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The business partners accused of scamming Westpac and other banks out of nearly $400 million allegedly used tens of millions of dollars of that money for a property-buying spree, funnelling it into high-end residential properties in the Melbourne and Sydney areas and a string of petrol stations in small Victorian towns.
Federal Court Justice Michael Lee described the alleged scam by Bill Papas’ Forum Finance as “a long-running, calculated and elaborate fraud that would rank high in the catalogue of corporate malfeasance. The company allegedly used phony invoices and forged signatures to obtain Westpac loans without the consent of at least seven of the bank’s corporate customers, according to a report by The Sydney Morning Herald.
Westpac has taken action in Federal Court to freeze the assets of the Forum companies, Papas, and his partner Vincenzo Tesoriero. Papas is reportedly in Greece, and said he has not returned to Australia to face the allegations due to a positive COVID-19 test.
The Herald has reported that entities set up by Tesoriero purchased several petrol stations – most for more than $1 million – in small country towns in Victoria in 2019 and 2020. One station in Violet Town – a municipality with a population of only 1,540 people – was bought for $3.5 million.
Those entities also bought a bait-and-tackle shop with petrol pumps in Mallacoota and petrol stations in other tiny town including Ouyen (population 1,045), Derrinallum (population 557), Dimboola (population 1,424), Taradale (population 448), and Lake Boga (population 985), the Herald reported.
The transactions applied only to the land the businesses sit on; the actual stations are owned by a corporate entity with no affiliation with Tesoriero, Papas, or Forum Finance, the Herald reported.
Tesoriero’s companies made many of the purchases from Melbourne lawyer Konfir Kabo, who is a well-known commercial property investor.
Westpac has also obtained freezing orders over a $7.95 million home in Hawthorn’s Scotch Hill precinct and a waterfront home in Wagstaffe on the Central Coast. The bank also has freezing orders over an industrial lot in the Melbourne suburb of Clayton that is owned by Tesoriero’s company, 14 James Street Pty Ltd.
Many of the entities are linked to trustees that hold the properties on behalf of fixed unit trusts, the Herald reported. Westpac has obtained freezing orders over the companies that own those properties as part of its legal action against Forum Finance.
However, many of the properties are already caveated back to Kabo’s business interests – meaning any attempt by Westpac to repossess them would need to have his blessing, the Herald reported.
Sources told the newspaper that the caveats were filed as part of a vendor financing agreement between Kabo and the Forum directors at the time of the sale. The sales were reportedly never fully completed because the repayments under the agreement weren’t fulfilled. All of the caveats were lodged before any fraud had come to light, the Herald reported.
Tesoriero’s companies used these property purchases to obtain millions from ANZ, Judo Bank and National Australia Bank through mortgages. It was unclear whether those mortgages are still being serviced, according to the Herald.
Ryan Smith is currently an executive editor at Key Media, where he started as a journalist in 2013. He has since he worked his way up to managing editor and is now an executive editor. He edits content for several B2B publications across the U.S., Canada, Australia, and New Zealand. He also writes feature content for trade publications for the insurance and mortgage industries.
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