Bond later claimed that the TV stations were not pulling in the revenue that Packer had said they would. When the stock market crashed in 1987, Bond found himself under pressure and overleveraged. ‘Where’s the $200 million?’ Packer asked Bond. Bond had already sold Channel Nine in Perth, and Packer told him that if Bond was struggling to pay he would ‘take it [Channel Nine] off [his] hands’. Bond handed over Bond Corporation to Packer for somewhere between $200 and $400 million.
‘You only get one Alan Bond in your lifetime,’ Packer laconically commented.
The stock-market crash of 1987 was a stark warning that the days of easy cash and ready loans were over. Bond had exemplified the excess, spending $54 million on Vincent van Gogh’s Irises. It was classic Bond — it made headlines as the highest price paid for a work of art, but he had persuaded auction house Sotheby’s to loan him half the money. He ignored any warnings from the crash and carried on undaunted, entering into three devastatingly incompetent deals that cost him a fortune. Just weeks after the Black Monday crash, he paid Robert de Crespigny $375 million for half of the Kalgoorlie Superpit gold mine with a promise of $25 million to come. It was the same sort of deal that had come unstuck with Packer, and it happened again — costing him a valuable gold mine into which he had sunk a $200-million stake.
The next duff deal came with an expansion into the American brewing market and the takeover of Heileman Brewing, the third biggest brewer in the US behind Anheuser-Busch and Miller. To fund the deal, Bond sold some of the key parts of the empire, and without them managed to turn in a $95-million loss.
Then he tried to take on dapper British entrepreneur Tiny Rowland with a $655 million purchase of twenty per cent of his huge international Lonrho empire. Rowland came out fighting, putting out a stream of reports that forensically dissected Bond’s accounts. The longest of the reports began with the line: ‘Bond group companies are technically insolvent, the commercial existence of which is through extraordinary bank support’. It was true, and Bond had nothing to come back with.
In the meantime, Bond, the compulsive deal-maker, had bought a 19.9 per cent stake in Robert Holmes à Court’s struggling Bell Group, with the State Government Insurance Commission taking a similar stake. It was all propped up by huge unsustainable loans paid by the overleveraged brewery business. Bond eventually ended up with 68 per cent of the company and went on a ruthless asset-stripping spree from the assets-rich Bell Resources. He took $1.2 billion from the company, partly to fund the Lonrho deal, and also for his own purposes. It was a move that ultimately brought about his downfall.
As cavalier as Bond was with other people’s money, he was very careful with his own. In 1974, he placed his luxurious new Perth mansion, overlooking the Swan River, into a trust for his family. Over the years that followed, other trusts appeared for his wife, Eileen, and their four children: John, Craig, Susanne and Jody. Money was squirrelled away from his expanding network of companies into bank accounts in Jersey and London. Eventually it all ended up under the control of a Swiss bagman called Jurg Bollag in the Swiss town of Zug. Bollag said he was the owner of Bond’s English country home, Upp Hall in Hertfordshire, and put his name on the title deeds of three other Bond properties around the world. Paul Barry tracked him down for ABC’s Four Corners to ask him why he was so nice to the Bond family. Why was he happy to buy them lovely expensive paintings, fund Bond’s daughter Susanne’s blossoming equestrian career and allow Bond family members to live in his properties rent-free? Bollag called the police when Barry confronted him, but years later in Bond, his autobiography, Bond admitted that all Bollag’s properties were in fact his. ‘Surprisingly, no one seemed to care or be surprised. Perhaps they already knew,’ wrote Barry after Bond’s death.
By 1991, Bond Corporation was in dire trouble. It reported a 96 per cent drop in revenues and declared itself bankrupt. Bond followed suit in 1992, declaring himself bankrupt with $1.8 billion in personal debt. In May, he was jailed for two and a half years, convicted of fraud over a $16-million ‘fee’ for bailing out Laurie O’Connell’s Rothwell Bank. After three months, he was released and acquitted in a retrial. Then in 1996 he was jailed for three years over the $15-million sale of Manet’s painting La Promenade, profits from which wound up in one of his companies. And in 1997, he finally got four years for the biggest fraud in Australian corporate history — the stripping of $1.2 billion from Bell Resources.
During his long legal battles, Bond employed various tactics, the most telling of which was a dramatic loss of memory in 1994. Quizzed in the Federal Court in Sydney over bank accounts in Switzerland and Lichtenstein, he clutched his plastic bag of sandwiches and stared vacantly into space. It was all such a long time ago and he was really trying his best, Your Honour.
But Paul Barry was having none of it. He watched Bond leave the court, turn the corner, visibly straighten up, toss his sandwiches into the bin and step purposefully to the Sheraton Wentworth hotel to start making deals. The next day, Barry, with an ABC camera crew in tow, pounced on Bond on the way to court and handed him his business card. ‘I’m Paul Barry from Four Corners, remember me?’ he asked.
Bond tossed the card to the ground and stamped on it, growling, ‘Keep right away.’ It was TV gold.
‘So you do remember me,’ said Barry. ‘So you do remember me.’
The memory-loss con was well and truly exposed for the lie that it was.
Bond did not let the grass grow under his feet in his personal life either. In 1992, he divorced his wife of 37 years, Eileen, or ‘Red’ as she became known because of her red hair and partying ways. They remained firm friends. Their lives were touched by tragedy when their daughter Susanne, a member of the Australian equestrian show-jumping team, died from an accidental overdose of prescription medication in 2000.
The marriage had endured as long as it had largely because Red had chosen to ignore the stories of her husband’s exploits with blonde and usually much younger women. But even she reacted when Bond’s then-girlfriend Diana Bliss walked into the same fancy Perth restaurant where Bond and Red were having lunch during the 1987 America’s Cup campaign. ‘Throw the bitch out,’ Red reportedly hissed at the manager. He refused, and Red then had to watch as Bond’s lover spotted him and boldly came over to greet him with a kiss. A furious Red then turned on the friend who was dining with Bliss, who was eventually persuaded to leave.
Two years later, Bliss and Bond had split, but had stayed on good terms. Over lunch with Bliss in London, he reportedly produced a photograph of his latest squeeze, former air hostess and Perth real estate agent Tracey Tyler. ‘She’s just like you, only younger,’ he said tactlessly.
Somehow she managed to overlook this and they eventually reunited, marrying in 1995. They lived in London, where Bliss continued a successful career as a theatre producer. She was found dead in their swimming pool in Perth in 2012. Police said there were no suspicious circumstances and Bliss, who had suffered from depression, had committed suicide.
Despite the jail terms, bankruptcies and personal tragedies, Bond continued to bounce back. He had reappeared on the BRW Rich List in 2008 and was talking up a South African diamond deal when it emerged that the diamond company owed $3.3 million to other miners. Tellingly, Bond’s partner in the deal was a former Perth bankrupt, Robert Leslie Nelson.
The only thing that could stop the merry-go-round was the grim reaper. In June 2015, Bond flew home to Perth for heart surgery and never woke up from the operating table. He died, aged 77, while Red was still in the air on her way back from London to Australia.
His son John announced his death to the gathered media. ‘To a lot of people, Dad was a larger-than-life character who started with nothing and did so much. He really did experience the highs and lows of life,’ he said. ‘To us, however, he was just Dad. A father who tried to be the best dad he could.’
Summing it up, Bond’s biographer and nemesis Paul Barry wondered if he should be remembered as a hero or a villain, or a bit of b
oth. ‘Well, he made life interesting, that’s for sure. And the world needs risk-takers like him to get things done,’ he wrote in the Sydney Morning Herald. ‘He had such amazing talents. It’s a shame he didn’t use them better.’
* * *
Work began on Bond’s gift to the nation, the replica of the Endeavour, in 1988, and had to be called to a halt when the Bond Corporation ran into trouble a few years later. Volunteers maintained the unfinished vessel until a charitable foundation was set up to complete the work, and the boat was launched in 1993. It has since circumnavigated the globe, and still sails on Sydney Harbour as a museum ship. Without Alan Bond’s vision and energy, it would not be there — it was just unfortunate he left it in such a shambles that others had to step in and finish the job. It remains the perfect epitaph to an imperfect man.
The Edge: Gambling grifters
THERE’S nothing a dirty rotten scoundrel likes more than a day at the races. There is very little so attractive to the average grifter than the sight of naive punters with bulging wallets keen on making a fast buck. For a long time, Greek migrant Bill Vlahos was one of them. Then he worked out The Edge.
Vlahos had street smarts, growing up in the tough Prahran Housing Commission flats in inner-city Melbourne and acting as the family spokesman for his mother who never really grasped English. He had at least started the training to become a psychologist at La Trobe University, but there are no records showing him actually graduating. Friends recall him as a very likeable man. He did various stints at hotels, finishing at Voyagers Resorts in North Queensland as the executive director of human resources. Then there were a couple of missing years where he said he spent his time, unemployed, living near Randwick Racecourse and working out a betting system to beat the system. In 2005, he took this unique formula to a few friends and started his punting club, The Edge.
It began slowly, with his biggest bet the following year totalling just $2000. Behind the scenes, though, The Edge was building up investors, and in 2007, Vlahos spent $1.2 million to buy a 75 per cent share of the racehorse Pillar of Hercules. It was a poor horse, but a headline-grabbing investment. More punters joined the club and The Edge started to bet bigger.
Vlahos might have had a system, but it was the psychological hooks he put into his investors that kept his club running for eight years. Nobody knows exactly when Vlahos started to pay out the winners from the investments made by others, but it was a remarkably long run for a classic Ponzi scheme, where the money from the new punters coming in pays those who are already in. The mugs putting fortunes into The Edge’s seemingly magical betting club began to call Vlahos Dollar Bill.
His claim to fame was his detailed spreadsheets — the Saturday morning tipping sheets that showed an average return of twenty per cent. People were getting paid, so no one raised an eyebrow or thought to ask why they never saw the Saturday morning tipping sheets until Sunday morning, when the races had already been run.
By 2009, The Edge supposedly had a regular pool of $500,000 to splash across two races — $70,000 for every horse Vlahos picked. The hole in the system, as one alert bookmaker pointed out, was that if he was betting such big sums, it would force bookmakers to shorten the odds. If someone is dropping $70,000 on a 10–1 shot, the bookies are looking at a potential payout of $700,000 and will cut the odds to reduce their risk. However, the odds on the horses on Dollar Bill’s tipping sheets were not moving — because he was not really betting big at all. When the bookie raised the alarm, Vlahos claimed he was actually betting on overseas races with a mystery partner in Dubai called Daniel Maxwell, who it turned out never existed anywhere other than in Vlahos’s imagination.
The Edge punting club was the real money-making engine room of Vlahos’s more public business — BC3 Thoroughbreds, an unregistered bloodstock syndication business that sold shares in its racehorses to punters. After the purchase of Pillar of Hercules, Vlahos became a regular at the yearling sales. Spending big. In 2009, he promised to buy 100 yearlings at auction and, in 2012, he paid $2.6 million for champion Black Caviar’s younger sister Belle Couture. The horses were housed at wealthy Melbourne businessman and racehorse owner Peter Sidwell’s luxurious training complex at Sutton Grange, near Bendigo in Victoria. Rent started at $25,000 a month, then came the training, veterinary, feed and countless other bills that racing experts have estimated quickly tallied up to more than $15 million a year.
Of course, that was not a problem while The Edge was generating money from punters, many of them mum-and-dad investors, who had sold their assets to jump on board the bandwagon. A lot of the gullible recruits were from the Yarrawonga and Cobram district where Dollar Bill’s wife, Joanne, was raised. It was awfully close to home. One investor tracked down by the Herald Sun was a policeman who cashed in his $10,000 long-service leave to put in the club. Owners of big businesses pumped fortunes into both racehorse shares and the punting club.
Nothing lasts forever, especially not a Ponzi scheme built on a phantom betting system. In 2013, Vlahos paid $5 million for Black Caviar’s half-brother Jimmy at the Inglis Easter Yearling Sales. It was at least $2 million over the odds for a horse that x-rays revealed had knees that looked too dodgy to withstand the rigours of the racetrack. Afterwards, Vlahos shouted French champagne for the marquee, and those with doubts kept them to themselves. Hanging on his arm were two beautiful young women — strippers Charlie and Mikayla, who he had met and grown fond of at the Men’s Gallery in Melbourne. The girls also accompanied him on first-class flights to Dubai, where he hosted wild parties in the presidential suite of the world’s only seven-star hotel, the sail-shaped Burj Al Arab.
But while he fiddled, The Edge burnt. Vlahos told his punting club members at the start of the year that they had had a bumper quarter and made a 46 per cent return on their bets. In a flood, members decided it was time to withdraw their winnings. This of course presented a problem to Vlahos, who knew there weren’t any winnings. Vlahos emailed the members and suggested perhaps shutting down The Edge. He showed them screenshots of Westpac bank accounts with balances of $170 million to reassure them they would eventually get their money. But as the year wore on, his excuses for why he couldn’t pay out became lamer and lamer.
At the heart of them was his Dubai partner, Daniel Maxwell. By the end of June 2013, Vlahos was forced to email his members to tell them that withdrawals were likely to hit ‘over $41 million’ for the previous three months. ‘This position is both sad and compromising for us all,’ he wrote, lamenting the loss to the business. The next month, he emailed: ‘I am now in the process of winding up the club.’ Despite this, members were still waiting to be paid in September. Vlahos reassured them that month that they would be ‘happy/less angry/relieved by early next week [at] the latest’. But early the next week, he wrote that he was still chasing money from Maxwell. In October, he warned members that they should not go to the authorities or alert their lawyers, because that ‘only slows the process down’. In November, he said that he had checked the joint account they shared with Maxwell ‘expecting to see that all of the funds had left the account, meaning it would have … been ready for distribution today. It had not.’ Even the most optimistic members had by now started to realise that Daniel Maxwell and their joint account with him did not exist. When journalists later went to the address Vlahos supplied for Maxwell, they found no one with that name had ever lived there.
Once Vlahos had confessed that the money from the Westpac account, now purported to be $194 million, had disappeared, his frustrated members finally turned on him. He was forced into hiding as those with criminal connections had bikies looking for him and their money. A group of investors took him to court, but a week before Vlahos was due to present the evidence, he was mysteriously attacked and his ute set on fire. Dollar Bill amazingly escaped the attack without a scratch, but, unfortunately, his lawyer told the Victorian Supreme Court, his laptop, a USB stick and vital documents had all been inside the vehicle when it was torched. The investors’ la
wyer, Robert Dick, observed that this was evidence that was due to be handed in to the court just two days later. ‘When he gets asked to produce it, it gets blown up. Analogies about homework come to mind,’ he observed drily. Agonisingly for the punters, the court case unravelled, and with it their hopes of getting their original investment back, let alone the huge dividends they thought they had banked.
Jimmy, Black Caviar’s half-brother, died mysteriously from a ‘spider bite’ in December 2013 and a court case ensued over who would claim the insurance money — it turned out that Vlahos had never paid the $5 million for the horse. And like most things Vlahos was involved in, the first story was not the reality. The horse did not die from a spider bite at all; it actually had a debilitating hoof disease and had to be put down without ever setting foot on a racetrack.
In August 2015, Vlahos was arrested by the Victoria Police fraud squad following a two-year investigation. And those lucky winners that Vlahos had actually paid out money to? In December 2015, Vlahos’s trustee in bankruptcy Clyde White sent 73 letters to these winners, demanding they repay $23 million of their winnings to recompense the punters who had lost. White took Sydney investor Ibrahim Elbekkahi to court to claw back $900,000. The fallout looks set to continue for years to come.
* * *
One of the first clues that all might not have been on the level with Vlahos was his 2007 purchase of the racehorse Pillar of Hercules. However, at the time no one was paying too much attention to who had bought the horse, because all attention was on its connection to notorious underworld figure Tony Mokbel. It also had connections to Tony’s older brother Horty, who was due to appear in court on charges of trafficking $40-million worth of amphetamines. Racing Victoria banned the horse from running in the 2007 Victoria Derby until they worked out who the owners were.
Dirty Rotten Scoundrels Page 13