Forum Finance an ‘audacious fraud’, court finds
Westpac has won its attempt to recover hundreds of millions of dollars in stolen funds from fraudsters operating under the Finance Forum group.
Former businessmen Bill Papas and Vincenzo Tesoriero masterminded an “audacious” fake lease-loan scheme to defraud a trio of banks more than $500m, a court has found, opening the way to potential recovery action against the men and criminal charges from police.
In the Federal Court on Friday Justice Elizabeth Cheeseman found Papas was the “principal” mastermind of the fraud, finding his partner Louise Agostino was also party to the fraud.
Justice Cheeseman also found Papas’ business partner Vincenzo Tesoriero and the former financial controller of the business Tony Bouchahine also had knowledge of the fraud.
The court found companies controlled by the men had no "legitimate” purpose other than to carry out the fraud and disperse "tainted” funds.
Papas and Tesoriero have faced a three-year court slog as Westpac dragged the two men and their alleged co-conspirators through at least 138 court appearances and actions and three judges.
It came after a routine exercise by West Australian mining operator WesTrac queried almost $12m of loans written up in Westpac’s books as tied to equipment leases held by the equipment business.
WesTrac had thought it had entered into agreements to finance only one printer-photocopier with the Sydney-based Forum, in a deal worth $1.6m and which had been fully paid out early in 2021.
The scandal sparked an investigation within Westpac, which bankrolled Forum’s sprawling rental business, with the bank quickly discovering fake invoices for equipment worth more than $290m across big name customers including Coles, Woolworths, and waste disposal giant Veolia.
In the days after the first rumours of a problem Papas fled the country, breaching Australia’s strict border controls slammed shut during the Covid-19 pandemic.
The Forum Group boss and chairman of the Sydney Olympic A-League football club flew to Greece, staying at a luxury hotel in Athens before making his way north to Thessaloniki where the businessman had built a mini-empire of assets including a manufacturing site, and several apartments.
As investigations progressed, triggering raids on his house and several properties controlled by Papas and Tesoriero, Papas refused to return to Australia despite repeatedly assuring the courts he would face the accusations being levelled by Westpac.
Federal Court judge Michael Lee, who heard much of the matter as Westpac chased down assets squirrelled away by the co-conspirators, issued an arrest warrant for Papas.
Despite this Papas has remained in Greece, while Tesoriero has been trapped in Australia after his passport was seized.
In a notebook seized in the searches, Papas laid out his plans noting his intentions to flee if ever discovered.
Liquidators McGrathNicol revealed, through a deep dive into the complex and interlinked Forum Group of Companies, as well as several other related entities, revealed almost $500m had been siphoned from Westpac, as well as Japanese lender Sumitomo Mitsui Banking Corporation as well as French lender Societe Generale.
Forum had concocted a series of false lease loan schemes, also selling the future earnings of these fake contracts.
The company never missed a payment.
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