Court hears Forum Finance alleged fraud almost busted after Maia Financial questioned claims

Bill Papas allegedly put himself at the centre of a plan that saw him pursued by a trio of financiers over more than $450m in fake leases, in what may prove Australia’s biggest bank fraud.

Vince Tesoriero, left, and his lawyer as they leave the Federal Court in Sydney on Monday. Picture: Jane Dempster

Bill Papas allegedly put himself at the centre of a financing plan that saw him pursued by a trio of financiers over more than $450m in fake leases, in what may prove Australia’s biggest bank fraud.

But Mr Papas’s alleged fraud scheme was nearly discovered after the Forum Group founder’s earlier lenders questioned dodgy paperwork and unusual payment structures, the Federal Court has heard.

Mr Papas and his former Forum Group business partner Vincenzo Tesoriero, and their associates, are at the centre of a three-week trial launched by Westpac, Sumitomo Mitsui Banking Corporation and Societe Generale, which have lobbed claims of a systemic fraud stretching over years.

But despite warrants out for his arrest and orders to serve him via high-profile defamation lawyer Rebekah Giles, the former Forum Group managing director failed to attend.

The court heard Mr Papas had not engaged with the case, which alleges the Greek-Australian businessman concocted plans to defraud banks, drawing up a plan with him at the centre in April 2018.

The court was shown copies of Mr Papas’s notebook, seized after Westpac raided the Forum Group’s North Sydney offices, which he allegedly drew featuring his initials in a circle at the centre of the plan.

Arrows then flowed from Mr Papas to two boxes: False Contract and Advanced Funding of Contracts.

Justice Elizabeth Cheeseman heard Mr Papas’s alleged plans, which were drawn up in April 2018, allegedly suggested the fraud be perpetrated on the Forum Group’s previous lenders Maia Financial, not the trio of financiers now dragging the company and his former business partner Mr Tesoriero through the courts.

However, Westpac alleges the plan showed Mr Papas and Mr Tesoriero knew the nature of the alleged fraud.

“Tell Vince everything you need to tell him,” Mr Papas allegedly wrote.

Westpac’s senior counsel Jeremy Stoljar said although he didn’t have the benefit of knowing Mr Papas’s thinking, the intention of the diagram was reasonably clear.

“What’s contemplated is false contracts would be prepared and they could be used for advanced funding of contracts,” he said.

“Monies advanced in relation to false contracts would be used to fund other transactions in due course.”

Bill Papas has failed to return to Australia to face the first day of hearings into the alleged Forum Finance Fraud.

The court heard Mr Papas had noted he would use some of the funds “here and overseas” and that if he were discovered he could “escape overseas”.

“We will be respectively submitting in due course that supports the inference that Vince was told everything,” Mr Stoljar said.

The first two days of the case will focus on Westpac’s $350m claim, before fellow lenders Sumitomo Mitsui Banking Corp and Societe Generale will take up their claims against the Forum figures.

The banks claim Forum Finance ran a years-long lease and loan fraud scheme, which saw money change hands to fund contracts for equipment that never existed.

Sumitomo Mitsui said it was owed $88m, while Societe General claims almost $10.2m from the alleged Forum fraudsters

The court heard Mr Papas’s alleged fake lease scheme was nearly revealed by the Forum Group’s former financiers Maia Financial, which aggressively questioned repeated serial numbers and unusual payment structures in 2018.

Justice Cheeseman was shown emails from Maia Financial which showed the relationship with the Forum Group quickly fracturing after Mr Papas denied the lenders access to documents which may have revealed the alleged fraud.

The court heard Mr Papas allegedly faked signatures from multiple businesses on loan documents. But the alleged fraud continued after the Forum Group agreed to settle with Maia Financial and pay the $58m owing, after Mr Tesoriero personally guaranteed the balance.

This saw the Forum Group sign up to Westpac via loan agents EQWE.

Justice Cheeseman heard Mr Papas and Mr Tesoriero allegedly financed a vast array of luxury cars, houses, almost 50 petrol stations, a yacht, jet skis, caravans, and a Greek football team with the allegedly defrauded funds.

Mr Tesoriero denies Westpac’s claims, while Mr Papas has made public statements claiming no knowledge of the allegations.

Mr Papas failed to appear despite a warrant having been issued for his arrest. The former Forum figure initially engaged with the court process, after Westpac froze his assets, but he failed to return from Greece, where he had travelled in June just days before Westpac revealed the alleged fraud.

Justice Michael Lee issued a warrant for Mr Papas’s arrest in October 2021, after he allegedly breached freezing orders by transferring his cousin Eric Constantinids $720,000 from an account on the Macrovue trading platform. Mr Constantinidis, who settled with Westpac after the bank sought to claw back the funds, purchased the Forum Group of companies from administrators after Mr Papas placed the business into administration after Westpac launched action against him.

The court heard orders were made to serve Mr Papas via defamation lawyer Rebekah Giles and his former lawyer Rocco Panetta.

However, neither Mr Papas nor his partner Louise Agostino, who Westpac claims assisted in the alleged fraud, attended court.

Mr Papas’s Greek business associate, Anastasios Giamouridis has made an attempt to block Westpac’s claim, alleging the almost $10.4m in bank claims were legitimate expenses to fund the manufacture of waste processing machines.

Justice Cheeseman noted the huge number of parties made the case increasingly unwieldy.

“I haven’t gone through and traced who’s not here,” she said.

The case continues.