How to avoid a $600,000 IT ‘tourist trap’

  • October 30, 2021

A $600K IT consultant has been fined $1.6 million over a case of overspending by an Italian resort.

Key points: The IT consultant had been given a total of $3,900 for IT services, but instead spent $4,800 at a local Italian restaurantBusinessman Michael Pescarolo was found guilty of $600k IT overspendA $400K IT specialist was found to have misappropriated $500K in IT servicesBusinessman Pescarcolo was fined $800K over the IT overreachThe IT specialist used his own company’s servers and software for his IT consulting work.

But he used his IT services to hire a host of other people to work at his Italian restaurant, and then to pay their bills on the company’s behalf, with no record of any money being spent on the IT services.

Pescarcoli had spent almost $3.5 million on IT services alone between May 2012 and May 2014, with the IT consultant earning $1,500 per hour.

The fine is the largest in Australia and the second-highest in New Zealand.

The court was told Pescarmolo spent more than $400,000 on hotel and meal packages at the Italian resort, and that the IT contractor’s use of his own IT services was “in breach of a trust”.

The court heard Pescartolo and his business partners had been warned they risked losing their IT contracts if they overspent.

The IT consultant was given a “total of $4.2 million overspends” between January 2012 and January 2014, while the IT company’s overspenders totalled $3 billion.

“The defendant breached a trust of trust between the defendant and his IT partner and the defendant failed to protect the trust by providing adequate safeguards to prevent or detect a breach of the trust,” the Court of Appeal said in its decision.

The case was heard in the Federal Court.

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