Vincenzo Tesoriero defence, denies knowledge of alleged Forum fraud

Vincenzo Tesoriero files his defence to Westpac’s case, claiming he knew nothing about fraud and any funds he received were returns on investments.

Bill Papas at Xanthi Arena in Greece in 2021

Forum figure Vincenzo Tesoriero has denied he knew anything about or took any role in an alleged lease scheme that saw $500m defrauded from a suite of banks.

In court filings Mr Tesoriero has responded to a litany of allegations levelled against him by Westpac, which is seeking to pursue him and his former business partner Bill Papas for almost $300m they allege was defrauded from it.

Westpac has taken aim at Mr Papas and Mr Tesoriero in the Federal Court alleging the two men masterminded an alleged fraud that saw funds lent by the bank to the Forum Group of companies to fund the acquisition of equipment that was to be leased to Australian and New Zealand businesses.

However, Westpac alleges the equipment did not exist and was never purchased with the funds lent allegedly instead used by the two men to fund a lavish lifestyle and bankroll a sprawling property empire.

Mr Papas has denied the allegations, however he has not returned to Australia from Greece and a warrant has been issued for his arrest by the Federal Court after he allegedly breached a freezing order on his assets.

Mr Tesoriero and Mr Papas founded the Forum Group of companies, however Mr Tesoriero resigned from his role as director of the businesses in the group in April 2020.

Westpac alleges the funds it lent to fund the alleged lease fraud were not transferred to the Forum Group of companies and were instead sent to a separate corporate entity called Forum Finance.

Forum Finance was allegedly the recipient of almost $100m from French bank Societe Generale and Japanese lender Sumitomo Mitsui Banking Corporation.

However, Mr Tesoriero did not resign as a director of Forum Finance.

In his 147-page defence Mr Tesoriero repeatedly states he “does not know and therefore does not admit” many of Westpac’s claims.

However, he admits he was a director of Forum Finance “until about late June 2021” but that Mr Papas had “executive management and control” of the business.

He repeatedly denies he was “a co-conspirator in the Scheme Agreement, or any other conspiracy with Mr Papas, Forum Finance or any other entity”.

Mr Tesoriero also denies “that the predominant corporate purpose of Forum Finance” and Forum Group Financial Services, “was to carry into effect the Scheme”.

He also denies that he “procured or permitted Forum Finance to pay amounts received by it from Westpac away to third parties”.

However, Mr Tesoriero alleges funds that did flow to him were a return on investments he made in the Forum Group of companies over several years.

Mr Tesoriero alleges he invested $6.86m into the Forum group of companies between 2013 and 2017.

The liquidators of the Forum Group, McGrathNicol have taken aim at Mr Tesoriero, alleging he built his large property holdings using funds acquired through Forum Finance and Forum Group Financial Services. .

However, Mr Tesoriero denies entities that he controlled were “created to hold property that was financed in part through amounts improperly obtained”.

An affidavit of Mr Tesoriero’s assets reveals he held property assets worth $60.7m across 31 holdings.

McGrathNicol moved to wind up nine companies owned by Mr Tesoriero in mid-April, after alleging those companies were recipients of funds derived from the alleged fraud.

However, he admits that entities linked to him did receive funds but “does not know and therefore does not admit that amount was money (or the traceable proceeds of money) stolen from Westpac”.

Mr Tesoriero said if he also did not open bank accounts that saw money paid into them “and was not aware of any such payments at or around the time they were made”.