Federal Court issues arrest warrant for Forum Finance’s Bill Papas in Greece

A court calls time on alleged fraudster Bill Papas’s Greek stay amid an investigation into Forum Finance’s missing $400m.

Forum Finance founder Bill Papas was last spotted by journalists at one of his apartments in Thessaloniki, Greece.

Westpac has secured Federal Court orders for the arrest of alleged fraudster Bill Papas in Greece, after a judge said Mr Papas “repeatedly disobeyed” court orders and was seeking to avoid being served with key legal documents.

Federal Court Judge Michael Lee on Wednesday made the order for the warrant, arrest and detention of Forum Finance founder Mr Papas, and cited an extradition treaty between Australia and Greece.

“I’m satisfied that I should issue a warrant … I’m satisfied there is power,” Justice Lee said.

“There is no basis, let alone a reasonable basis, for thinking that Mr Papas is likely to return from Greece to Australia on any firm date,” he added.

“His conduct in relation to this proceeding has been a less than satisfactory one. He has repeatedly disobeyed court orders for the filing of material and provided less than satisfactory information to his solicitors. “It might be an exercise in masterly understatement to suggest the conduct of the proceedings on his behalf has not been consistent with the overarching purpose.”

Greek-Australian businessman Bill Papas in Thessaloniki, Greece.

Court documents have showed Mr Papas flew to Greece in June after missing a meeting in Perth to answer questions from customer WesTrac about its accounts. Westpac lodged its civil proceedings against Mr Papas in late June and they became public in early July, and more recently the bank was seeking a criminal order that Mr Papas was in contempt of court and had breached a freezing order on his assets. “It is quite clear on the evidence that the ­material suggests he (Mr Papas) is not seeking to actively engage with the proceedings,” Justice Lee said. The judge also made reference to the court making the Australian Federal Police aware of the arrest order.

Westpac, French bank Societe Generale and Japan’s Sumitomo Mitsui Banking Corporation have separately lodged Federal Court cases against Forum entities, Mr Papas and his fellow Forum director Vincenzo Tesoriero.

The three civil cases amount to total claims of $400m in fraud, ­allegedly conducted via forged signatures and fake invoices for equipment leases.

In earlier hearings, Mr Papas first pledged via his legal team to return to Australia and face the legal action and provided details of an itinerary for flights back. That was before his legal team provided the court a positive Covid-19 test and saying he was too ill to return. Following that, Mr Papas said caps on international arrivals to Australia had made it too expensive for him to purchase a plane ticket to return.

Mr Papas and his lawyer have parted ways and he also disabled a personal email account that the banks were using to contact him, leading to solicitor Rocco Panetta being compelled to provide the court a Greek mobile number for his former client.

On Wednesday, the court heard from Westpac’s barrister Jeremy Giles SC who said that given the contempt of court charge had no maximum penalty, it should meet criteria under Australia’s extradition order.

He also highlighted several luxury hotel stays by Mr Papas in Greece, as he argued a statement to the court by Mr Papas that he could not afford a return flight to Australia was incorrect.

Forum Finance director Bill Papas with Liverpool FC managing director and chief commercial officer Billy Hogan.

The court heard of transactions by Mr Papas in Greece including a luxury hotel stay in Athens and then at the Danai beach resort.

The cheapest suite at the Danai resort is listed as €475 ($739) per night, and Mr Papas racked up a bill of $6300 there, while at the hotel in Athens his bill for a short stay was $4371.

“I can conclude from the American Express materials that he is not, as it were, living on his uppers,” Justice Lee said.

“It appears the Qatar Airways flight from Paris, it doesn’t look like he was at the back of the plane let’s put it that way.”

Justice Lee said Mr Papas’s ­argument of lack of funds was “difficult to reconcile” with his conduct, including business class travel to Greece, staying in “somewhat luxurious” accommodation in Athens ahead of a stay at a beach resort.

The court also heard Mr Papas had breached the freezing orders put in place over his assets after transaction records showed he had transferred $150,000 and $570,000 to his cousin Eric Constantinidis.

Mr Constantinidis, chief executive of data storage company Our Kloud, bought a batch of Forum’s printer leases from administrators on July 22.

Mr Papas had placed Forum into administration on July 8 with Mackay Goodwin just a day before Westpac tried to place the business into liquidation.

Separately, NSW’s Financial Crimes Squad acted on a referral by the police and last month started a formal investigation into Forum Finance and Mr Papas, amid serious allegations of fraud made by Westpac and the other banks. NSW Police referred the inquiries to the Financial Crimes Squad in late July.

The now liquidator of a long list of Forum equities, McGrathNicol, has begun selling assets as it seeks to retrieve funds for creditors. The court imposed freezing orders on Mr Papas on June 28, the same day orders were made to search Forum’s office, and Mr Papas’ Rozelle Sydney home and Wagstaffe holiday house.

Records show Mr Constantinidis served as director and secretary of the Forum Group of Companies between July and ­August 2011 when the company was established.

Westpac had earlier clashed with Our Kloud after the bank’s lawyers attempted to gain access to Forum’s records from the data firm five times between June 30 and July 6 but were not granted access until Justice Lee ordered they be handed over.

The Forum case has also ­embroiled Eric Constantinidis’s brother Bill, founder and CEO of Lending Association, with records of his company Natave subpoenaed. The entity was registered on June 30 this year, but moves were made in September to strike the company off.

Paul Hayes QC, acting for Mr Tesoriero, on Wednesday said his client would challenge attempts by liquidators to wind up three companies linked to the Forum figure. Mr Hayes told the court Mr Tesoriero maintained the three entities “may be solvent”, holding $8m to $10m in assets, and noted his client was also looking at making claims “which might involve other parties being drawn in”.

“As far as Mr Tesoriero’s concerned, his primary concern at the moment is the matter of his ­defence,” Mr Hayes said.

“Unlike Mr Papas, he’s here to face the music.”

However, Nick Kidd, acting for McGrathNichol, said the companies were “hopelessly insolvent” and Mr Tesoriero had already been granted three weeks to put on evidence against their wind up.