BRETT Walker, the man at the centre of the hunt for the missing $10 million stolen by his Newcastle accountant father Ray Walker, made his much-anticipated appearance in the witness box on Tuesday but appeared to have some trouble with his memory.
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The 46-year-old Hunter-based accountant, who shared an office with his father for decades, is viewed as the key figure in a bankruptcy trustee investigation that returned to Sydney’s Federal Court.
But the way Mr Walker tells it, he knew very little about his father’s business dealings.
Ray Walker killed himself, on July 30, 2015, aged 67, when his fraud was uncovered.
Mr Walker, who heads Active Accounting Group, told the court when he started as a trainee with his father’s business, W Walker and Co, back in the 1990s, his father sat him down and described how he was a “private person”.
He went on to tell the court he had no knowledge of the Ponzi scheme his father ran for decades that saw 70 clients, mainly ageing Hunter retirees, lose their life savings and superannuation funds.
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Questioned for five hours by barrister Anthony Spencer, SC, for the bankruptcy trustee Ray Tolcher, Mr Walker repeatedly replied “I have no recollection”, “I don’t recall” or “I honestly don’t recall”.
Asked if he was being truthful, Mr Walker replied that he was.
The answers were too much for more than 30 of Ray Walker’s victims and supporters, who packed the public gallery, several times letting out a collective groan.
Mr Walker said he had no knowledge of his father taking funds from clients to invest in a pooled investment fund that Ray Walker claimed was deposited with one of the big banks for a higher interest rate.
The court heard that on the morning of his father’s death, just days after the Ponzi scheme began to unravel, Brett Walker wrote a “panicked” email to Ray Walker.
“You have taken clients’ money on false pretences by stating it will be held in term deposits where you get more interest by grouping funds together,” he wrote.
“I know this to be the truth as I have heard you use these lines to clients since I was a trainee.”
When questioned about his knowledge of the investments, Brett Walker said he was referring to a discussion he had with his father when he started in the business as a trainee in the 1990s when his father told him about a debt factoring business he ran.
“I had actually not heard him use those lines to clients,” he said. “I knew I’d heard those words before ... he actually said them to me … I have no recollection of hearing that at any other time.”
Ray Walker’s suicide was precipitated by a bruising nine-page legal letter from solicitor Rob Brook, of Newcastle Legal, sent in July 2015 demanding the return of a client’s retirement funds of more than $650,000.
The point of the letter was clear. Ray Walker was facing fraud charges and jail time if Mr Brook’s client did not get her money back.
There is no doubt from the contents of the letter, which was copied to Brett Walker, that Mr Brook had the goods on Ray Walker.
Brett Walker told the court the letter was the first he had heard about a pooled investment fund that was used by Ray Walker to siphon off victims’ money.
This was despite a former employee of the accounting firm, Martha Kodela, alleging she had a conversation with Brett Walker on May 27, 2014, about $100,000 she had invested with Ray Walker in the pooled investment fund.
According to Ms Kodela, she needed money for a vacation and Ray Walker was overseas so she went to Brett Walker.
Mr Walker repeatedly said he couldn’t recall the conversation with Ms Kodela.
He was at a loss to explain why his business, B Walker and Co, deposited $2000 into Ms Kodela’s bank account on the same day that she said the conversation took place.
“I honestly have no recollection about it,” Mr Walker said.
When asked what actions he took in the days after learning of his father’s fraud to help the clients who had lost money, Mr Walker replied that he didn’t “recall thinking of that”.
He said he couldn’t recall “doing anything specific” to investigate what happened to the missing millions.
But on the day of his father’s death, the court heard Mr Walker took action to change the ownership of the business name W Walker and Co, from being held in a partnership between him and his father, to being owned by a company called Bruttame.
Bruttame ran the administration of the W Walker and Co group and after Ray Walker’s death, Brett Walker was the sole director.
Mr Walker described the change of ownership as a “proceedural thing”.
“It just needed to be addressed, we just fixed it,” he said.
Partners in an accounting practice can be held legally responsible for a firm’s debt.
The Walkers were in a formal partnership up to 2008 when a restructure saw accountants at the firm working in the same office but as separate legal entities.
The hearing continues on Wednesday.
