A tale of loss, fraud and economic destruction. In my view, the system does not work.
I seek to make no inference about any party nor do I draw any conclusion from these simple statements of fact.
Up until December 2013, I was a modestly successful property developer; real estate sales marketer; and finance broker.
In November 2013, I introduced a good client of mine, James Taylor, to an accountant Salvatore Arcuri who traded at Norwest.
On 23 November 2013, Arcuri fraudulently authored the ASIC portal for my company and misappropriated approximately $200,000 from James Taylor by diverting money to a bank account that Arcuri had illegally opened in my company name.
Taylor has never recovered his money and is financially ruined as a result.
Arcuri then approached an investment company in Melbourne known as Rockcliffe Pty Ltd and fraudulently misrepresented to them certain things and as a result, he and James Photios who was CEO of a private finance fund known as Mezecorp Pty Ltd (now in liquidation) again illegally tampered with the ASIC portal in relation to my company with the effect that Photios alleged that he somehow had become both sole director and shareholder of my company.
As part of this illegal conduct,in April 2014, James Photios and his solicitor Richard Licardy lodged a false statutory declaration with the Land Titles Office of New South Wales and the Land Titles Office in Victoria by which they attempted to obtain the issue of new and replacement title deeds to the various blocks of land owned by my companies.
On 28 February 2014, I approached ASIC and reported these various illegal acts.
ASIC advised me that they could not correct these illegal acts and that I needed to apply to the Supreme Court of New South Wales.
These legal proceedings were subsequently commenced.
During the lead up period, in April 2014, I became aware of an email issued between Arcuri and Photios by which both of the set out their scheme to defraud various creditors of my company by taking such steps as they could not to repay them including taking the land security titles owned by my company and in some instances held on behalf of third party lenders, to their own advantage.
My financial partners then took steps to appoint Deloitte as external administrators to my companies.
I learned that the purpose of this was in order to properly deal with the fraudulent acts as it is initiated by Arcuri and others against my companies.
Those court proceedings have continued in the Supreme Court of New South Wales and continue in one form or another to this day.
I understand that the costs of the various lawyers and the external administrator’s costs now exceed $4 million.
Worse than this, a number of innocent third party lenders have lost all their money as a result of the attack on my companies and the security that had been offered to these parties.
In about July 2014, Photios appointed O’Neill Partners, Sydney based solicitors, to act in these matters.
By 14 August 2014, O’Neill Partners knew that the affidavit sworn by Photios in the Supreme Court proceedings in which he deposed that he had validly held a meeting of shareholders and directors of my company was true and correct when he knew it to be false and his solicitors knew it to be false by at least 14 August 2014.
Notwithstanding, the court proceedings continued.
I believe that the proceedings were brought from no motive other than malice and to cause financial disadvantage and loss to me and my financial partners. I believe that this action is a crime under the New South Wales Crimes Act.
By December 2014, I supported an attempt at mediation. Because of the terms of confidentiality of mediation, I am unable to disclose those negotiations other than to say that the Photios parties were simply not prepared to negotiate on any sensible basis and basically continued with their claim over all my companies’ assets and land titles.
In December 2014, I was encouraged by Deloitte and their solicitors Russells to enter into a Deed of Authority authorising them to deal directly with the land assets of my companies in order that a secured creditor (a former friend of mine) Brian Dean might be repaid.
That Deed of Authority set out the basis upon which monies would be received and dealt with and allowed for the cost of sale in relation to those lots to be deducted and the balance then accounted to Brian Dean.
Since that time, over $1.7 million of land sales have been realised and contrary to the Deed of Authority, no monies have been paid to Brian Dean other than to Deloitte and their legal advisers.
This is an outrage.
In August through to October 2014, I agreed that O’Neill Partners might act for me in defence of an action brought against me by one of the mortgagees to my companies. I was aware that a summons had been served upon me. O’Neill Partners agreed to appear in defence of those proceedings in the District Court.
Without telling me, they did not appear.
It was not until April 2015 that I learned that a default judgment had been obtained against me and as a result that I was declared bankrupt.
Given the various events that have taken place, I am of the view that O’Neills did not appear on my behalf deliberately in order that I would be unable to take legal action in any way against anybody once a bankrupt. I have taken steps (unsuccessfully) to have my bankruptcy terminated. I simply do not have the money to do this.
Because of the pressure brought upon me, my marriage ended and it has caused enormous personal loss and put my two children under terrible pressure.
Despite the wrongdoing by Photios and others which was clear from the admissions made in August 2014, without notice to any creditor, in May 2015, Deloitte settled with O’Neill and Photios and others giving them a full release from all and any cost obligations that they might have.
The net effect of this was that all and any costs that might otherwise have been recovered from their side now became a cost of the companies and could possibly be deducted from the net proceeds of sale of my companies’ assets before any distribution might be available to others.
When people talk about the costs of these proceedings, they need to be put in proper context.
For example, when Deloitte have letters typed up and/or typed up reports, the charge out rate for a typist is $X per hour. That is an outstanding $XXX per annum!
Therefore, external administrators and liquidators, no matter how credible have little interest in settling matters expeditiously because their alleged ‘costs’ are in reality enormous profit centres.
For example, in the case above, I imagine a competent typist is employed for say $60,000 per annum. Then being charged at $XXX per annum, leaves an enormous profit which becomes a burden on creditors and shareholders.
My creditors and those associated with my company now face the very real and bleak prospect of a total write-off.
It is inexcusable and inexplicable that terms of settlement were entered into with the opposition side given the fraud and illegality associated with the claims made.
It should be noted that Arcuri who initiated the first frauds that started this matter is now serving time in prison.
And now, some 32 months later, there has been substantial realisation of my companies’ assets and other than paying Deloitte and their solicitors Russells and despite the promises and commitment set out in the Deed of Authority, not one penny has been paid to anybody else.
I have written to Senator Williams who I know has a very great interest in corporate regulatory; fraud and corporate fraud matters and particularly an interest in the insolvency industry.
I followed the rules, every step of the way. The documentation that I signed bound me to my commitments.
I assisted in reporting matters to the New South Wales Police and to the corporate watchdog, ASIC.
I participated in and supported Supreme Court proceedings.
On two occasions, when I thought the only way of ever seeing these matters settled was to in fact try and work with the ‘other side,’ I did just that.
I can now see that I was completely set up and used - and the system let us down.
The court system, the corporate watchdog, the big end of town professionals all let me down too, and I can now see that the system is simply structured so that everyone makes money out of it except the people whose money was and is at risk.
I will not rest until these matters are brought to the public attention and properly scrutinised.
In this horrible process, I did, however, meet some good people.
Some people who I believe do want to create a system that works.
People who have stuck by me.
But, on the other hand, there are others who are simply driven by shocking greed and engage in any conduct deceptive, misleading or whatever to further their own commercial interests.
Deloitte Reviews
A tale of loss, fraud and economic destruction. In my view, the system does not work.
I seek to make no inference about any party nor do I draw any conclusion from these simple statements of fact.
Up until December 2013, I was a modestly successful property developer; real estate sales marketer; and finance broker.
In November 2013, I introduced a good client of mine, James Taylor, to an accountant Salvatore Arcuri who traded at Norwest.
On 23 November 2013, Arcuri fraudulently authored the ASIC portal for my company and misappropriated approximately $200,000 from James Taylor by diverting money to a bank account that Arcuri had illegally opened in my company name.
Taylor has never recovered his money and is financially ruined as a result.
Arcuri then approached an investment company in Melbourne known as Rockcliffe Pty Ltd and fraudulently misrepresented to them certain things and as a result, he and James Photios who was CEO of a private finance fund known as Mezecorp Pty Ltd (now in liquidation) again illegally tampered with the ASIC portal in relation to my company with the effect that Photios alleged that he somehow had become both sole director and shareholder of my company.
As part of this illegal conduct,in April 2014, James Photios and his solicitor Richard Licardy lodged a false statutory declaration with the Land Titles Office of New South Wales and the Land Titles Office in Victoria by which they attempted to obtain the issue of new and replacement title deeds to the various blocks of land owned by my companies.
On 28 February 2014, I approached ASIC and reported these various illegal acts.
ASIC advised me that they could not correct these illegal acts and that I needed to apply to the Supreme Court of New South Wales.
These legal proceedings were subsequently commenced.
During the lead up period, in April 2014, I became aware of an email issued between Arcuri and Photios by which both of the set out their scheme to defraud various creditors of my company by taking such steps as they could not to repay them including taking the land security titles owned by my company and in some instances held on behalf of third party lenders, to their own advantage.
My financial partners then took steps to appoint Deloitte as external administrators to my companies.
I learned that the purpose of this was in order to properly deal with the fraudulent acts as it is initiated by Arcuri and others against my companies.
Those court proceedings have continued in the Supreme Court of New South Wales and continue in one form or another to this day.
I understand that the costs of the various lawyers and the external administrator’s costs now exceed $4 million.
Worse than this, a number of innocent third party lenders have lost all their money as a result of the attack on my companies and the security that had been offered to these parties.
In about July 2014, Photios appointed O’Neill Partners, Sydney based solicitors, to act in these matters.
By 14 August 2014, O’Neill Partners knew that the affidavit sworn by Photios in the Supreme Court proceedings in which he deposed that he had validly held a meeting of shareholders and directors of my company was true and correct when he knew it to be false and his solicitors knew it to be false by at least 14 August 2014.
Notwithstanding, the court proceedings continued.
I believe that the proceedings were brought from no motive other than malice and to cause financial disadvantage and loss to me and my financial partners. I believe that this action is a crime under the New South Wales Crimes Act.
By December 2014, I supported an attempt at mediation. Because of the terms of confidentiality of mediation, I am unable to disclose those negotiations other than to say that the Photios parties were simply not prepared to negotiate on any sensible basis and basically continued with their claim over all my companies’ assets and land titles.
In December 2014, I was encouraged by Deloitte and their solicitors Russells to enter into a Deed of Authority authorising them to deal directly with the land assets of my companies in order that a secured creditor (a former friend of mine) Brian Dean might be repaid.
That Deed of Authority set out the basis upon which monies would be received and dealt with and allowed for the cost of sale in relation to those lots to be deducted and the balance then accounted to Brian Dean.
Since that time, over $1.7 million of land sales have been realised and contrary to the Deed of Authority, no monies have been paid to Brian Dean other than to Deloitte and their legal advisers.
This is an outrage.
In August through to October 2014, I agreed that O’Neill Partners might act for me in defence of an action brought against me by one of the mortgagees to my companies. I was aware that a summons had been served upon me. O’Neill Partners agreed to appear in defence of those proceedings in the District Court.
Without telling me, they did not appear.
It was not until April 2015 that I learned that a default judgment had been obtained against me and as a result that I was declared bankrupt.
Given the various events that have taken place, I am of the view that O’Neills did not appear on my behalf deliberately in order that I would be unable to take legal action in any way against anybody once a bankrupt. I have taken steps (unsuccessfully) to have my bankruptcy terminated. I simply do not have the money to do this.
Because of the pressure brought upon me, my marriage ended and it has caused enormous personal loss and put my two children under terrible pressure.
Despite the wrongdoing by Photios and others which was clear from the admissions made in August 2014, without notice to any creditor, in May 2015, Deloitte settled with O’Neill and Photios and others giving them a full release from all and any cost obligations that they might have.
The net effect of this was that all and any costs that might otherwise have been recovered from their side now became a cost of the companies and could possibly be deducted from the net proceeds of sale of my companies’ assets before any distribution might be available to others.
When people talk about the costs of these proceedings, they need to be put in proper context.
For example, when Deloitte have letters typed up and/or typed up reports, the charge out rate for a typist is $X per hour. That is an outstanding $XXX per annum!
Therefore, external administrators and liquidators, no matter how credible have little interest in settling matters expeditiously because their alleged ‘costs’ are in reality enormous profit centres.
For example, in the case above, I imagine a competent typist is employed for say $60,000 per annum. Then being charged at $XXX per annum, leaves an enormous profit which becomes a burden on creditors and shareholders.
My creditors and those associated with my company now face the very real and bleak prospect of a total write-off.
It is inexcusable and inexplicable that terms of settlement were entered into with the opposition side given the fraud and illegality associated with the claims made.
It should be noted that Arcuri who initiated the first frauds that started this matter is now serving time in prison.
And now, some 32 months later, there has been substantial realisation of my companies’ assets and other than paying Deloitte and their solicitors Russells and despite the promises and commitment set out in the Deed of Authority, not one penny has been paid to anybody else.
I have written to Senator Williams who I know has a very great interest in corporate regulatory; fraud and corporate fraud matters and particularly an interest in the insolvency industry.
I followed the rules, every step of the way. The documentation that I signed bound me to my commitments.
I assisted in reporting matters to the New South Wales Police and to the corporate watchdog, ASIC.
I participated in and supported Supreme Court proceedings.
On two occasions, when I thought the only way of ever seeing these matters settled was to in fact try and work with the ‘other side,’ I did just that.
I can now see that I was completely set up and used - and the system let us down.
The court system, the corporate watchdog, the big end of town professionals all let me down too, and I can now see that the system is simply structured so that everyone makes money out of it except the people whose money was and is at risk.
I will not rest until these matters are brought to the public attention and properly scrutinised.
In this horrible process, I did, however, meet some good people.
Some people who I believe do want to create a system that works.
People who have stuck by me.
But, on the other hand, there are others who are simply driven by shocking greed and engage in any conduct deceptive, misleading or whatever to further their own commercial interests.
Sadly, the system that we have is broken.