A young accountant tells the Federal Court he wasn’t surprised when Westpac and other lenders accused Forum Finance of scamming millions
A junior accountant at Forum Finance who wrote an internal email warning of a “Ponzi scheme” allegedly orchestrated by Forum boss Bill Papas told the Federal Court that he was working under the orders of Forum’s chief financial officer.
Forum and Papas have been accused of using phony documents and forged signatures to defraud Westpac of about $300 million in loans. Two other banks – France’s Société Générale and Japan’s Sumitomo – have also leveled fraud allegations, bringing the total alleged fraud to $400 million.
Brandon Chin, a 28-year-old accountant at Forum, told the court on Tuesday that he had asked Forum CFO Tony “Moussa” Bouchahine why the company was paying customer invoices rather than asking the customers to do it themselves, according to a report by The Sydney Morning Herald. Chin said he was told the issue would be resolved.
Chin made the statement during public examinations into the collapse of Forum Finance following the revelation of the alleged fraud. He has not been accused of any wrongdoing, and was giving evidence to aid liquidators from McGrathNicol in their investigation.
Counsel for liquidators said that Chin had been able to observe Papas’ alleged fraud firsthand and showed a range of documents including unusual accounting notes and emails, the Herald reported. The notes included an email Chin sent following Forum’s collapse that described how existing invoices were being paid using money from new contracts. Counsel for liquidators Nick Kidd SC had earlier said that Chin’s email described a “Ponzi scheme.”
Chin said that it was “not a complete surprise” to him when Forum was accused of being involved in a large-scale fraud.
Asked why he thought that, Chin said, “Just that no customer was ever charged. That there was always that gap that never got solved. I always had in my head that it would eventually be solved, but … it most likely never would have been solved and [the] customer not invoiced.”
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“Because what you’re saying is because you were a junior employee, you had concerns which you didn’t realise at the time indicated an elaborate fraud was being undertaken,” Kidd asked Chin. “Vut now, it seems clear to you that that was what was happening?”
“More so, yes,” Chin said.
Chin said that based on what he had read in the press, he believed Papas was involved in the alleged scam, but couldn’t definitely say that Bouchahine was, the Herald reported.
“Do you think Mr Bouchahine may have shared your innocent understanding of these arrangements, do you?” Kidd asked.
“I don’t believe I have enough knowledge or evidence to say a more definitive answer,” Chin said.
Earlier in the examinations, Chin explained that Forum’s unusual accounting processes had been designed by Bouchahine, the Herald reported.
