Two years ago Stavro D’Amore was living the high life. He drove a Ventura Orange McLaren supercar, spent significant time sculpting his body in the gym and ran Collins Street stockbroking firm Berndale Capital Securities, a group that was the fifth-biggest seller of financial derivatives in Australia.
A consummate salesman, D’Amore looked every part the financial magnate in his tailored suit. But what he was selling was on the outer edge of respectability – high-risk financial products called contracts for difference (CFDs) to ordinary punters looking to win big by betting on any commodity, share or currency they chose. Berndale was particularly popular with people interested in margin trading in the foreign exchange market.
The company D’Amore kept also liked to live on the edge. He was friends with notorious underworld figures Mick Gatto and Angelo Venditti.
D’Amore bought Berndale from his former Israeli bosses after they quit to set up new businesses in Australia and elsewhere. He ran the business with a co-director, Daniel Kirby. Another mate who had an acquired brain injury and claims he met D’Amore at a petrol station, the equally sculpted Jonas Vong, was Berndale’s business development manager. A childhood buddy was its chief operating officer.
Berndale had hundreds of customers in Australia and was turning over millions of trades selling these high-risk products in what is a legitimate business in Australia.
Only a few years later, Berndale and D’Amore had moved most of the business from Collins Street in the CBD to an office above a strip of shops in the outer north-eastern suburb of Eltham. The company would become so strapped for cash that it borrowed money from Venditti, a lender of last resort and a man with a particularly colourful past.
The story of Berndale and its demise was laid bare during liquidators’ examinations in Melbourne’s federal court in August and September.
Venditti, also known as “Fat Ange”, was a former Carlton Crew member. He had been acquitted of hiring gangland hitman Andrew ‘Benji’ Veniamin as part of a contract killing in 2002. Venditti is now suing Victoria Police, alleging the murder plot was a stitch-up by police to coerce him into rolling on his close friend Gatto. He has never been convicted of any other offence, but is a known associate of underworld figures. He’s also well known for his close friendship with troubled former AFL player Ben Cousins.
Examinations heard Berndale used Venditti’s cash to cover its legal fees. It was also claimed during examinations by a witness that Venditti’s company, ANA International Consultants, brokered the sale of two luxury vehicles – a Porsche and a Range Rover – that were registered to Berndale and, according to allegations heard during liquidators’ examination, financed using the company’s money. Those cars would be sold for a fraction of their cost to a towing company. There are no documents showing Venditti was involved in the sale of the vehicle and no suggestion he was involved in the transaction or did anything wrong.
By 2018 Berndale, deluged with customer complaints, had run into trouble after corporate cop ASIC moved to freeze its accounts, cancel its licence and ban D’Amore from trading. When the company finally collapsed into administration the following year, around $5 million of customer money was estimated to be missing and three bank accounts believed to hold more than $2 million to safeguard customer money were, according to liquidators’ allegations in court, either not real or had been emptied and closed.
ASIC has classified Berndale as a “key matter” for enforcement on its website, though no charges have been laid against D’Amore or his business partner Kirby.
An investigation by The Age and The Sydney Morning Herald can reveal that ASIC had chances to stop Berndale before that $5 million of customer money disappeared. We can also reveal Berndale’s predecessor company’s inglorious past when it was operated not by D’Amore but by a group of entrepreneurs now accused of fraud in the United States and Israel.
Mystery documents and dealings
Examinations heard Berndale was born in 2016 out of a now notorious Australian derivatives trader, Forex TG, founded and operated by Israeli criminal mastermind Yossi Herzog. Herzog is now on the run from US authorities over fraud charges relating to his global trading scam.
Its story is a cautionary tale of the financial derivatives market in Australia – a market which has been overrun by fast boys and girls looking to make a quick fortune at their customers’ expense.
It also raises questions about why ASIC failed to stop the party sooner. ASIC investigated Berndale’s predecessor Forex TG and gave it a clean bill of health just two years before Berndale ended up relying on lines of credit from an underworld figure.
In 2015, ASIC allowed Forex TG to voluntarily suspend its licence – the same licence used by Berndale – while the group undertook a restructure and changed ownership to D’Amore. He told examinations in September that prior to that he had held senior positions at the company and was the CEO’s “right hand man” and confirmed he had worked there while it was owned by Herzog and another Israeli, Aviv Talmor.
D’Amore was never accused of any wrongdoing while a senior executive at Forex TG. But the regulator and liquidators are now investigating Berndale itself, as well as its directors, for dishonesty offences. They are asking whether Berndale traded while insolvent, made uncommercial payments to associates and if D’Amore and Kirby breached their duties as directors. No charges have been laid.
During liquidators’ examinations it was also alleged that Berndale staff doctored company documents and bank statements using a computer program to trick ASIC into believing Berndale had enough money to protect customer funds.
Examinations also heard liquidators are trying to track down a property development in which Berndale invested $1 million. D’Amore, Kirby and Vong – who all admitted during examinations they had knowledge of the deal – all gave evidence that they cannot remember where the development is located and liquidators have so far found no title deeds or formal contracts to shed light on the mystery.
Fast money, fast cars
While he never gave evidence at the liquidators’ examinations, Fat Ange’s name loomed large over the proceedings. Bridget Slocum, barrister for Berndale’s liquidators, even asked D’Amore if, during a recess in the proceedings, he had spoken with Venditti. D’Amore denied it. However, it is not suggested that Venditti benefited from Berndale’s operation, only that he had loaned money. He declined to comment for this story.
D’Amore gave evidence that he did speak often to Venditti, but only about their families. He said he had borrowed money from Venditti because of his personal legal issues. As for large cash payments – some of them six-figure sums – that flowed out of the struggling company to D’Amore, he said they were for wages and bonuses based on Berndale’s profits.
He denied he’d used customers’ money inappropriately, and insisted that he had serviced the car loans secured to Berndale using his own money. Liquidators are continuing to investigate whether there were potentially uncommercial payments by Berndale that might be clawed back for creditors.
D’Amore’s business partner, Berndale director and co-owner Kirby told the same examiners that Berndale had borrowed money from Venditti after it ran into legal trouble with ASIC. That trouble was caused by customer complaints.
Like D’Amore, Kirby would be accused by the examiners of using Berndale customers’ money to buy a $250,000-plus McLaren sports car and a home in Research worth $2 million. He denied customer money was used for the car or the home and the issue wasn’t resolved at the examination.
The home is held in his father’s name, though documents presented to the examinations showed Kirby’s father stating the purchase had been arranged for his son. Kirby’s lawyer John Gdanski said the liquidators had made mistakes in assessing the documents relating to the purchase of the property, it was owned by Kirby’s father and his client had never used any customer money for purchases.
Gdanski said Venditti had provided Berndale with loans, which included security over Berndale’s fixed assets, and that Venditti was told he was a priority lender and that Berndale’s assets were unencumbered. Venditti declined to comment through his lawyer.
Gdanski said Kirby had no idea that Herzog or Talmor had been charged and was simply following instructions during his time at Forex TG. Kirby honestly believed there was $2 million in Berndale’s bank accounts and was not aware the accounts were empty and the bank statements incorrect. Kirby had even travelled to Switzerland to try and get the money, the lawyer said. There is no suggestion Kirby was involved in Herzog’s scams or improperly obtained client money.
Examinations heard one of the key assets Berndale has left that could help repay customer funds is the group’s fleet of six luxury supercars. However when liquidators took the keys to Berndale the only car they could locate was a clapped-out 2009 Mazda.
A ghost-grey McLaren driven by D’Amore during his time at Berndale did turn up in September at a Richmond dealership. The examinations heard that before it could be repossessed a man allegedly resembling D’Amore arrived with two other men, who then left with the car. Slocum asked D’Amore in court whether it was in fact him.
D’Amore strongly rejected any suggestion he took the car and gave it to Venditti.
“That’s ridiculous,” he told the examinations when it was suggested that he took the luxury vehicle on September 18.
“I don’t like having the finger pointed at me when I’m under oath,” he added.
But again and again during two days of tense examination the finger was pointed. He later clarified during examination that he had driven past the dealership that day and may have stopped in to chat with one of the mechanics, given he was a regular customer.
Cash from a Berndale company, the examiners alleged, had been used to put down deposits in September 2017 on three apartments at the Star complex on the Gold Coast, including two in the name of two associates of drug kingpin Tony Mokbel.
D’Amore told examinations he knows nothing about the two apartments bought for the Mokbel associates. He says many of the transactions entered into by Berndale were made after he left the company in November 2018 and left all relevant documents at the office.
His departure from Berndale came after he was banned by ASIC for six years for not being fit to work in the industry, the examinations heard.
“Mr D’Amore was involved in contraventions of financial service laws by Berndale,” a press release from the corporate regulator said. He was “not adequately trained, or is not competent, to provide financial services and is likely to contravene a financial services law”.
D’Amore had been working as a broker for two decades.
It’s unclear whether ASIC will take action against Kirby, who told examinations he was thrown to the ground of Berndale’s Eltham office and assaulted by D’Amore when he tried to confront the latter about his spending of customer funds.
D’Amore denies the assault. He is also incredulous at the ASIC ban.
“They’re saying that I’m incompetent on this and incompetent on that, but they gave me the licence and made me the responsible manager,” he told the examination. (ASIC does not “make” or appoint responsible managers but would have been aware that D’Amore was listed on the licence as fulfilling that role at Berndale.)
“I got applauded by [ASIC commissioner] Catherine Armour about how much I cleaned up the industry and a few years later she banned me.”
D’Amore told examinations he was a good operator and that there was a reasonable explanation for every allegation levelled against him. He and his business partners would not doctor documents and to do so would be completely out of character, he said.
The intervention by ASIC and the freezing of Berndale’s accounts shut his business down, he told the examination. If he had known the Swiss bank accounts and other Berndale accounts were empty or didn’t exist, he said, he would easily have found other backers for the business.
Who those backers might be remains unclear.
Source: Thanks smh.com