Revealed: Alleged Westpac fraudsters in multi-million dollar property binge
The colourful soccer identity and business partner accused of defrauding Westpac by almost $400 million allegedly funnelled tens of millions of dollars of proceeds into high end residential properties in Melbourne and near Sydney and a portfolio of petrol stations in small Victorian towns.
The alleged $360 million fraud by Bill Papas’ Forum Finance against Westpac has been described by a judge as “a long-running, calculated and elaborate fraud which would rank high in the catalogue of corporate misfeasance”. The fraud is alleged to have been conducted between 2018 and 2021.
The Sydney-based group held itself out to be a major player in the equipment leasing world before its demise into court-directed liquidation this month amid serious fraud allegations by Westpac. The Federal Court has heard that Forum Finance allegedly used false invoices and forged signatures to obtain Westpac loans without the consent of at least seven of the major bank’s corporate clients.
Westpac aired the allegations when it took civil action in the Federal Court to freeze the assets of Mr Papas, his business partner Vincenzo Tesoriero and their companies. Mr Papas is in Greece and is yet to return to face the allegations, with his lawyer revealing this week that the 49 year old had tested positive for COVID-19.
The Age and The Sydney Morning Herald can reveal that entities set up by Mr Vincenzo Tesoriero purchased several petrol stations, most for more than $1 million, in tiny country towns in Victoria during 2019 and 2020.
One petrol station, in Violet Town – a hamlet in Victoria’s north that is bypassed by the Hume Highway and has a population of 1,540 people – was purchased for $3.5 million, according to land title records.
Mr Tesoriero’s entities also bought the bait and tackle shop in the East Gippsland holiday town of Mallacoota, which has a few petrol pumps, as well as petrol stations in other towns including Ouyen (population 1,045), Derrinallum (pop. 557), Dimboola (pop. 1,424), Taradale (pop. 448) and Lake Boga (pop. 985).
The transactions only apply to the land underpinning the businesses, the actual petrol stations are owned by a corporate entity with no association with Mr Papas, Mr Tesoriero or Forum Finance. None of the operators or these stations, nor the vendors are involved in the Forum scheme and were merely sellers of property that was already advertised for sale.
Mr Tesoriero’s companies purchased many of the petrol stations from high profile Melbourne lawyer Konfir Kabo, who is a well known commercial property investor. The sales were part of a $60 million portfolio that Mr Kabo was selling during 2018 and 2019.
Westpac has also won freezing orders over a $7.95 million limestone brick home in Hawthorn’s prestigous Scotch Hill precinct with a tennis court and a pool and a sprawling waterfront pile in Wagstaffe on the Central Coast with its own boathouse and a deep water jetty. Westpac also has freezing orders over an industrial lot in the Melbourne suburb of Clayton South that is owned by Mr Tesorerio’s company 14 James Street Pty Ltd.
Many of the entities are linked to trustees that hold the properties on behalf of fixed unit trusts. It is therefore not clear whether Mr Tesoriero has any financial stake in the properties.
Westpac has obtained freezing orders over the companies that own these properties as part of its court action against Forum Finance.
But unbeknownst to Westpac, many of the properties owned by the companies subject to Westpac’s freezing orders are already caveated back to Mr Kabo’s business interests, meaning he has kept his foot on the properties and any attempt by Westpac to repossess the real estate would need to be with his permission.
Sources close to the transactions but not permitted to speak on record said the caveats were filed as part of a vendor financing agreement between him and the Forum directors at the time of the sale. Those sources said the sales were never fully completed because the repayments under the financing agreement were not fulfilled. All the caveats were lodged long before any fraud was suspected, according to land title records.
Land title documents show Mr Tesoriero’s companies used these property purchases to get millions more from the ANZ Bank and Judo Bank via mortgages. National Australia Bank was also tapped for some mortgages. It is not clear if those mortgages are still being serviced. ANZ, NAB and Judo declined to comment.
A lawyer for Mr Tesoriero declined to answer a series of detailed questions about the property transactions, saying he did not have instructions to respond. Earlier in the Federal Court proceedings, a lawyer for Mr Tesoriero had argued that he had ceased being a director in Forum Finance’s entities some time ago. Company records support that statement, however, it appears Mr Tesoriero did not resign as a director from one of Forum Finance’s subsidiaries.
The court also heard that Westpac believes Mr Papas has overseas assets including his stake in Greek football team Xanthi FC and Westpac believes that some of its money flowed from Forum’s entities into iugis, a waste management company of Mr Papas’s with partnership with Liverpool FC.
Most Viewed in Business
From our partners
Source: Read Full Article