Home / Local / Former Winley MD slams fraud recovery failure
25 May 2020
The former Director and MD of Perth authorised representative company Winley Insurance Group has criticised the authorities for failing to track down the perpetrators of an $8.69 million fraud which led to the company’s collapse in 2016.
Jeff Bailey told insuranceNEWS.com.au that “innocent people” have been pursued while those responsible for misappropriating the money from the company trust fund have been able to walk away.
As reported by insuranceNEWS.com.au last week, liquidator RSM Australia Partners’ second and final report makes clear that there will be no payment to creditors as only a fraction of the money was recovered.
Mr Bailey and CFO Nickolas Rapos paid $165,000 between them following court-ordered mediation, and just over $100,000 had previously been recovered from a company bank account.
“I was a director, I understand that,” Mr Bailey said. “But they are happy to have a go at the people who have stayed here, and nobody is interested in trying to find those responsible.
“ASIC has bigger fish to fry and the police are a joke.
“You can’t tell me that they can’t find them with today’s technology. It’s completely and utterly wrong.”
WA Police declined to comment on whether a criminal investigation has ever been launched.
But insuranceNEWS.com.au understands it has not – and that after reviewing information provided by the liquidator in 2017 officers decided it was better handled by the Australian Securities and Investments Commission (ASIC).
ASIC previously banned Mr Bailey permanently from the financial services industry, but have refused to confirm whether any further action is planned.
RSM Partner Neil Cribb told insuranceNEWS.com.au that although the claim against Mr Bailey and Mr Rapos was for the full amount of misappropriated funds, "this does not mean the money went into their pockets”.
A previous RSM report names Chandanie Godwin and Michael Kapilovsky as possible de facto Winley directors, and Steven Godwin as a shadow director.
Mr Cribb says claims were not submitted against those individuals “because we don’t know where they are”.
“They are overseas somewhere. We don’t have any funds and it is not the liquidator’s role to go chasing people endlessly.”
Asked where he thinks the money went, Mr Cribb replied: “Into a big black hole – we would suggest overseas.”
He noted a $5.17 million loan from Winley to a company called Private Equity Fund Pty Ltd, which has not been repaid.
“We would question whether that was really a loan,” he said.
Winley’s known liabilities totalled $3.31 million, and insurance companies are among those owed money.
Mr Cribb told insuranceNEWS.com.au he believed many affected insurers “haven’t bothered claiming” due to payment of a dividend being unlikely.