Salim Mehajer the untouchable?

The authorities are handling Auburn’s Salim Mehajer with kid gloves.

On Friday morning, September 12, 2014, Ahmad Yaseen, then 25, took the stand at the Federal Court in Sydney, on bustling Phillip Street in the heart of the city.

He knew there was trouble afoot. He was there because a property development company run by his good friend and boss — the soon to be notorious councillor of western Sydney’s Auburn, Salim Mehajer, whose opulent wedding 11 months later drew ­national attention — had collapsed and the liquidators, noting serious ­irregularities, had called for an ­investigation.

Among the legitimate creditors of SM Project Developments was the Australian Taxation Office, which was owed at least $890,000 in unpaid taxes, and dozens of small creditors including builders and subcontractors.

But there was a problem.

The liquidator had called those contractors and most of them ­had denied being owed anything at all. A few were extremely angry.

The court heard that 20 fraud­ulent “proofs of debt” had been created, with signatures forged in each case.

The practice of creating fake creditors is surprisingly common in the building industry — it has the effect of vastly reducing the amount of money the failed ­company is required to repay to actual creditors.

Yaseen was the general manager of Mehajer’s group of development companies, a “right-hand man” and “good friend” of the flamboyant property developer.

Under questioning, he said it was he who had created the false creditor claims. He had fabricated 20 claims and forged signatures in each case and admitted the matter was “very serious”.

The liquidator in the case, ­Anthony Wayne Elkerton, following the law, lodged a detailed ­report with NSW Police.

Now, more than two years later, neither NSW Police nor any other regulatory body has taken action over the forgeries.

NSW Police and the Australian Securities & Investments Commission have each argued that the other is responsible for taking ­action since The Australian first raised the issue with them in ­November last year.

Experts say the matter is moreone for NSW Police, although either body could easily take ­action in what is a cut-and-dried case of fraud aimed at short-changing legitimate creditors.

To the surprise of the local community, Mehajer and several of his close associates have repeatedly skirted any serious penalties, despite showing an apparent disregard for the law. That trend ­appears to be continuing with the public inquiry into the Auburn Council — launched in February this year when the council was sacked — understood to be taking a soft-touch approach.

Counsel assisting the inquiry, Paul Bolster, recently delivered his initial report to all inquiry participants and it is understood to contain little hard-hitting material, suggesting Mehajer and his fellow suspended Auburn councillors could be permitted to run for council again.

The process is that after public hearings have been completed, the counsel assisting prepares a ­detailed report on his findings. He provides that report to all inquiry participants, providing them with a right of reply. Then a second ­report containing those responses is handed to the inquiry head, who uses it to form a final report.

The Auburn inquiry was launched to investigate the close relationships between developers and councillors, after Mehajer’s opulent wedding in August last year brought the national spotlight to Auburn.

Mehajer and fellow Auburn councillor Ronney Oueik are two of the biggest property developers in the area. In the past few months alone the pair have stood to gain $30 million from council rezonings over properties they own.

The Australian understands that Bolster’s report, which is not yet public, does not call for property developers to be banned from serving on local councils.

This stance echoes that of the NSW government, which has said it has no plan to prevent the practice.

In NSW, the matter is particularly jarring because in the state property developers are barred from making political donations — but they are allowed to serve in government. Cynical observers have noted the present state of ­affairs simply represents “cutting out the middleman” in the influence process.

While councillors are pre­vented from voting on zoning ­decisions that may benefit their own properties, their colleagues on the council are permitted to vote in their favour.

In Auburn it is alleged the “Super Six” of highly pro-development councillors, who include the property developers ­Mehajer and Oueik and real estate agent mayor Le “Lilly” Lam, had voted as a bloc, almost always supporting each other’s development pro­posals or rezonings.

Not that that law was always followed.

Mehajer was found to have ­failed, on three occasions in 2012 and 2013, to tell Auburn Council that he owned a building at 3 Mary Street, Auburn, while he voted for rezoning the area to allow for denser and taller buildings.

The rezoning went through and this year Mehajer sold the ­undeveloped building, which he had bought for $3.65m in 2012, for $8m to the Auburn developers, the Raad property group — a $4.35m windfall.

In January, the NSW Civil and Administrative Tribunal suspended Mehajer for four months over the breach.

But the penalty had almost no ­impact — the ­entire council was suspended the following month and the finding against him was later overturned on appeal.

Rather than preventing property developers from being councillors, it is understood Bolster has recommended only that councillors publicly disclose this interest at election time, potentially opening the door to similar scandals.

After receiving a string of traffic infringements while driving his luxury cars, including his Ferraris and Mercedes-Benz, Mehajer has complained that NSW Police is targeting him.

He’s right, or was right at least. Last year NSW Police had established a “watching brief” on the property developer.

This watching brief — which has resulted in a string of traffic ­infringements, several of them spurious and thrown out of court — is particularly embarrassing for NSW Police, given it has failed to take action even in the straight­forward case of the fraud by his general manager, Yaseen.

In August, Sydney’s Burwood Local Court threw out a fine for talking on a mobile phone while driving because Mehajer produced a “credible” witness providing evidence to the contrary.

In October last year Mehajer was issued with a defect notice for driving his brand new, $250,000 G63 AMG four-wheel-drive Mercedes-Benz.

Police had alleged the car was not roadworthy because its factory standard exhaust pipes faced out from the side of the car at the back rather than from the rear.

The case was rejected when Mercedes-Benz produced a letter showing the exhausts fully complied with Australian standards.

“Dear Commissioner,” Mehajer wrote on his public Facebook page in response, “Those that are carrying the respected NSW Police Force badge are continuing to make a fool not only of themselves, but of our country.”

In July The Australian revealed Mehajer and his father, Mohamad, had allegedly transferred more than $20m offshore.

There is nothing illegal about sending money offshore but the transfer was understood to have attracted the attention of NSW Police because of its size and the controversy surrounding the ­Mehajer family.

The Australian understands money-tracking agency Austrac showed little interest in the transaction, despite Mehajer still owing the ATO more than $1.1m in ­unpaid taxes.

Queried by The Australian about the funds transfer, Mehajer said his personal and company transactions “are carried out under strict legal advice” and ­always at “arm’s length”.

Mohamad Mehajer, Salim’s ­father, is no stranger to the law ­either: he has been the subject of police attention was sentenced in 2013 to 3½ years in ­prison for fraud.

In 2008, in a bid to keep SM Project Developments afloat, he unsuccessfully attempted to bribe a bank ­employee with $2000 to approve a loan and overstate by 30 times the income of the development company.

Cleaner Anping Yan is one of many people and companies chasing Mehajer through the courts.

Yan, who is Chinese and speaks very little English, claims Mehajer owes him $25,000 for cleaning work he carried out between September 2013 and July 2014 on two of the property developer’s apartment towers.

Yan says he only ever dealt with Mehajer; however, Mehajer says the work was done for a company he was not a director of, Advanced International Developments.

Advanced International Dev­el­op­ments lists its business address as 77 Carlingford Street, Sefton — the same small commercial building in western Sydney where many of Mehajer’s businesses are registered. One of the registered owners of ­Advanced Inter­national Developments at the time was Ahmad Yaseen.

From December last year ­Mehajer removed himself as a ­director of all of his companies, handing the reins to family, friends and his then wife, Aysha.

Two months ago it emerged ASIC had banned him from managing corporations for three years because of his “incompetence” and because it found his business conduct “lacked commercial ­morality”.

The ban was suppressed by the court while Mehajer contested the ruling.

He was unsuccessful. Regardless, he remained the 100 per cent owner of almost all of his companies and will be permitted to legally regain control in November 2018.

Observers note the biggest legal headache for Mehajer is a string of charges of electoral fraud brought by the Australian Federal Police.

The AFP alleges Mehajer forged 76 documents before the 2012 Auburn Council election, when he was successfully elected.

It is alleged he submitted 76 electoral enrolment forms to the Australian Electoral Commission four weeks before the election in the names of other people.

Allegedly fraudulent electoral records lodged by the AFP in ­Sydney’s Downing Centre Local Court claim seven members of Mehajer’s family live in a three-bedroom rented unit and that 19 people with the surname “Kanj” moved into more than a dozen different ­Auburn homes weeks ­before the election.

The forms allegedly contain forged signatures along with false claims those people lived in ­Auburn’s “second ward”, which Mehajer was contesting.

Mehajer denies any wrong­doing. The charges are very serious and carry a maximum penalty of 10 years in prison.

Regardless, the AFP has ­appeared reluctant to take action.

It was provided a brief on the matter by the Australian Electoral Commission in 2012 but only launched legal action in December last year amid the public controversy surrounding Mehajer.

The Auburn property deve­loper has said he is unfazed by the charges, telling Fairfax Media that if there was anything in it, the AFP would have taken further action.

“If their case was strong, they would of (sic) not let me sit a day on council,” he said.

“I sat four years as deputy mayor; so why didn’t they act earlier when the case was open and when I personally contacted the AFP many times in 2012, 2013 and 2014 to take this matter seriously and deal with it as a priority?”