues are often pursued by the Fair Work Ombudsman. It is not clear how much action has been taken by the Department of Home Affairs.