The Directors and CEO of Westpac are facing a likely criminal investigation after Lawyers acting on behalf of fraud victims Lisa Anne Lambert and Thomas Patrick Hayes made a formal complaint to Detective Inspector Aurthur Katsogiannis who is the Commander of the NSW Police Force Cybercrime Squad.

The complaint centers around the Directors and CEO knowingly covering up a multi-million-dollar fraud. If you conceal a crime that is a crime in itself. Internal Westpac emails show senior executives knew about the fraud but did nothing and failed to report the fraud to the police.

A copy of the first 2 pages of the complaint to the NSW Police is below. (Click here to read a full copy of the complaint)

14 June 2018

Detective Inspector Aurthur Katsogiannis APM

Commander

Cybercrime Squad NSW Police Force

1 Charles Street

Parramatta NSW 2124

Dear Detective Inspector Katsogiannis

RE:   WESTPAC BANKING CORPORATION (“WBC”)

          BREACH OF SECTION 316 CRIMES ACT 1900 NSW

I act for Lisa Anne Lambert and Thomas Patrick Hayes

I am writing to report, what ought properly be considered to be an offence committed under section 316 of the Crimes Act 1900.

The matter relates to the conduct of the WBC senior executives, its Chairman and CEO and their failure to report a very serious multimillion dollar finance fraud committed against the WBC on the 13 November 2006 and arguably perpetrated in Sydney.

The crime surrounds a $6.8 million advance by WBC to a twice convicted criminal. The advance was a finance and property fraud and the monies were provided based on a sophisticated property scam which is dealt with in the attachments and news articles.

The loan was advanced by WBC to a registered corporation, Knight Property Investments Pty Ltd, which company had as its sole director, Mario Michael Girardo (Girardo).

At the time the advance was made Girardo had been convicted of fraud in Qld on 14 December 2001 and was disqualified from managing a corporation. This was likely an offence under the Corporations Act section 206A. He was subsequently jailed for 4 ½ years extortion and other serious crimes in 2011 in the Southport Magistrates Court.

The loan had the effect of financing Girardo and thereby allowed him to proceed with further property frauds. Ultimately, he went on to defraud my clients in two property transactions. These frauds had a severe financial impact on them and their families and left them destitute.

My clients have written to WBC on numerous occasions since 2010 strongly urging them to report the frauds and its perpetrators to the authorities, and they have, to date, failed to do so.

My clients then sought the assistance of Gold Coast MP Dr Alex Douglas. Dr Douglas MP wrote directly to the Chairman of WBC and espoused his very serious concerns over the matter. Once again, a Westpac executive wrote back to Dr Douglas essentially dismissing the claim, apart from acknowledging that WBC bankrupted Girardo. A copy of Dr Douglas MP’s letter to Westpac dated 7 March 2013 and Westpac’s reply to him dated 26 March 2013 are attached.

The Missing $869,183.69

The attached settlement statements from Ingwersen Lansdown Solicitors show, in Item 14, that the balance of money advanced by WBC was to be paid into Delaneys Lawyers Trust Account (the Balance of the Loan).

During my Clients pursuit of the truth behind the frauds, I wrote to Delaney Lawyers in December 2016 to ascertain what happened to the Balance of the Loan. I received a Trust account ledger from Delaneys showing an amount of $869,183.69 was paid to Sebastian Muscolino. A copy of my email to Delaneys dated 22 December 2016 and their reply on 23 December 2016, which reply attached their trust account ledger, is attached.

Mr Muscolino has denied ever receiving any money even though he was due to be paid $3.5M as part of the transaction which he deposes to in statutory declarations sworn on 7 February 2017 and 16 October 2013. A copy of his Statutory Declaration sworn on 7 February 2017 (the Statutory Declaration sworn on 16 October 2013 is at Attachment A to it) is attached.

This money remains unaccounted for and the party to whom the trust account cheque was ostensibly written, namely Mr Muscolino, has no idea as to its whereabouts.

They have recently been enlivened by the FCRC and the exposure of the general conduct of the banks including WBC.

I raised the alleged breach of section 316 by me letter to WBC’s CEO, Brian Hartzer, on 4 November 2016. However, the allegations were obviously denied by the solicitors for WBC, Allens Linklaters by their letters to me commencing on 17 November 2016. A copy of the relevant correspondence between myself and WBC and their solicitors is attached without the attachments to them which are available on request.

There is evidence that WBC’s senior executives admitted to the fraud in internal memos however, to date they have failed to report it, despite it being brought to the attention of multiple parties including the Chairman and CEO.

Yours faithfully

LILLAS & LOEL LAWYERS

James Loel

End.

In March 2013 the Queensland State MP Dr Alex Douglas wrote twice to Westpac Chairman Lindsay Maxsted outlining his concerns with the alleged fraud and Mr Maxsted did nothing. 

In March 2014 I wrote an email to Westpac CEO Gail Kelly as per below:

Dear Mrs Kelly

I am writing to you in relation to the fraud at Westpac that has been concealed by a number of Westpac employees. There is admission of the fraud in internal Westpac documents that are in my possession. The employees that have concealed the fraud include Chairman Lindsay Maxsted, John Murphy, Stuart Meager, Matt Sainsbury, and others.

If you look at attachment “Westpac admit fraud” it says:

“Please proceed against Girardo towards bankruptcy ASAP as it is obvious the bank has been subjected to some type of fraud in the original lend and loss will be significant.”

At the bottom of the attachment you will see a document from Allens Arthur Robinson lawyers explaining one element of how the fraud worked, which was getting an inflated property valuation so the purchaser could get an inflated and fraudulent loan.

Then if you look at attachment “Westpac admit staff involvement in fraud” where Westpac manager Greg McLachlan says in relation to the actions of Westpac employee Matt Sainsbury:

“whether there is a need for disciplinary action” and “It is concerning that the word of a non panel valuer and the purchaser have been given more credence then one of the Banks Panel Valuers especially given the very large difference between the two and it being an out of territory lending situation. The final two paragraphs of Shaynes email should also have been a clear warning supply of such accommodation was high and that some care in accepting the valuation provided was required.”

It is clear fraud had taken place and that Westpac had been defrauded. The fact that there has never been a complaint to the police for the fraud itself shows a cover-up by Westpac staff.

Matt Sainsbury’s conduct, which at best is disgraceful and at worst criminal, says there should have been a complaint to the police for fraud. Once again the fact there has been no complaint to the police shows a clear cover-up.

A highly likely hypothesis is that Mario Girardo bribed Matt Sainsbury and/or others at Westpac to get the $6.8 million loan and paid $5million for the unit and Mr Girardo pocketed the $1.8million balance. The original loan grew with further loans to $7.8 before Westpac sold the unit for $3.5 million and Westpac lost $4million and I am told Westpac lost another $11 million plus on other loans to Mr Girardo. It must be noted that Mr Girardo was on remand for extortion which was in the media at the time Westpac made a number of loans to him. He was also banned by ASIC from being a company director when some of the loans were approved by Westpac. Neither the ASIC banning or criminal charges facing Mr Girardo seemed to bother Westpac staff and they continued to loan him money.

What I find extremely disturbing is the two letters in relation to the same failing of Westpac to make a complaint to the police. One letter is written on behalf of the Westpac Chairman Lindsay Maxted (see attachment: Lindsay Maxted cover-up letter) which clearly implicates him in the cover-up. The other letter is written by Gary Johnston is December 2011. (See Attachment: Gary Johnston Westpac cover-up letter) The main relevant difference of the two letters is one line in Mr Johnston’s letter which says:

“The Queensland police also advised that there is no need for Westpac to lodge a complaint of its own at this stage, although it was open to Westpac to do so if it chose to”

This line raises a few issues:

1. It is not believable a police officer would say “there is no need for Westpac to lodge a complaint” given it was a $4million fraud. Can Mr Johnston name the police officer who gave that advice?
2. If the police officer did say “it was open to Westpac to do so if it chose to” in relation to making a complaint then why did Westpac not make a complaint. Who at Westpac decided not to complain to the police in relation to the $4 million lost by Westpac from fraud by Girardo. Have Westpac sacked them? If not, why not? It is so obvious a cover-up by Westpac staff.
3. Westpac have a large legal team and external lawyers who were already looking at the issue and they would have known that they needed to make a formal complaint to the police given it was a $4 million fraud and as there was at the very least evidence that suggested that Matt Sainsbury was part of the fraud as the attachments show. Whether he was knowingly part of the fraud is something the police should have investigated.
4. Why did Lindsay Maxsted leave the line out of his letter. Quite simply Mr Maxted would have known the line is a lie as it stands out a mile and that Westpac had an obligation to make a complaint of fraud to the police.

The above issues are currently part of a court proceedings involving Patrick Hayes. I am a journalist and investigate crime and to me the fact that the court proceedings are taking place is further evidence of the cover-up of the fraud. It is my understanding that counsel representing Westpac have already been caught deliberately misleading the court in evidence to try and cover-up the fraud.

Can you please advise what action you intend on taking and when you intend taking it. Do you intend calling the police and making a formal complaint and standing down Westpac staff until the matter is fully investigated?

I make a very serious allegation against Lindsay Maxsted in this email which is supported by the attached documents. Will you raise this allegation with the Westpac Board?

I look forward to your reply

Regards

Email end.

I received a very dodgy response from Westpac as per below.

Former CEO Gail Kelly’s letter (Click here for a PDF version which is better quality than below)

I followed up the above 2014 email with an article titled “Westpac CEO Gail Kelly knowingly conceals fraud at the bank court documents and emails show” and said:

“Westpac CEO Gail Kelly and Chairman Lindsay Maxsted are up to the neck in concealing fraud by staff at Westpac. I have the documents to prove it including internal bank emails and an email sent to me on Mrs Kelly’s behalf which is in effect an admission. Both Gail Kelly and Lindsay Maxsted should be in jail for concealing a serious indictable offence.“

Westpac have a new CEO Brian Hartzer who has been in the job since February 2015, so the corruption has persisted on his watch.

Things have changed greatly since 2013 and 2014 so the likelihood that the NSW Police will take action is a lot greater now and the Westpac Board and CEO should be worried. We now have a Banking Royal Commission that has put the spotlight squarely on corruption in the Banks and their cover-ups so Detective Inspector Aurthur Katsogiannis has no excuse not to investigate fully and lay charges where appropriate.

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