HE WAS brash and brilliant. A young lawyer from Melbourne who became a rising star of the public service, hand-picked to serve as assistant tax commissioner by the age of 30.
That was until a spectacular fall from grace left Nick Petroulias jailed for using his plum position to do the very thing he was tasked with stamping out: defrauding the tax office.
Since his release from prison in 2010, Mr Petroulias has kept a low profile, going by a number of aliases including Michael Felson and Nick Petersen.
He described himself as a “disabled pensioner” on bankruptcy forms in 2015, with his debts estimated at an eye-watering $104 million.
But Fairfax Media can reveal that he has been accused of working behind the scenes to dupe a wealthy Chinese property developer into the illegal purchase of $12.6 million of Aboriginal land across Newcastle.
The matter is the subject of a Supreme Court legal battle that veteran lawyers have described as one of the most extraordinary cases they have seen in their careers.
Labelled by a lawyer familiar with the case as a real-life version of “Alice in Wonderland”, its cast of characters includes an international fugitive known as Robbie Rocket, a convicted drug dealer and a dead company director who somehow continued signing agreements a year after he was cremated in a Sydney cemetery.
The existence of an international money laundering syndicate and a karaoke junket intended as a bribery attempt are among the other sensational allegations contained within thousands of pages of evidence that have been tendered to the court.
THE $12 MILLION DEAL
The saga began two years ago, when Chinese developer Tony “Shuxin” Zong was courted as a potential buyer for vacant land belonging to the Awabakal Aboriginal Local Land Council.
On offer was 46 hectares of bushland with subdivision potential at Warners Bay, along with three lots in Waratah’s Braye Park.
Collectively, the lands were valued at $12.6 million.
Two Awabakal board members met with Mr Zong. At the negotiating table, they introduced him to Mr Petroulias – an agent for the parties involved – and Knightsbridge North Lawyers, a firm enlisted to broker the deal.
The only catch, Mr Zong was informed, was that the portfolio of land had already been sold to another buyer a year beforehand.
But he was assured that in return for a payment, that purchaser would remove themself from the picture.
By the end of the year, things appeared to be proceeding smoothly.
Mr Zong had signed sales contracts, begun pursuing the land’s rezoning and outlaid nearly a million dollars – money he believed was a combination of a deposit and a payout for the former buyer.
But then came a shock announcement that threatened to derail the transaction: the state government had launched an investigation into the land council.
The investigation followed complaints about the land council’s governance and finances.
But Mr Zong alleges he was reassured the deal was still on a steady footing. He claims to have been told by Mr Petroulias that “there was no reason arising from the investigation that would compromise the validity of the transaction documents”.
However, damning findings from the government’s investigator resulted in the land council being placed into administration. Then, the confirmation came: the sale was off.
Mr Zong ordered the immediate repayment of his $1 million, but his demands were refused. His property development companies – Sunshine Property Investment Group and Sunshine Warners Bay – launched a civil claim for damages and to recoup the losses.
Caught in the legal crossfire was the land council, its law firm Knightsbridge, and the land’s original buyer, a mysterious company registered under the name Gows Heat.
AWABAKAL STRIKES BACK
Since it was placed into administration last year, the Awabakal land council has been under the control of Terry Lawler, a prominent Newcastle financier and philanthropist awarded an OAM in January.
Mr Lawler has recruited a high-powered legal team – including top silk Jeremy Kirk SC – to defend the land council and launch a cross-claim.
They have argued that the sales contracts Mr Zong signed were bogus and none of the proceeds found their way into the land council’s coffers.
Under state legislation, all land sales by Aboriginal land councils must be ticked off by their voting members and board, as well as the NSW Aboriginal Land Council.
But the two Awabakal representatives involved – former board members Richard Green and Debbie Dates – allegedly agreed to the land deals without having secured those approvals, meaning they were “void” and “unenforceable” in the eyes of the law.
It’s understood some Awabakal members were stunned to learn of the attempts to sell off the land when the court action came to light.
On Friday, Mr Green said the reason Awabakal members were not informed about Mr Zong’s proposal was because the board had already knocked it back.
He was yet to see the court documents, but denied ever signing any sales contracts for the land.
“I make it my business never to put my signature on anything,” Mr Green said. “It’s all been blown out of proportion.”
Mr Green said he was unaware of Mr Petroulias’ criminal background during the negotiatons, but he didn’t view it as an issue.
“I believe people should get second chances. I don’t discriminate against that.”
Former Awabakal chairperson Debbie Dates claimed she never received any money from Mr Zong, and any agreement she signed would have only been to take a proposal to the board for consideration.
“I’ve been on the board for seven years,” Ms Dates said.
“I know my rights as chair.”
TURNS IN THE MONEY MAZE
The majority of the missing money appears to have ended up with Gows Heat.
Gows was the company that originally purchased the land, but agreed to tear up its deal in exchange for a $1.6 million payout from Mr Zong.
Gows has insisted it is entitled to keep the $926,667 it received from Mr Zong, irrespective of the outcome of his land dealings.
In a defence filed with the court, Gows argued there was never a financial risk for Awabakal, because it never received any payment from Mr Zong.
“[The land council] knows that having received no money in respect of any land dealing with Sunshine, there was no risk that money not received would have to be repaid,” it said.
Gows has admitted that Mr Petroulias and Knightsbridge North Lawyers both acted on its behalf during the dealings with Mr Zong. It describes the company as an “investment consortium”.
However, a Fairfax Media investigation into the businessmen behind the North Sydney-based outfit has produced baffling – and in some cases bizarre – results.
The director who signed the original sales contracts on behalf of Gows in 2014 is listed in court documents as Johan Pieter “Jason” Latervere.
No other person with the surname could be found in electoral rolls and when Fairfax Media attended Mr Latervere’s home address in Strathfield, an unidentified woman said no person with that name lived there.
But in a disturbing coincidence, records have been obtained from Rookwood Cemetery which show it cremated a Johan Peiter “Jason” Latervere – who shares the same date of birth – a year earlier.
When contacted, a cemetery employee said the ashes of the 40-year-old were not kept on site.
In an even stranger twist, the same name and date of birth were adopted as an alias by an infamous Melbourne con man during the early 2000s.
Gabriel Werden is serving prison time for frauds that resulted in his victims being swindled out of millions.
Before his arrest, he was a fugitive wanted for crimes spanning multiple countries and four Australian states.
At one stage, he tried to have his fingerprints surgically removed and changed his name by deed poll to Robbie Rocket.
When he was arrested at Sydney Airport in 2004, Mr Werden was carrying a fake passport bearing his photograph but Mr Latervere’s name and date of birth.
According to police facts from the case, Mr Werden’s fingerprints were also discovered on a birth certificate and a letter written in Mr Latervere’s name.
Another Gows director, William Reginald Campbell, was listed at a non-existent address in Rose Bay.
In 2012, Mr Campbell was convicted for his role in an Armidale drug supply ring, but escaped with a three-year good behaviour bond.
Director Fondas Douloumis listed his residential address as post office box in Leichhardt. The surname Douloumis was also absent from electoral rolls.
The same post office box in Leichhardt was used as the address when Gregory Steaven Vaughan was appointed as company director of Gows in late August.
When Fairfax Media attempted to visit Gows’ office address, there was no sign of any representative of the company.
There were offices belonging to an accountant that previously performed work for Mr Petroulias. The building was also formerly home to Knightsbridge North lawyers.
Awabakal’s lawyers have argued the company is a fictitious creation.
They allege Gows’ original deal to buy the land was void, because it never had the approval of Awabakal’s members, board or the NSW Aboriginal Land Council.
"Gows is a sham being run, it seems. The only human we've been able to track down in running this company is a convicted fraud,” barrister Jeremy Kirk said in the Supreme Court last week.
Awabakal’s lawyers have now been granted a court order to access Gows’ banking records, with the hope it will shed more light on the person or people behind the company.
Mr Kirk has appeared for the Independent Commission Against Corruption in a case against Eddie Obeid, acted as a counsel during the child abuse royal commission and defended Amber Heard when she was accused of smuggling her dogs Pistol and Boo into Australia.
But he remarked that allegations in this case were particularly serious. “These are the strongest submissions I've ever put my name on,” he told Justice Rowan Darke.
Mr Petroulias was contacted but declined to comment.
ADVICE AND ALLEGATIONS
Tony Zong came under scrutiny from Fairfax Media last year for his involvement with development companies Luxeland and Miramax.
In a defence filed for Gows, a series of damning allegations are made about Mr Zong, with the developer accused of using the transaction as a front to launder money into Australia without the knowledge of the Chinese government.
He is also accused of trying to arrange a secret commission payment for himself – rather than charging his investors direct – for the movement of funds out of China.
Mr Zong was anxious about the state government’s investigation into the land council because of his own personal misconduct, it was alleged.
“An investigation may cause a spotlight into the sources and potential sources of funds of the Chinese investors into Sunshine property,” the defence said.
It was also alleged that there was a night in 2015 where Mr Zong treated Awabakal board member Richard Green and his associates to dinner, karaoke and “other entertainment services”.
They were in Sydney on business at the time, as applicants for a native title claim.
“This could be misconstrued by an investigator as an attempt to bribe and corrupt Mr Green,” the defence said.
It alleged Awabakal was capable of approving the land deal, and Mr Zong’s offer was put twice to the land council’s board in 2016.
But it was rejected in light of “significantly better offers”.
“Mr Zong of the plaintiffs, acting unilaterally, tainted the transactions by illegality such that it would be unlikely that the transactions with Awabakal could succeed,” the defence said.
It was claimed Mr Zong’s own solicitor warned him about the approvals needed to secure the sale but he chose to ignore the advice.
Awabakal lawyers have also argued that Mr Zong should not be entitled to damages, saying due diligence should have made him aware of the requirements underpinning Aboriginal land sales, printed on land-title certificates.
Fairfax Media attempted to contact Mr Zong but he could not be reached for comment.
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