By Colin Kruger
Westpac last week meticulously described how Bill Papas allegedly orchestrated one of Australia’s biggest frauds, right down to his plans to leave the country if it was ever discovered.
“The evidence against him is simply overwhelming. He was the architect of the scheme or, an architect of the scheme, and implemented and participated in every detail of it,” Westpac’s barrister, top silk Jeremy Soljar, SC, told the court.
Westpac has accused Forum Finance, founded by Papas, of allegedly swindling more than $500 million from the Australian bank and the local branches of two global lenders. Westpac accounts for most of the missing $500 million with a claim of $341 million.
Westpac has launched action against Papas to reclaim more than $342 million. He allegedly orchestrated a fraud worth more than $500 million.
Soljar laid out the business finance scheme that Forum Finance operated, acting as a middleman between banks such as Westpac and businesses looking to finance equipment purchases ranging from printers and copiers to food waste machines.
The court was presented with evidence that Forum funds were used to buy millions of dollars worth of luxury cars, and tens of millions of dollars worth of property, as well as emails showing Papas and fellow director Vince Tesoriero instructing Forum to pay for these goods.
Tesoriero, a race-car driving café owner from Melbourne, who had been attending court last week, has disputed the claims and says he was not aware of the fraud. His lawyers confirmed last Friday that he would give evidence on Tuesday.
Vince Tesoriero leaves a court hearing last year. Credit: Rhett Wyman
Papas remains unrepresented in the case and is yet to file a defence to the allegations.
“I do intend to address the matters raised at an appropriate time but for now, my primary focus is my health,” Papas said last year in a statement released to the media.
Soljar contended that it was not feasible that the two principals, Papas and Tesoriero, did not know that a vendor finance business such as Forum could produce the extraordinary wealth that apparently enabled the purchase of 38 properties, Audi R8 and RQ8 racing cars, other cars including Mustangs, a Range Rover, a $351,000 Porsche and a $315,000 Lamborghini.
“It is simply inconceivable that an office supply company is earning the sort of money that would be required to be buying multiple Porsches, Lamborghinis, racehorses, and all the rest of it,” Soljar said.
The most intriguing item of evidence was seized in a raid on one of Papas’ local properties.
Westpac presented a diary, purportedly owned by Papas, and highlighted entries on a page dated April 2018. It included diagrams and phrases such as “fraudulent transactions”, “overseas escape” – and “tell Vince everything”.
Soljar says the references are “rather telling” in light of what occurred three years later.
One of Forum’s alleged financial charades involved the expensive Orca waste disposal machines that Forum said it provided to ALH, the pubs and poker machines group, which at that time was controlled by Woolworths and billionaire Bruce Mathieson.
The machines use a process akin to human digestion to turn food waste into grey water at a rate of up to 45 kilos an hour.
Vince Tesoriero was driving the Forum Finance-sponsored Audi when it crashed out at Phillip Island in 2018.
In September 2018, Forum provided the paperwork to Westpac for an ALH loan to acquire 12 Orca machines from Forum entities for just over $2 million. The paperwork included forms signed by ALH chief operating officer Trevor Smith acknowledging delivery of the goods.
The paper trail was meticulous. And a complete fabrication, according to Westpac.
Smith works at ALH but has never been chief operating officer. The court was told his signature on documents presented last week were forgeries, and so was the document from billionaire Mathieson the year before confirming Smith had the authority to perform the transaction.
This only came to light in June 2021, after Papas had left the country as Westpac was becoming aware of the scale of the alleged fraud.
This meant that Westpac’s $2 million had not gone on financing this equipment – it became part of the $500 million financial hole at Forum.
The court heard how the funds Westpac deposited into Forum Finance accounts were moved out to other entities, with Papas and Tesoriero directing via email a lot of the spending.
Soljar offered the most detailed account yet of Papas’ last days in Australia in June 2021, which coincided with billionaire Kerry Stokes’ mining equipment business, WesTrac, finally uncovering the truth.
It was late May 2021 when a chance conversation between a Westpac employee and WesTrac executives uncovered a multimillion-dollar Westpac loan that WesTrac was unaware of.
‘The mere fact that he [Bill Papas] absconded in the way that he did … is significant.’
Jeremy Soljar, SC
On June 11, Westpac contacted Papas about the transactions.
He acted quickly.
The court was told that Papas sent a text on June 15 to a Westpac executive saying he was in transit to Perth to meet WesTrac the next day and clarify the matter.
“The next information emanating from Forum was that the meeting in Perth on the 16th with WesTrac had been cancelled,” Soljar says.
Westpac later obtained information from the Department of Home Affairs showing Papas was not in Perth at all. He was, in fact, flying out of Sydney that day.
Soljar cited the notebook page, and Papas’ departure, as significant to Westpac’s case.
“The mere fact that he absconded in the way that he did … is significant,” Soljar told the court.
“If there was a fair and honest explanation to give, that person would give it, but he didn’t do those things. In fact, the deceit kept going because he came up with this story about being in transit to Perth ... and it turns out, he’d already prepared his departure from Australia.”
“What he implemented on the 16th of June was the very overseas escape that we saw in his notebook from some years before. He went off to Greece, and he’s never come back.”
Forum had made the travel application in May 2021, saying Papas needed to go to Greece for three weeks to directly manage its growing overseas business, Iugis, amid COVID restrictions.
“We believe there will be considerable detriment to our business if our global chief executive officer cannot be in Greece to oversee our business and facilitate the finalisation of multiple major contracts that benefit us as an Australian company through our subsidiaries in Greece and the Middle East,” it said in the letter, which was shown to the court.
“Our focus is on bringing price to Australia with such a momentous undertaking by Australian owned company lugis,” it said.
Iugis Pty Ltd is now in liquidation and listed as one of the respondents to the court case.
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