Federal Court throws out Vincenzo Tesoriero’s request for $2m-plus lift in Forum Finance defence case funding

Vincenzo Tesoriero, an alleged co-conspirator in Forum Finance’s fraud against Westpac, has been denied his request for an increase of more than $2m in funds to pay for his defence.

A property in Caulfield North owned by Vincenzo Tesoriero, whose assets have been frozen by the court. Picture: Aaron Francis

The Federal Court has dealt businessman Vincenzo Tesoriero, an alleged co-conspirator in Forum Finance’s fraud against Westpac, a blow by dismissing his request for an increase of more than $2m in funds to pay for his defence.

Judge Tom Thawley dismissed several applications by Melbourne-based Mr Tesoriero, including a request for $3.8m to be freed up to fund the case’s defence. Mr Tesoriero has $1.25m currently available to fund his case, given his assets and bank accounts have been frozen by the court, as Westpac pursues him and Forum Finance boss Bill Papas for alleged fraudulent conduct.

“I am not satisfied that the estimate of $3.8m is one which reflects an appropriate amount having regard to the competing interests of the parties,” Justice Thawley said, noting the costs of Mr Tesoriero’s defence would have increased markedly because of several changes to his legal representatives.

“Noting the absence of sufficient material to determine exactly how the amounts were calculated, some of the amounts appear excessive.”

Justice Thawley said he would not allow $616,282 in proceeds from the sale of luxury yacht XOXO be used to help fund Mr Tesoriero’s case, given the entities that owned it were in liquidation. He also ruled that properties entangled in the case – or proceeds from their sale – were not to be used by Mr Tesoriero’s camp, as that would lead to “further depleting” of assets that were the subject of proprietary claims.

Vincent Tesoriero. Picture: Chris Pavlich

Westpac and two other banks are separately pursuing Mr Papas in the Federal Court for about $400m over claims he used Forum to issue false and fraudulent equipment finance invoices. Those invoices were allegedly issued for equipment that often didn’t exist. Westpac alleges Mr Tesoriero was involved in coming up with the fraudulent scheme.

But he disputes the allegations, previously telling the court he did not become aware of the claimed fraudulent conduct by Mr Papas until court action was started by Westpac last year.

Justice Thawley also dismissed an application by Mr Tesoriero and his father, who is also a respondent in the case, to have parts of Westpac’s case struck out.

Mr Tesoriero’s barrister Anthony McInerney argued there was an “asymmetry of knowledge” between Mr Papas and Mr Tesoriero and there were no facts to substantiate Westpac’s claim that they both set up and administered the fraudulent equipment leasing scheme.

Mr McInerney said there was likely a mixing of clean and unclean money, potentially linked to the alleged fraud.

Justice Thawley said he disagreed with Mr Tesoriero’s interpretation and dismissed the striking out application, but ordered the bank provide further particulars in relation to its allegations, if they were requested.

Forum Finance boss Bill Papas.

The hearing is set to begin in February next year and run for about three weeks. That follows a delay which saw judge Michael Lee recuse himself from the matter due to a complaint by Mr Tesoriero arguing Justice Lee had a biased opinion of his case.

Justice Lee handed Mr Tesoriero $1.25m to fund his case against Westpac earlier this year, but warned he did not want to see him returning to the court to again top up his legal fund.

On Monday, Justice Thawley shied away from pushing the parties to mediate.

“I’m not inclined on what I know now to order mediation … and I encourage the parties to discuss between themselves how any useful result could in fact be obtained from a mediation,” he said.

Mr Papas is residing in Greece and has not engaged in the case for about a year. He did hire defamation lawyer Rebekah Giles and issued a statement noting he did intend on addressing the matters alleged by Westpac, but hadn’t had an opportunity to resource his case.

Justice Thawley said Vincenzo Tesoriero and his father should file any amended defences to the case by the month’s end, and ordered them to pay costs relating to the interlocutory application.