The man at the heart of Australia's Country Care prosecution opens up about his ordeal

18 August 2022 09:44 by James Panichi


Robert Hogan had been traveling in the historic country town of Bendigo, the epicenter of southeastern Australia’s 1850s gold rush, when he received a Facetime call from his son. The news was both troubling and inexplicable: the family store in Mildura, a town some 400 kilometers away, was being raided.

Around 25 people, including police officers in SWAT gear and antitrust officials, had crowded into the small shopfront, confiscating documents, cracking open the computers’ hard drives and videoing everything they were doing — a scene that Hogan now compares to the movie Mission Impossible.

“They want to talk to you,” Hogan’s son Tom said. “And you’re on video too, dad. So, don’t swear!”

The official from the Australian Competition & Consumer Commission got straight to the point. As Robert Hogan recalls it, the official said that the dawn raid, which in fact had been launched several hours after sunrise, was investigating cartel conduct. Hogan said: “Well, I suppose I’d better come home.” The official’s answer: yes. “These could be criminal charges,” he said.

Hogan’s trip back to Mildura, a fruit-growing town of 60,000 in the midst of an arid landscape, wasn’t pleasant. With the help of his wife Bec, he Googled “cartel” in the hope of making sense of what was taking place. The word, he told MLex during an extended interview from his Country Care business, conjured up images of “thugs out there, doing drugs and beating people up.”

“We had no idea [what] a cartel was... It bewilders me what it’s all about, to be honest,” he says.

This day, back in 2016, was a key moment in Australian legal history. Hogan, and his then employee Cameron Harrison, had become the first individuals in Australia to face criminal-cartel charges. And Country Care, the disability-aid retailer Hogan had built from scratch, would be the first Australian business to face criminal-cartel charges in over 100 years.

For Hogan — known simply as “Rob” — it was the start of a five-year legal battle to clear his name, which cost him more than A$10 million. It was an experience that left him financially and emotionally depleted, as he prepared for a 12-week trial against the backdrop of a Covid-19 outbreak and jury members facing their own challenges to deliver a verdict.

When, in June 2021, the jury acquitted the accused of all charges, Hogan felt his fight had been vindicated. Yet what he still considers the injustice at the heart of the prosecution meant that he would struggle to reconcile himself with what had happened.

“I think that I am close to 80 percent better,” Hogan tells MLex around a conference-room table in his new company headquarters in Mildura. “Both me and Bec are not totally there yet. It’s been five years. I wouldn’t be surprised if it takes two or five years to really get myself into a place where it’s just totally behind me.”

Yet Hogan believes that the time is now right to talk about what happened and why it was that the ACCC chose to road-test the new criminal offenses on the business that grew from a half-store shopfront on Mildura’s Ninth Street to a warehouse that builds, sells and services mobility-aid equipment for his local community.

“I really felt that we were the guinea pigs. I thought that they had picked on this little country … guy up in Mildura. And they said: ‘This will be a good one. We want to win. This is our first one ever. Let’s do this’.”

A year after his acquittal, his resentment of what the ACCC put him and his family through hasn’t subsided. To this day, he questions why his company’s dealings with other retailers as part of a regional distribution network would be seen as an appropriate trial-run for laws designed to jail serious cartelists.

“[The ACCC’s] methods of interviewing people, the methods of getting their information and then what they actually choose to use, is just disgraceful. They need to understand that there’re humans at the other end of every decision they make.”

As to why he eventually prevailed, albeit at great financial and emotional cost, Hogan believes that the ACCC miscalculated who they would be dealing with.

“They have to have underestimated our drive to fight this thing. And our ability to sell assets and borrow money and do those things to get this thing to where it is today, where we are not guilty,” he said during an often-emotional interview.

The prospect of incarceration

In the mid-2010s, the ACCC’s foray into criminal-cartel investigations amounted to picking low-hanging fruit. Three international shipping companies — two Japanese and one Norwegian — pleaded guilty when charged by federal prosecutors in cases referred by the ACCC that were based on probes carried out in other jurisdictions.

The shipping companies hadn’t involved charges against individuals — meaning that the 2009 offenses, which carry jail sentences of up to 10 years, had yet to make it clear to individuals considering cartel conduct that the loss of their liberty was a real and present threat.

It was against this backdrop that federal prosecutors, on the advice of the ACCC, launched the Country Care prosecution — the first to target an Australian company and the first to target individuals, under offenses included in a 2009 update to competition law.

The Commonwealth Director of Public Prosecutions, or CDPP, laid charges against Country Care, Hogan and Harrison, the former employee, that included cartel and price-fixing allegations centering on two government tender processes.

The first three charges related to a 2015 tender process of the Department of Veterans’ Affairs, or DVA, a federal government department. The other charges centered on a 2014 tender process by HealthShare NSW, an agency of the state government of New South Wales.

In both groups of charges, Hogan faced accusations over his relationship with members of what was known as the Country Care Group, an alliance of independent retailers working together to fulfill distribution requirements under the terms of the government tenders.

Ultimately, none of the charges stuck — or, at least, the jury wasn’t buying what prosecutors had to offer. After an exhausting 12-week trial, the jury emerged from just two-and-a-half hours of deliberations to deliver its not-guilty verdict to the Federal Court of Australia, in Melbourne.

Yet Hogan says he wasn’t confident of being acquitted and that, right up until the jury’s verdict, the prospect of a jail sentence loomed large in his mind. “You don’t know what to expect,” he says. “And you would hope, and you pray, that it’s not going to be that. But you just don’t know. So, that was extremely real for me.”

This was despite the reassurances of his legal team, which had been adamant, since the earliest stages of the lawsuit, that he wouldn’t face imprisonment, even in the case of a guilty verdict.

“[They were saying] to me: ‘No, don’t worry, there won’t be any jail time. We’ll be right. We’ll get around that. I’m sure we’ll get around that’,” Hogan says. “But are they saying that because they just don’t want me stressing out for the next few years?”

“It was a challenging period. So, I certainly had lain awake thinking of that, of how I would handle incarceration and, you know, how Bec and the family would handle it” — Hogan tears up at this point in our interview.

The trial itself proved exhausting for Hogan. Every day of the trial, he would wake up at 3am, to read through statements relating to the case and send answers to his barristers Dean Jordan and Kate Morgan, representing, respectively, Hogan and Country Care.

“So, that kept me entertained, I suppose. It kept my mind busy. Otherwise, if I was just walking in every day and letting them do their thing, then walking out. I’d just… I don’t know how I would have coped. I don’t know if I would have,” Hogan says.

Shooting from the hip

Hogan recounts the 2016 raid on his business as though it were a bad dream: Computers pulled apart; officials with “whopping big suitcases” loading up documents; lights and whizzing noises as the hard drives were drained; police officers with “tasers and batons.”

“They are taking everything,” Hogan said to himself. He was required to hand over to the ACCC his laptop, phones and iPads, which he did. The raid continued until around 7pm; Hogan and his wife returned to lock up, walking their dogs along the way.

The charges informed Hogan that he had been accused of working to “induce the making of an agreement containing a cartel arrangement.” His mind immediately went to a contract his legal team had written up for the Country Care distribution consortium.

The law firm that wrote up that contract, Bendigo-based lawyers he had used for other contracts, is now being targeted by civil legal action in the state of Victoria, with Hogan attempting to recover at least some of the money he spent on his defense.

“That’s all I could come up with: ‘It’s got to be that contract.’ We sent it out three days ago and now these guys are just coming to our premises,” he said, recalling the ACCC raid.

Hogan also thought of the Country Care Group, with its 45 members and an estimated 83 member stores. It was an arrangement that had been established in 2004, when Country Care won a DVA contract, and had never posed a problem since then.

As Hogan remembers it, the DVA had encouraged him to put a distribution arrangement in place so that Country Care could subcontract work under the tender in a way that would cover the whole southeastern Australian state of Victoria.

“They said that they wanted a consortium or a business that could cover the whole state. There wasn’t a business that could cover the whole state. That meant that we had to create some sort of a consortium,” Hogan says, adding that the DVA accounted for 20 percent of Country Care’s business in Mildura and he didn’t want to lose that income.

“So, how could we, as a little old country town business in Mildura turning over about, I don’t know, 4 or 5 million dollars, how could we keep that contract? And I thought that the only way of doing that was to create exactly what they asked for: a consortium,” he said.

Describing himself as a boilermaker and a welder by trade, he admits that his submissions to the DVA were “pretty raw.” However, it contained the detail the department needed, along with assurances that the consortium could supply the whole state of Victoria.

“Back then, things were very different to what they are now,” Hogan recalls of his relationship with members of the retail group, conceding that, knowing what he now knows about competition law, he would have expressed himself very differently. “I used to shoot from the hip,” Hogan says, remembering the early days of the consortium.

However, he is adamant that nothing he did amounted to a cartel — he merely offered advice to other retailers.

“There’s no law against talking and giving advice and sharing our experience in the industry to help them grow their businesses. That’s all we’re doing. We’re just mom-and-dad businesses. Just helping each other grow our businesses.”

The way back

Today, Hogan’s role at Country Care is that of chairman, with his two sons handling the day-to-day operations. He describes the past year as “a bit of a mixed bag,” with his usual optimism tempered by the reality of what he has been through.

“I didn’t think it would affect me,” he says, adding that his response to the not-guilty verdict should have left him “on top of the world.” However, Hogan appears still visibly shaken by his ordeal and is often emotional when recounting what he went through. “I was just tired,” he says.

“I was … so flat. I can’t get going. I can’t get motivated. And it’s not who I am. It’s not my personality,” he says.

“Yeah, it pulled the socks out of me for a little while [and] certainly my wife, and my family too. Remember, they were going through this with us as well; we’ve got the kids running the business; kids at home, running the family. They’re all living the same torture,” he says.

As for Hogan’s relationship with the other members of the Country Care Group, he says that there has been no industry conference and no more open discussion. He describes his interactions as a world of clear disclaimers.

Meanwhile, Hogan says that the experience with the Bendigo law firm that drafted the contract later impugned as an attempt to establish a cartel has meant that he now accepts that for matters of this kind, he goes to “bigger, higher buildings in the city."

However, the millions of dollars he spent to clear his name and stay out of jail is still something that rankles — particularly given that, under criminal law, he’s not entitled to ask for his costs to be covered by the agencies that pursued him.

“If this was a civil case, all costs would have been returned,” he says, adding that he wouldn’t consider a refund for his legal bills adequate compensation for what he had been through.

“I think [the ACCC] really stuffed this up,” Hogan says, using an Australian colloquialism.

“They were allegations falsely put; proven that their key witness inadvertently lied, withheld evidence. It’s just ridiculous that we are even talking about just costs. We should be talking about proper compensation for what they have caused to the business and to our family.”

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