The Commonwealth Bank of Australia and the Ace Foundation have finalised a settlement in a US lawsuit linked to an Australian criminal case that has seen charges laid against two former CBA IT executives.
The Ace Foundation is a US-based not-for-profit organisation that last year sued the bank. At the centre of the lawsuit were funds advanced to two former bank employees, Jon Waldron and Keith Hunter.
Waldron and Hunter have been charged with allegedly accepting kickbacks in return for awarding contracts to software company ServiceMesh while employed by CBA (ServiceMesh is now owned by CSC).
NSW Police laid charges against the pair in early 2015.
The Ace Foundation has said the funds linked to the allegations were for charitable projects Hunter and Waldron were engaged in on its behalf.
The foundation was seeking the return of US$2.53 million which it said had been frozen by the bank. The funds were frozen as part of a NSW Crime Commission civil case launched in the NSW Supreme Court in mid-2015.
Waldron and Hunter have pleaded not guilty in relation to the criminal charges.
(The Ace Foundation has since been replaced by a new not-for-profit called the CoreTech Foundation. The foundation has rejected any wrongdoing on its part.)
CBA and the Ace Foundation earlier this month reached the out-of-court settlement in relation to the foundation’s lawsuit.
"In May 2015 Ace Foundation filed legal proceedings against Commonwealth Bank in California relating to funds in bank accounts of the two former employees that had been frozen on the application of the NSW Crime Commission," a spokesperson for the Commonwealth Bank told Computerworld shortly after the settlement was initially reached.
"Commonwealth Bank can confirm that a notice of settlement has been filed in these proceedings. These matters are related to the ongoing criminal proceedings in Australia."
"Commonwealth Bank has no tolerance for any illegal activity by any employee and in February 2015 we reported certain suspicious activity to NSW Police," the spokesperson said.
"In March 2015 two former Commonwealth Bank employees were arrested and charged by NSW Police and we continue to fully cooperate with the authorities as these proceedings progress through the courts."
A US federal court filing reveals that the lawsuit has now been formally withdrawn.
The Ace Foundation confirmed to Computerworld that the out-of-court settlement had been executed.
“Under the terms of today’s settlement, CBA has agreed not to stand in the way of Ace’s attempts to recover the Foundation’s funds, and Ace has agreed to dismiss its lawsuit,” the foundation said.
“The Agreement of Dismissal, which was filed today with the United States District Court for the Central District of California, provides that ‘CBA shall not assert a beneficial interest in the funds presently held’ in the two accounts ‘and hereby covenants that if’ the courts agree to allow ‘access to the funds’ in the two accounts, ‘CBA will not impede any lawful withdrawals from such accounts.’”
“The Ace Foundation is pleased to have reached this settlement agreement with the Commonwealth Bank of Australia,” said Peter Morris, an attorney acting on behalf of the Ace Foundation.
“We have maintained from the start that Ace has the right to recover the funds that were deposited in these two accounts, and today’s settlement moves us one step closer to achieving our goal.
“We look forward to future actions by the courts that will allow the funds to be withdrawn from the bank and returned to Ace, where the money will be spent to advance the philanthropic purposes that led to Ace’s creation in the first place.”
The funds currently remain frozen by order both of the Supreme Court of NSW and of the High Court of New Zealand.
“When those court orders are removed, the Ace Foundation will immediately seek the return of all of the funds in question,” the Ace Foundation said.
The Australian criminal case is due to reach trial this year.