Prosecutors knew Steve Barrett extortion case key witness was a liar

Extortion charges against Steve Barrett were dropped after revelations that the key witness against him was a serial liar – and prosecutors had known all along.

Steve Barrett outside the NSW Supreme Court in Sydney. Picture: NCA NewsWIRE, Monique Harmer

Commonwealth prosecutors pursued extortion charges against crime reporter Steve Barrett despite warnings from the Australian Federal Police that the principal witness against him was such a serial liar and fabricator of evidence that investigators had refused to continue taking statements from him.

Emails obtained by The Australian reveal senior police officers recommended that the AFP reject a request by prosecutors to obtain a statement from their star witness, property developer Daniel Hausman, because he was not considered “a witness of truth”.

All charges against Mr Barrett were sensationally dropped by the Commonwealth Director of Public Prosecutions (CDPP) on Friday after revelations about the extraordinary web of lies spun by Mr Hausman.

Mr Barrett had been accused of blackmailing the Plutus tax fraud syndicate in a joint effort to extort $5m from the scam’s mastermind Adam Cranston but his trial ended in a hung jury in May 2021.

In one email sent on 28 August 2020, eight months before Mr Barrett’s trial, AFP Detective Sergeant Morgen Blunden said his team had already discontinued taking a statement from Mr Hausman because he was “untruthful”, “unreliable”and at times “incoherent”.

Sergeant Blunden said that taking the statement “would compromise the credibility and reputation of the AFP”, and noted that Mr Hausman’s own lawyer had acknowledged his lack of credibility as a witness.

“The team feels taking a statement and calling Hausman as a witness is a significant risk to the prosecution,” Sergeant Blunden said.

But jurors in Mr Barrett’s trial were never shown the AFP’s assessment of Mr Hausman’s credibility because the reports were ruled to be inadmissable.

Since Mr Barrett’s trial, Mr Hausman has been found to have lied repeatedly in other proceedings, including at the trial of Plutus conspirator Sevag Chalabian in February last year, and in a compulsory Proceeds of Crime examination in May last year.

The prosecution’s principal witness, property developer Daniel Hausman. Picture: NCA NewsWire / Joel Carrett

The Plutus syndicate defrauded the tax office of more than $100m from 2014 to 2017 through a free payroll service that shifted tax liabilities to a network of second-tier companies. But the conspirators were being blackmailed by Hausman and others with the threat of exposure.

Mr Barrett was alleged to have made threats on behalf of the blackmailers but on Friday NSW Supreme Court judge Natalie Adams ordered that Mr Barrett’s proposed retrial be dropped after a direction from the CDPP.

In his submission for an end to proceedings, top silk Greg Woods KC, who represented Mr Barrett pro bono, argued that allowing Mr Hausman to give evidence would be “an affront to justice and would bring the administration of the legal system into disrepute”.

Following Mr Barrett’s trial in 2021, Mr Hausman gave evidence in the trial of Mr Chalabian in early 2022, admitting to numerous lies about his contact with Mr Barrett.

Dr Wood said Mr Hausman “appears to have lied wherever it suited his purpose of the moment”, pointing out that the property developer had received a 25 per cent reduction in his jail sentence for giving evidence.

“In reality, it was only after Hausman realised that the evidence against him personally was overwhelming that he did his deal with the authorities to obtain a reduced sentence,” Dr Wood said.

There were more lies at a compulsory Proceeds of Crime examination into the whereabouts of the missing money from the extortion attempt. That hearing revealed Mr Hausman had breached restraining orders by dealing with his supposedly frozen assets, including cash and property, a criminal enterprise concealed from the court during Mr Barrett’s trial.

Outside the court, Mr Barrett’s solicitor Andrew O’Brien hailed the move to drop the charges as an important decision for the freedom of press in Australia, but was critical of the actions of police and prosecutors.

Steve Barrett with his lawyer at the Supreme Court in Sydney Picture: NCA Newswire / Monique Harmer

Mr O’Brien said Mr Barrett was acting in his role as a journalist when, before the Plutus fraud came to the attention of authorities, he became aware that there could be a big story in the offing, but before he could break the story was himself arrested by police.

“Thirteen months after this the authorities decided to charge Steve Barrett, even though they knew that he was a working journalist and has been seen on TV screens around Australia for decades breaking stories of crime and corruption.

“The prosecution of this journalist has caused much pain and suffering by way of a severe impact on his mental and physical health, and his financial position. The prosecution (now correctly but belatedly abandoned) has badly damaged his good reputation,” he said.

The CDPP did not respond to questions put by The Australian.