MELBOURNE Storm officials found guilty of criminal breaches could face up to 10 years in jail as the law enforcement net tightens around those behind the salary cap rort.
The Victorian Police fraud squad, the Tax Office and the Victorian Office of State Revenue are among the bodies set to investigate the findings of a Deloitte audit of the Storm's salary cap deceit.
Company law experts said last night a criminal investigation into possible breaches of the Corporations Act would examine whether directors - including the Storm CEO at the time of the rorts, Brian Waldron - acted with care and honesty.
Further investigations could centre on whether there had been fraud or tax evasion at the club. Company officials, players and third parties could all be affected.
On one of the club's darkest days, John Hartigan, chairman and chief executive of club owner News Limited (publisher of The Daily Telegraph), yesterday revealed the extent of the cap rorts was far greater than thought when the scandal broke in April.
He also said the company had sacked the Storm's four independent directors, who have launched legal action against the NRL over the punishment handed to the club.
Mr Hartigan has frequently named Mr Waldron as the "chief architect" of the scheme.
Total breaches by the Storm are now estimated at $3.2 million for the five years to 2010 - more than 80 per cent higher than the original $1.7 million estimate.
"The club engaged in wide-ranging and elaborate cheating and must take its medicine," Mr Hartigan said.
NRL chief David Gallop yesterday described the rorting as "a level of deception that was extraordinary".
Mr Hartigan said the club was referring the Deloitte report to Victoria Police. It is understood this will be lodged in coming days.
"There's also been interest from the Australian Tax Office and ... from the Victorian State Revenue," he said.
Any ATO inquiry could affect former Melbourne Storm management, players and some third-party companies the club arranged to "employ" and pay players.
All Storm players and most club officials from the time of the rorts did not co-operate with the Deloitte investigation. They are likely to be forced to co-operate once the police and ATO become involved.
Experts said there could also be criminal breaches leading to prison time under both the Corporations Act and tax law for Storm officials.
Professor Michael Adams, head of the University of Western Sydney's law school, said the seriousness of the allegations in the Deloitte report suggested some company officials could face jail terms if convicted.
"If you look at the Rodney Adler case, the sentence was in the five to 10 year range," he said.
"You would assume that, given the level of seriousness of possible crimes, it could be similar here."
The most obvious legal breach could come under Corporations Law provisions dealing with the need for company officials to act truthfully.
Company officers found to be "acting dishonestly" in their duties are liable for up to five years jail and a fine of up to $220,000.
Mr Adams said provisions for fraud under Victoria's Crimes Act potentially allowed for jail terms of multiple years. Tax could also be a major issue for many connected to the Storm at both a civil and criminal level.
Mr Hartigan said the damning Deloitte report found "free flights, gift vouchers, the use of fully maintained cars and so on (for players). They were either never disclosed or were written up as something else".
