Five-star luxury for Kathy Jackson trustee Paul Leroy missing with $2m

A Sydney bankruptcy trustee stayed at several luxury city hotels shortly before disappearing with $1.9m in funds for the Health Services Union misappropriated by Kathy Jackson.

Paul Leroy has been Kathy Jackson's bankruptcy trustee since 2015.

A Sydney bankruptcy trustee stayed at luxury city ­hotels shortly before disappearing overseas with almost $2m that he was meant to give the Health Services Union, compensating it for money misappropriated by convicted fraudster Kathy Jackson.

The Australian can reveal that Paul Leroy stayed at two five-star Marriott hotels – the Sheraton Grand opposite Sydney’s Hyde Park and the recently opened W Sydney at Darling Harbour – when he withdrew $1.9m and then left the country.

The hotel stays have surfaced following The Australian’s report on Monday that Mr Leroy has been referred to police and the insolvency regulator for allegedly “stealing” the money from an NAB bankruptcy trust account with funds recovered from Ms Jackson’s bankruptcy.

Mr Leroy’s stays at top Sydney hotels before jetting overseas – despite having a residence in the city’s eastern suburbs – has fuelled fears inside the HSU that the bankruptcy trustee could have already spent some or all of the $1.9m owed to the union.

Mr Leroy first stayed at the Sheraton Grand, which advertises standard rooms for $606 a night and executive suites for $759. Shortly before jetting overseas late last year, he stayed at the W Sydney with “marine chic” rooms for $609 and “Wow suites” for $3527.

The HSU is still recovering fin­ancially from scandals over the past decade involving former union officials Ms Jackson, Michael Williamson and Craig Thomson. All three were convicted of thieving large sums of union members’ money to finance lavish lifestyles.

Mr Leroy, 58, is a former partner with insolvency firm Hall Chadwick and more recently an employee at Mackay Goodwin.

While growing up in Sydney and educated at St Aloysius College Milsons Point and at Macquarie University, Mr Leroy also has extensive ties to Belgium.

His late father, Albert Leroy, was chancellor of Belgium before moving to Australia and retiring at Cherrybrook in Sydney’s northwest.

Continuing his father’s links to Brussels, Mr Leroy was Belgian honorary consul in Sydney for seven years until 2021. He is reportedly related to Belgium’s wealthy Leroy family, which owns a chain of DIY retail stores across Europe.

Late Sydney barrister David Rofe with Kathy Jackson.

For many years, Mr Leroy lived at South Coogee with his then wife, Caroline.

After 28 years with Hall Chadwick, he quit during an acrimonious dispute with fellow partners in 2018 and started a solo insolvency business called Integrated Accounting Solutions. When that company fell on hard times during the Covid pandemic, Mr Leroy was hired by Mackay Goodwin chief executive and former Hall Chadwick alumnus Dom­enic Calabretta.

HSU lawyers at Slater & Gordon have taken the first steps to recover the missing $1.9m with a successful application to the Federal Court to freeze assets owned by Mr Leroy and appointing two replacement bankruptcy trustees for the Jackson case, Fabian Micheletto and Michael Carrafa from SV Partners.

The Inspector-General in Bankruptcy has cancelled Mr Leroy’s registration as a bankruptcy trustee over his failure to maintain professional indemnity insurance cover.

The HSU wants the Albanese government to urgently bolster its efforts to locate Mr Leroy and recover the missing money by providing assistance from the Attorney-General, Home Affairs and Immigration departments.

HSU national president and NSW general secretary Gerard Hayes said the HSU undertook a decade ago to hold people accountable for misappropriated funds, fed up with the conduct of some past leaders who had used union money for personal benefit.

“We have shown we were prepared to pursue Thomson, Williamson and Jackson and now we will be pursuing Mr Leroy,” he said. “The governance of our organisation is second to none, and we will pursue every opportunity to recoup members’ money.”

Mr Leroy’s failure to maintain indemnity insurance as a bankruptcy trustee could jeopardise the HSU’s hopes of recovering funds. Insolvency sources said insurance even if it was available covered only negligence, not alleged fraud, and the HSU might need to pursue the case with Mackay Goodwin as Mr Leroy’s employer, responsible for account supervision and annual reporting.

The $1.9m owed to the HSU, previously held by Mr Leroy in an NAB bankruptcy trust account that he controlled, was part of a $2.4m debt owed by Ms Jackson to the union for past misappropriation of funds. The money was recovered from an inheritance Ms Jackson received from Sydney barrister David Rofe.