Hohenberger was on a ski trip in Switzerland as the net closed. He went out to the slopes and never returned. Two ski stocks were placed on the edge of a 2000-metre-deep ravine, indicating he had plunged to his death. His bags were found months later. Police were sceptical, and believed that he had faked his own death and headed over the mountains into Italy, but no proof appeared that he remained alive until he emerged in Australia years later.
There Hohenberger, under the name of John Friedrich, took a variety of jobs before heading out to Ernabella in South Australia to work for the Uniting Church on its Aboriginal mission. When he fell ill with an infection, Friedrich was cared for by nurse Shirley Manning. They fell in love and married in Sydney in 1976, returning to Ernabella shortly after.
Greg Ranse worked at the station with Friedrich. The two men shared a house, while Shirley shared with Ranse’s wife-to-be, Anne. ‘We asked Shirley how she could marry someone she knew nothing about, who he was, and where he came from. To which she replied she just loved him for what he was. I really don’t think he ever even talked to her about his background,’ said Ranse.
The newly-wed couple moved on to work for the Uniting Church mission on Mornington Island. Friedrich, without a passport or any legal identity documents, also helped out as a coast watcher for the Royal Australian Navy, a reporting officer for the Department of Civil Aviation and in many other quasi-official roles. The couple stayed beyond their contract to help clean up after Cyclone Ted destroyed almost all of the island’s buildings, and then returned to Victoria where Friedrich took a job as a safety officer with the National Safety Council of Australia (NSCA) at the start of 1977.
When Friedrich joined, the council was a simple organisation that offered occupational safety advice to industry. It grew under the directorship of Frank Turley, who took the organisation in a different direction with the purchase of a fire truck and rescue vehicle. Its contracts increased, with Friedrich given the job of supervising the provision of physical-safety and first-aid services to the 5000 staff at the State Electricity Commission’s power station in Yallourn. He did well, and when Turley retired in 1982, Turley recommended Friedrich take over.
Friedrich started as he meant to carry on — borrowing $500,000 within two months of taking the job to pay for top-of-the-range safety and rescue equipment. The next year, he arranged for a $2-million loan to buy a Beechcraft plane and electronic scanners. Friedrich was confident that he could charge Rolls-Royce fees for his gold-plated, bells-and-whistles, Rolls-Royce service. In the early days, it seemed to work.
But there were signs that his financial acumen was not as developed as it appeared. Engineer John Hodges told the Sydney Morning Herald that, in 1979, Friedrich had come to him to build an expensive diver’s support vehicle, which Friedrich would hire for use at the Loy Yang power station site in Victoria. By the end of the year, the contract to hire the vehicle had more than covered the cost of the vehicle.
Friedrich thought he had the right model for building his empire. And what an empire! There were crack search-and-rescue teams, who were highly trained and worked in conjunction with the armed services; a 50-strong precision parachute squad; helicopters, jets, trucks, snowmobiles and cars; a medical centre and a dedicated satellite communications system. The Victorian branch of the NSCA had opened interstate in Townsville, Queensland, and the Illawarra and Williamtown, New South Wales. Adelaide had a hyperbaric chamber. In Welshpool, Western Australia, there was a marine operations centre with craft including a 42-metre recovery vessel, fifteen-metre sailing yacht and sixteen-metre launch. There was also a training school for warmblood thoroughbred equestrian horses at the headquarters in Sale, Victoria. The NSCA a well-equipped private army known colloquially as ‘The Thunderbirds’, after the children’s television show. Friedrich’s personal helicopter had previously been owned by Ugandan despot Idi Amin.
Naturally, such a well-provisioned ‘fourth service’ attracted a great deal of speculation. Was Friedrich’s private army really a CIA force hidden in plain sight to protect America’s secret bases on Australian soil? Anonymous sources circulated stories that the scores of jets, helicopters and fixed-wing aircraft were used to move people, drugs and money in and out of Australia. It was claimed by Friedrich’s personal pilot that he flew Friedrich to airports around Australia, where Friedrich would then board waiting executive jets that wore US colours and disappear for hours at a time.
Friedrich himself favoured the rumour that he was working for the CIA. ‘Such accusations come close to the truth in one way, but in another they miss the boat completely,’ he wrote in his usual contradictory style.
He justified the excessive spending by saying that the thinking behind it was a product of the times — the general rise of terrorism throughout the western world during the 1970s, such as the attack on the 1972 Olympics, meant there was a concern for safety on the part of governments and businesses. Even before he joined the NSCA Victorian Division, he said, it was being developed as ‘a support mechanism for counter terrorism and general emergency work, some of it covert’. It was a bit like the CIA-funded Air America, the passenger and cargo airline that fooled no-one. He claimed they created the infrastructure that allowed certain operations to take place — no questions asked. ‘If some of those operations were covert,’ he said, ‘they must remain so.’
But, having said all that, the Victorian branch of the NSCA was, according to him, ‘ninety-five per cent fact — what we said we were, we very largely were — and five per cent smokescreen’.
It was a big smokescreen. Reporter Bruce Dover re-created a typical and telling scene in a thorough investigation of Friedrich’s empire in the Sydney Morning Herald in 1989. Friedrich, brimming with confidence, would lead groups of bankers around the various NSCA sites and point to the multi-coloured steel containers outside on the tarmac. ‘Gentlemen,’ said Friedrich on one such occasion, ‘the spectacular growth of the National Safety Council is due in no small part to entrepreneurship and business acumen. It is not the aircraft or helicopters, not the search or rescue operations or fire-fighting that make us money, but the containers you see about here, full of safety equipment. The National Safety Council is really just one giant hiring company; we rent out the containers to hundreds of industrial and mining companies around the nation in return for rental and service fees. That’s the key to our success.’ Like everything Friedrich said, it had a basis in truth, but all was not as it seemed.
The boxes were empty.
Littered all across the country were steel boxes supposedly packed with safety equipment that was worth $140 million in total. The con grew out of the relationship Friedrich had with two companies: John Hodges’s Centurion Transport Engineering in Melbourne and AKZ Steel Pty Ltd in Morwell. In 1984, Friedrich borrowed $1.185 million from Barclay’s Australia Finance Ltd to buy purpose-built steel containers that were meant to hold valuable safety equipment. The two companies would build the containers, then invoice the bank directly for $237,000 for each filled container. When they received payment, they would deduct their $8000 to $12,000 fee and transfer the rest of the money into the NSCA’s coffers. It worked, and in the same year Friedrich borrowed more to take the tally up to $6 million for twenty containers. By the following year, loans were running at $22 million — almost half of which were secured against the contents of empty containers.
The money was not sitting around for long. Friedrich was spending up big. He surrounded himself with an elite corps, known to everyone else as Friedrich’s Pets, whom he lavished with new BMWs and home loans. The financial arrangement ensured these former tradies, who suddenly found themselves jetting around the world and living the high life, were extremely loyal and unquestioning. The only people really looking at the books were company secretary Olwyn Pratt and chairman of the board Max Eise. The relationship between Pratt and Friedrich was prickly. When she came back from an eight-week holiday at the end of 1985, Pratt found she had been transferred to the Coolangatta o
ffice. Meanwhile the loans continued — another $24 million for 80 supposedly full containers by the end of 1986.
The Commonwealth Bank of Australia later took each of the directors of the NSCA to court to seek compensation. Most cases were settled, but Eise maintained his innocence and fought and lost the battle, having $97 million awarded against him in a judgement that cost him everything he had. In his judgement, Justice Tadgell described the spell that Friedrich had cast over directors who perhaps should have known better: ‘Friedrich gave the board the general impression of being an ideal chief executive of exceptional industry and ability to which the company’s remarkable expansion since his appointment had largely been due. He did, it seems, drive the board along with an almost euphoric sense of high achievement, a sensation which the board greatly appreciated and enjoyed.’
How did he dupe the board? Sheer bald-faced nerve. At an annual general meeting, a director had the temerity to ask if the financial records had been audited. Friedrich knew that they had, and it was not a pretty picture, but he boldly replied that the audit was available for inspection. Suitably reassured, noted Justice Tadgell, ‘no person present sought to inspect the document, and it was not read out’.
Friedrich pulled off a similar bluff in 1987 when bean counter Ewan Farquhar, from the auditors Horwath and Horwath, was concerned enough to insist that he be shown some of the containers that were scattered around the country. Friedrich ordered pilot Daryl Brooks to fly Farquhar over the container sites. The auditor only saw them from the air and was not given a chance to look inside a single one. Well, he wanted to see the containers!
Despite his brilliant flair for cover-ups, the clock was ticking. In 1988, Horwath and Horwath reported that the previous two years’ accounts were not quite what they seemed. Friedrich still managed to raise another $40 million and that year was awarded the Order of Australia ‘in recognition of service to the community, particularly in the area of industrial safety and search-and-rescue services’.
A year later, the NSCA collapsed in a bankrupt heap and Friedrich ended up facing 91 charges for his part in the $296-million fraud. The steel boxes that were the foundation of his empire were found to be empty and largely worthless; most were sold off to people looking for cheap garden sheds.
Justice Tadgell said: ‘Friedrich was, I should judge, manipulative and deceitful; and he made himself extremely plausible by dint of being an accomplished liar.’
As the proverbial hit the fan, Friedrich responded true to form and went on the run. The manhunt gripped the nation until he was finally arrested in Perth and extradited to Victoria for trial. His body was found at his farm near Sale, Victoria, with a single gunshot wound to the head, which the coroner found was suicide. John Friedrich, loving father and husband, was dead at 40.
Unlike other con men in this book, Johann Friedrich Hohenberger had a grand plan that went beyond feathering his own nest. He had a vision for truly spectacular safety and search-and-rescue services and conned banks into funding them. Did he think he was a bad man? In the days before the collapse, Pratt asked him why he had done it.
‘Who, me? Do what? I haven’t done anything,’ he replied.
After the NSCA collapsed and before Friedrich’s death, Friedrich’s lawyer, Zig Zayler of Melasecca Zayler Solicitors, said the smooth talker had been involved in a new money-making business in Queensland. His company, which was called Firstmove Pty Ltd, had the chance to carry out a survey of Cape York in partnership with a company called Airplan for a client called Caple Meadows Pty Ltd. His loyal wife, Shirley, was helping raise the money by backing the business with her house and property, and other friends were also stumping up cash. Once Zayler had been through the figures, the legal eagle was convinced it was the real deal.
However, upon Friedrich’s death, and without the puppet master on hand to pull the strings, the deal began to unravel. It turned out the contract was a sham, and Friedrich had duped his wife and friends just as he had duped the banks. Zayler spoke to Airplan and discovered there was no joint-venture agreement — Friedrich had just hired their offices and used their facilities to give the appearance of one.
When told of the con, to her enormous credit, Shirley said she would give the money she had received from magazine and television interviews to the friends her husband had duped. Zayler acknowledged that she was ‘a truly exceptional person’ and said he felt humbled by her.
So how had he done it again? Zayler dissected Friedrich’s successful technique: ‘The basis of the con is to make sure, when you’re lying to two people about each other, that they don’t communicate with each other.’ Friedrich did that by taking each person into his confidence and appealing to their vanity. Friedrich astutely analysed each individual’s personality and seduced them with a combination of familiarity, friendliness and compliments.
He might then suggest a third person who they should contact to corroborate what he was saying. ‘Needless to say,’ observed Zayler, ‘no such corroboration was sought and John’s word was accepted.’
The other trick was to put people firmly in his camp by criticising and slandering others. This ensured they did not trust each other and thus did not communicate. ‘John took some risks in this approach, as people may well have talked to each other,’ said Zayler. But the risk was slim — the fact was that people didn’t ever talk to each other.
That provides an insight into how Friedrich did what he did, but it does not explain why. Friedrich said in his book: ‘The big entrepreneurs of the 1980s appear to me to have run on greed: greed for power and greed for money, with the former being more important.’ It annoyed him that he was sometimes grouped in the same category as people like Christopher Skase and Alan Bond. ‘I did what I did because it was a job to be done. Money doesn’t motivate me. I admit I like power but that doesn’t motivate me either. Challenges motivate me.’ And then he added, somewhat presciently, ‘I don’t expect many people will believe this.’
By the Book: Literary hoaxes
DALIA was a beautiful and spirited young woman, whose eyes ‘betrayed a hint of conspiratorial glee’. Her story captured the imagination of Australia and the world when it was told in the book Forbidden Love by Norma Khouri, published in 2003.
Norma and Dalia were best friends in their hometown of Amman in Jordan, and together they opened a unisex hair salon there called N & D’s in 1990. Their male relatives kept an eye on them, in keeping with their strict Muslim culture, but they were young and free. Dalia fell in love with a male client, a Christian soldier called Michael, and they began a chaste but taboo affair that crossed the religious divide. Tragically, in 1996, Dalia’s father found out about the affair and stabbed her twelve times in an honour killing that shocked her young friend. Norma was determined to tell the world of her friend’s murder.
With Michael’s help, Norma was secretly squirrelled out of the country in 2000 and wrote out the full horrific story on a battered laptop in internet cafes in Athens. Khouri then sent the finished manuscript to New York agent Christy Fletcher, who placed it with sixteen publishers around the world. It was an amazing story that promised to lift the lid on the full barbarity of honour killings in Arab countries.
When it was published, Forbidden Love stormed the bestseller lists, selling 250,000 copies worldwide and quickly earning its way to the list of top 100 books of all time. Khouri toured the world, telling again and again at book signings, festivals, on radio and even on network television in the US the horrific saga of her best friend’s death at the hands of her father. She became the tear-stained standard bearer against honour killings and sparked a slew of copycat books. The publicity forced Khouri to move to Queensland in 2001 to live in hiding and prompted her publisher, Random House, to sponsor her for a temporary residence visa.
Which is not bad for a married mother of two from Chicago.
It took the tenacity of Sydney Morning Herald literary editor Malcolm Knox and journalist Caroline Overington to uncover the web of lies t
hat made Forbidden Love one of Australia’s biggest ever literary hoaxes. The two journalists won a Walkley Award for their joint investigation, but even today Khouri does not admit that her account was totally fabricated.
The first cracks in the Forbidden Love facade began to appear in September 2003 with a letter from Amal al-Sabbagh, the director of the Jordanian National Commission for Women in Amman, to Khouri’s publishers in America and Australia. Before the book’s publication, Khouri had written an email to the commission, asking for an endorsement of the book and for details of a bank account to which she could donate proceeds from her work to help other oppressed women. ‘When I got the book, I thought she doesn’t know anything about Jordan,’ al-Sabbagh told Knox. ‘It sounded fake. If this killing had really happened, we would know about it. Jordan is a small place and this is our job — people eventually hear about these things.’
She went to work on the book and found a total of 73 errors and exaggerations. They ranged from the obvious (Jordan is not bordered by Kuwait) to the utterly incriminating (the unisex salon at the heart of the book would not have been permitted to operate under laws at the time). She checked further with Amman’s hairdressers and their union, and could not find a single person who recalled N & D’s salon.
Al-Sabbagh submitted her damning dossier to Random House in Australia and the US, but the publishers stuck by their author. Random House Australia replied: ‘Following our discussions with Norma we are satisfied that … Forbidden Love is a true and honest account of her experiences.’
Dirty Rotten Scoundrels Page 19