The revelation of Cayman Islands government-issued credit card expenses and their use to buy personal items has made our local headlines and the subject of editorials.

My Editorial yesterday (“Government credit card use could help Bush” at: http://www.ieyenews.com/wordpress/the-editor-speaks-government-credit-card-use-could-help-bush/) on it made the point that unless criminal prosecutions are enacted the ‘norm’ illegal use of them for this purpose will continue to happen.

One of our readers, who now lives in Australia, but is a former financial officer here in the Cayman Islands, sent me this story.

May it be a warning to ……

Former Sydney Ferries boss Geoffrey Smith jailed for 18 months [using his CEO Credit Card for personal use]

By Lauren Farrow From The Sydney Morning Herald

He was once the deputy chief of the Australian Navy and the recipient of accolades and military decorations. Now former CEO of Sydney Ferries Geoffrey Smith has been jailed for at least 18 months after defrauding the government corporation of more than $200,000.

Family members of the retired rear admiral wept in court as he was sentenced on Monday.

Sydney’s District Court heard Smith was hired to help turn the troubled transport company around in August 2006 but soon began using his CEO credit card for personal expenses.

From September 2006 to May 2008 he defrauded Sydney Ferries of more than $128,000. He eventually paid back all but $23 of this but then went on to steal a further $111,649.

This was spent on funding a lavish lifestyle, which included expensive family holidays and repayments on a Sydney home valued at more than $2 million.

In handing down his decision, Judge Michael Finnane said that up until this point in Smith’s career he was a man of “exemplary good character”.

At the time of his retirement from the navy in 2002 he was Maritime Commander of the Australian Fleet, had won a number of military decorations and had been made an officer of the Order of Australia.

“In every sense it is a tragedy that such a distinguished man should find himself facing sentence for fraud offences.”

Smith, who pleaded guilty to one charge of cheating or defrauding Sydney Ferries, told the court earlier this year that he had promised his wife a comfortable home in her retirement.

To this end he bought a property for them in Sydney’s north in 2002, carrying with it a $1.5 million mortgage. By the time he was CEO of Sydney Ferries four years later he was in a dire financial position, attempting to pay off a crippling mortgage and his wife’s medical expenses.

But he continued to live beyond his means, borrowing more money in 2007 to put in a swimming pool, lease two BMW cars, buy his wife jewellery and pay for expensive family holidays.

“Clearly his lifestyle far exceeded his income and he chose from May 2008 onwards to engage in active fraud of Sydney Ferries,” Judge Finnane said.

When the matter first came before him, Judge Finnane said he thought the sentence might be able to be served by way of an intensive correction order rather than full-time imprisonment

But he said Smith’s case was a “very serious example of a major fraud” and highlighted the need for general deterrence. He sentenced him to a minimum of 18 months and a maximum of 2 years.

IMAGE: File photo of Geoffrey Smith, former Sydney Ferries CEO, arriving at an ICAC hearing in 2009. Photo: Steven Siewert

For more on this story go to: http://www.smh.com.au/nsw/former-sydney-ferries-boss-geoffrey-smith-jailed-for-18-months-20140825-108ag9.html#ixzz3BPFLW7qu