Win for banks over fugitive’s ‘audacious’ $500m fraud

October 11

Disgraced entrepreneur and prominent soccer identity Bill Papas was on a plane to Greece soon after Westpac and two other banks discovered a more than half-billion-dollar fraudulent scheme.

Associates from the Forum group of companies, which were headed by Papas, were left to clean up the mess he left after the firms used falsified equipment finance invoices to rip off the lenders.

The fraud on Westpac, SMBC and Societe Generale lasted from August 2018 until June 2021, when it was finally uncovered.

The former Sydney Olympic chair and Xanthi FC owner left for Greece around this time.

On Friday, Federal Court Justice Elizabeth Cheeseman found an “audacious” fraud against the duped financiers had been comprehensively established.

About $341 million was defrauded from Westpac in Australia, $NZ58 million ($A52 million) from Westpac in New Zealand, $113 million from SMBC and $9 million from Societe Generale.

Forum’s customers, who the group claimed would lease the equipment, included a string of well-known firms.

Papas, the principal perpetrator, owned the corporate entities through which tainted funds were channelled and had a character that was “effective in deflecting and redirecting attention”, Justice Cheeseman said.

“He used that skill in conjunction with the veneer provided by the extensive forgery and falsification of the relevant commercial documents, to perpetuate the concealment and continuance of the fraud,” she said.

“The attributes and skills of Mr Papas that I have identified are readily recognised as the key performance indicators of many a fraudster.”

The banks allege the funds were used to purchase property, holiday homes, yacht storage, luxury cars, race cars, racehorses, jewellery and Xanthi FC, which has competed in the top- and second-tier Greek professional soccer leagues.

A string of Australian players and coaches were lured to the club during Papas’s tenure, including now-Socceroos boss Tony Popovic – who was subsequently dumped from his Xanthi coaching role after only a handful of games.

Papas has a warrant out for his arrest on a charge of contempt issued during the Federal Court proceedings.

In her 365-page judgment, Justice Cheeseman found Papas’ partner Louisa Maria Agostino, fellow Forum director Vincenzo Frank Tesoriero and former chief financial officer Moussa “Tony” Bouchahine also had knowledge of the fraud.

The trio argued they did not know of Papas’s scheme while they were working for Forum.

Ms Agostino, who was employed as Forum’s business solutions manager, followed her partner to Greece in July 2021 and has not returned to Australia.

In a notebook seized from Forum’s Sydney office during a search warrant, Papas wrote out a “mud map” of the fraudulent scheme and referred to his “overseas escape”.

“Tell Vince everything you need to tell him,” he wrote.

The tainted funds were first channelled to Forum Group Financial Services (FGFS) and then to companies owned by Papas in Australia, New Zealand, Greece and the United Kingdom, Justice Cheeseman said.

“FGFS does not appear to have carried on a legitimate business other than to facilitate the dispersal of the tainted funds to the beneficiaries of the fraud,” she wrote.

While nearly $130 million was repaid to the banks, these were “cloaking payments” that prolonged the period of time the fraud went undetected, the judge said.

Liquidators have been appointed to most of the companies in the Forum group and they have traced where the defrauded funds were sent.

Corporate entities owned by Mr Tesoriero will also be liable to repay the banks.

The matter will return to court on October 28 when a hearing on relief will be scheduled.

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