How the high life came crashing down on racing conman Bill Vlahos
Bill Vlahos was on top of the world and living the high life before it all came crashing down six years ago. He was one of the least likely characters to swindle millions, and hundreds of unsuspecting victims had no idea his punting club was a scam.
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The first rule of The Edge punting club, was not to talk about The Edge punting club.
It sounds a little bit like the movie Fight Club, starring Brad Pitt and Edward Norton.
The movie and Bill Vlahos’ punting club did have one thing in common — they were both works of fiction.
William Stephen Vlahos has now finally accepted what many others did six years ago when the money ran out.
He has pleaded guilty to fraud charges over the club that lost $150 million of investors’ stake money, while the 1500 unlucky losers cannot bear to think about the $500 million in “winnings” they thought they had in their “accounts”.
Vlahos was charged with more than 300 offences, but today pleaded guilty to two of obtaining financial advantage by deception to the value of just $17.5 million.
Now investors, or victims, have finally seen admissions from Vlahos and they want the sentence to reflect his crime.
Vlahos had been living the high life before it all came crashing down in 2013, when the money “disappeared”, he was “bashed” at his coastal property and his car was torched, in what police later suspected was an attempt to conceal evidence.
Before that horrible week for Vlahos, he had been on top of the world.
Vlahos bid $5 million for Jimmy, a half-brother of Black Caviar, while accompanied by strippers at the William Inglis Yearling Sale in Sydney in April that year.
It was a record price for a yearling.
Jimmy, for which Vlahos never paid in full, died after he contracted laminitis from a spider bite, without getting a chance to race.
There were also trips to Dubai to the races and the meteoric rise of his company BC3 Thoroughbreds, which spent up to $100 million on buying horses.
Vlahos, the boy whose family lived in the commission flats in Prahran when it wasn’t trendy, was one of the most unlikely characters to swindle millions from some of the good and the great of Australian business and society and some of the hardest working on the factory floor.
Guest furniture owner Bill Guest was an unlucky punter, while former Melbourne president Don McLardy also had a stake.
Former jockey Simon Marshall, who was the face of BC3 Thoroughbreds, also lost money.
“I had no idea that this was a Ponzi scheme, if that’s what it turns out to be,” he said.
“Like everyone else I was led to believe that this had grown into a larger sum with the percentage winnings that were reported. But that doesn’t seem to be the case.”
Gold Coast Suns general manager Craig Cameron was lured from his job at the Richmond Football Club to run BC3 Thoroughbreds.
He had no idea of the scale of the punting club and was dragged through the mud in the scandal despite his innocence when the racing company was put into administration.
Some punters lost spare money. Others lost the lot.
One of Vlahos’ victims, a single mother from Melbourne, lost $500,000 — money she had received from the sale of her family home.
“I had more money when I was 20,” she said.
Even some police were caught in the sting, while a self-managed superannuation fund also lost $434,000, bank account records showed.
Vlahos first hit the headlines in 2007 when he bought a share in the horse Pillar of Hercules, which was previously owned by Tony Mokbel’s brother Horty.
The $1.8 million purchase was a dud investment, with the horse only winning two races and $250,000 in 28 starts.
QUESTIONS OVER VLAHOS’ MORTGAGE
I sat down with Vlahos for lunch at Pure South restaurant in Southbank on December 2, 2013 after being leaked an email from a club member concerned they had lost their money.
The main restaurant, which has now moved to the first floor, had an outdoor area where Vlahos made an impassioned defence of his club and showed off spreadsheets of his bets.
He was trying his best to convince me, and a representative of one of his investors, that everything would be okay.
But his answer to one key question stuck out — had he paid off his mortgage?
No, because he put all his investments in the punting club.
It didn’t make sense. Why would a father of two young children making millions from punting and operating a major horse business BC3 Thoroughbreds still owe the bank for the family home in Torquay?
When asked if there were any records of punters’ bets, Vlahos was adamant it was all about trust, like it was a $10 Saturday racing club between mates at the local football club.
“There’s nothing in writing because it’s a punting club, and it’s a trust punting club, so the people that are in it have made the decision that they understand how this punting club works between me and them, and they’ve made a decision based on that on to put their money in and they’ve always got their money until this wind-up,” he said.
Vlahos was still promising to deliver the cash, despite investors’ concerns.
“They’ve trusted the process. I haven’t promised anything that doesn’t exist. They understand and the process and then they made the decision to put their money into this process. And once again, on record, I want to say that email does not say that the money is not there, it says that the money is there,” he said.
THE MYSTERIOUS DANIEL MAXWELL
Four days after that story was published in the Herald Sun, Vlahos revealed in a Sydney court that $194 million in a Westpac account linked his betting partner Daniel Maxwell had vanished.
The internet bank records he had been showing worried punters were fake.
It appeared Vlahos was better at Photoshop than backing winners.
Then two days later there was a mysterious fire at the BC3 stables in Connewarre.
Vlahos’ Holden Rodeo ute was torched on a Sunday night when he told neighbours he had been bashed by heavies.
He had blood on his shirt and bruises on his face, but it was suspected Vlahos had done it to himself.
Police never found anyone was responsible, and a yellow petrol can on the property was claimed to have been the accelerant.
Vlahos was suspected of starting the fire in his ute, which contained the laptop with all the evidence of The Edge’s operation.
Unfortunately for Vlahos, he had not realised that all the emails were backed up on servers, which were passed on to fraud police when he was eventually charged.
When you have all the pieces of the puzzle, it’s clear that Vlahos’ punting club was a scam.
But the success of the swindle was that no-one knew how many people were in the club, many thought it was just their syndicate of around 20 punters.
Vlahos claimed to make returns of 25 per cent on Sydney and Melbourne horse races through his mysterious friend Maxwell who lived in Dubai and placed the bets on international markets.
Smart punters would know that such returns were impossible and that betting markets in Dubai would not take the bets they were placing.
And if they knew there were 1500 punters in the club, they would have definitely twigged that no one could get bets on of that size because bookmakers would refuse to take the risk.
Vlahos blamed Maxwell in court for taking the money, even providing an address.
We sent a reporter to find Maxwell, but the current tenant said at the time they were not Daniel Maxwell and the previous tenant was a German, who was not known by either name.
Vlahos was such a good liar, he could bring himself to tears on cue, a punting club member who lost hundreds of thousands said.
He told the punter that Maxwell had a seven-year old daughter who died in Dubai when she hit her head on the edge of a pool.
The punter, who had young children, was convinced and he couldn’t believe that he had been duped on such an emotional story, let alone the cash he lost.
HOW THE EDGE BEGAN
The Edge started in around 2005, first as a collection of friends putting bets on Sydney and Melbourne races.
As word spread, more punters wanted to join in.
Some punters became syndicate leaders, bringing in their friends, and often their families, on to a sure thing.
Forensic accountants would be the ones to find the true picture of the punting club, which ended up with $153 million in unsecured creditors.
It was essentially a Ponzi scheme.
Money from new investors was used to pay out original investors, who then went out and purchased boats and flash holidays, fuelling demand for new victims.
The syndicate leaders met in Footscray in the days after the court case.
Their faces were grim as they began to understand how they had been ripped off. And how they would have to tell their family and friends just what they had got them into.
A Yarrawonga syndicate of 600 punters had what they believed was $73 million in the club.
Some friendships have never recovered as syndicate leaders who made money argued with those who boarded the gravy train when it was too late.
One punter said after the scam was busted: “I heard about it through a friend, it sounded too good to be true.
“I feel like an idiot. This was my savings of a lifetime, it came from not paying down my mortgage. We’re all a little bit greedy, it’s human nature.”
MORE NEWS
PRISON TERM ‘INEVITABLE’ FOR VLAHOS
WITNESSES RECOUNT GREENE’S FATHER’S ARREST
BILL VLAHOS’ RACING WEB
• Bill Vlahos: Chairman of BC3 Thoroughbreds and architect of the punters’ club
• Daniel Maxwell: The mystery Dubai man named in court who allegedly has the club’s money — but there are questions about whether he exists
THE PUNTERS’ CLUB LOSSES
• $153 million (ACTUAL)
• $500 million (TOTAL OF WHAT THEY WERE TOLD BY VLAHOS)
THE VICTIMS
• Don McLardy — Former Melbourne Football Club president
• Bill Guest — Owner of the Guest Group furniture company
• Paul Bevilacqua — Director at Guest Group who introduced Bill Guest into the club
• Yarrawonga community — Up to 600 members in one syndicate
• Aloga — Bahamas firm which took NSW court action to recover $26 million from the club
• BC3 Thoroughbreds — A racing syndicate that owns Black Caviar’s half-brother Jimmy
KEY PLAYERS
• Simon Marshall — Sales manager, former jockey
• Craig Cameron — Chief executive of BC3 Thoroughbreds, former general manager at Richmond Football Club and current Gold Coast Suns general manager
• John Brocklebank — Horse whisperer from US involved in BC3 Thoroughbreds
• Joe Zaiter — Convicted cocaine importer who purchased a share of Pillar of Hercules with Vlahos. The horse was previously owned by Horty Mokbel, the brother of underworld figure Tony Mokbel