Hundreds of Chinese workers are being exploited by some of Australia's largest building firms in a lucrative rort that has seen criminal figures and outlaw motorcycle gangs infiltrate Victoria's plastering industry.
Union officials have also been implicated in the scandal, which includes allegations of stand-over tactics, immigration fraud and sham contracting.
The Chinese labourers, who often enter Australia on student or 457 visas and have no plastering experience, are paid as little as $8 an hour in cash. Other foreign workers are paid the award rate of $35 an hour for a standard 36-hour week, but are forced to work up to 60 hours.
The crews are usually organised and paid by a Chinese-speaking "gang boss", who acts on behalf of the plastering subcontractors. Advertisement
Industry insiders have accused some CFMEU shop stewards of "turning a blind eye" to the practice.
The peak body for Victoria's plastering industry, the Association of Wall and Ceiling Industries, has conceded the illegal practice is widespread, particularly on commercial sites in the CBD. It has called on the state government to introduce a licensing and registration system for all Victorian plasterers.
Over the past year, the Immigration Department and Fair Work Building and Construction have received complaints about two of Victoria's largest plastering subcontractors, Expoconti and Express Interiors. The complaints relate to alleged immigration fraud and exploitation, which are believed to be the subject of ongoing investigations.
An Expoconti spokesman said the company had rectified its employment policies following a previous incident in 2003 but denied it was now doing anything inappropriate. Express Interiors did not respond to a request for comment.
Fairfax Media has uncovered a network of criminal figures with links to several large plastering firms operating across Melbourne.
Two men involved with the Comancheros motorcycle gang are directly involved in a Tullamarine plastering firm, while Bentleigh-based JZ Lee has links with two brothers involved in the Hells Angels' Darkside chapter.
Convicted drug trafficker Shaun Goerlitz is the director of Prostruct Construction, which was placed in liquidation last year with debts of $5.3 million.
The plastering company subcontracted to some of Melbourne's largest construction firms including Hickory Group, L. U. Simon and Buildcorp Commercial.
According to several industry sources, Mr Goerlitz employed illegal Chinese workers at apartment developments in the CBD, Doncaster, Highett, Flemington and Clayton South. The workers are understood to have received $10 an hour on some sites and worked up to 60 hours a week.
Despite liquidation proceedings, a new business linked to Mr Goerlitz is believed to have continued providing plasterers at L. U. Simon sites in Abbotsford and West Melbourne until recently.
Prostruct liquidator Lowe Lippmann, is investigating the transfer of $1.2 million just weeks before the company collapsed and the alleged disappearance of two Lamborghinis owned by the company.
Mr Goerlitz's former business partner, Prostruct co-director Timothy Ma, has a conviction for trafficking heroin from China. Mr Goerlitz also owned a building company with Jadran Delic, who has company and property links to convicted drug dealer Horty Mokbel, brother of drug boss Tony Mokbel.
L. U. Simon managing director Peter Devitt said Mr Goerlitz was "not currently engaged" by the company and they were unaware of any illegal migrants on their sites.
Mr Goerlitz could not be contacted through several phone numbers.
Sources claim underworld figures have maintained their grip on the plastering industry through intimidation. Fairfax Media spoke with 18 plastering subcontractors and suppliers. None were willing to speak on the record.
"These are very, very serious people. The builders and developers just don't want to know about it and other plasterers, or anyone else for that matter, who complains get threatened," said an industry source.
Developers and large-scale builders have denied knowledge of the rorting, claiming they have little control over who subcontractors bring onto their sites.
"We only have a certain amount of control over day-to-day operations when it comes to the subcontractors," said Ashley Levin, director of Buildcorp Commercial. "People certainly don't have to present passports when they come onto a site."
Hickory Group joint managing director Michael Argyrou said he was unaware of the practice, but would be "very disappointed" if it was happening.
The revelations are sending shock waves through the building industry, with construction giant Brookfield Multiplex repeatedly declining to comment on whether it has employed illegal migrants on sites.
But some plastering subcontractors claim there are measures available to the industry to help stamp out the practice.
"We have new employees bring their passports to us and we send the names to the CFMEU to make sure they're OK," one said. "The thing is some subbies don't care where they get people from and once they're on a site it's impossible to tell who should be there and who shouldn't."
A spokeswoman for Fair Work Building and Construction declined to comment on any investigation, but conceded the federal agency did not "have the power to conduct raids or to detain, arrest or deport people".
The Immigration Department has "located" nearly 1400 "unlawful non-citizens" and issued more than 200 illegal worker notices to employers in Victoria in 2011-13. "There have been no prosecutions to date in the building and construction industry in Victoria," a spokesman said.
Association of Wall and Ceiling Industries executive director Ian Swann urged the recently announced royal commission, Australian Tax Office and law enforcement agencies to scrutinise illegal practices in the plastering industry.
"Our industry needs a level playing field. These practices that short-circuit the legal requirements make it extremely difficult for legitimate business to earn a living," he said.
CFMEU assistant secretary Shaun Reardon said the union was aware plasterers of Chinese background were "vulnerable to exploitation" and had taken steps to ensure they were aware of their rights and receiving their due entitlements. This has included negotiating a clause in the last industry enterprise bargaining agreement requiring that employers checked the visa status of "temporary foreign labour".