A formal investigation has begun into Forum Finance and its founder Bill Papas amid allegations of fraud.
NSW’s Financial Crimes Squad is acting on a referral by the police and is investigating $400 million fraud made by Westpac and two other banks.
The Financial Crimes Squad was first alerted to fraud allegations linked to equipment leases in late July, and the investigation will be pursued and could lead to charges being laid.
“Detectives attached to State Crime Command’s Financial Crimes Squad are investigating,” a NSW Police spokeswoman told The Australian on Monday. “No further information is available.”
There are separately lodged legal cases against Forum entities and its owners by Westpac, French bank Societe Generale and Japan’s Sumitomo Mitsui Banking Corporation. Allegations concern forged signatures on equipment leases where finance was sought to purchase goods that often didn’t exist. Westpac also took its allegations to NSW Police, the banking regulator and the Australian Securities and Investments Commission ahead of its Federal Court pursuit of Mr Papas and Forum.
Luke Price, Chief of EQWE commercial broker and consulting group reported the fraud allegations to North Sydney Police Station after inconsistencies in Forum accounts following internal audits.
Mr Papas is currently in Greece where he has been since 21 June.
He failed to show up at a Perth meeting on 15 June to give explanations concerning the allegations.
There have been suspicions that Mr Papas has made hundreds of thousands of dollars worth of transfers from his business to personal bank accounts in the four weeks before Westpac lodged court action.
Liquidators of Forum entities have already sold several parts of the group. Liquidator McGrathNicol is reportedly selling about 300 waste digester machines that were within the premises of customers and a similar number that are being housed in a Sydney warehouse. Private hospitals and other establishments are understood to have the machines, however if a buyer is not secured for all the machines, an option may be to auction the machines in the warehouse.
The assets of Mr Papas and his partner are the subject of freezing orders.