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‘Rings alarm bells’: Judge queries Papas’ low property price

The business partner of alleged fraudster Bill Papas attempted to sell a multimillion-dollar home in Sydney’s inner west for a knockdown price despite the surging property values in the city, raising their bankers’ suspicions about the sale.

The strange reversal in the value of the stately home in Rozelle did not go unnoticed by Justice Michael Lee, who quipped he “didn’t come down on the last shower” when hearing on Friday about the eyebrow-raising listing.

The home in Rozelle that was stopped from hitting the market at a bargain-basement price.

The home in Rozelle that was stopped from hitting the market at a bargain-basement price. Credit:Sydney Morning Herald

The property offer was raised during an application by Westpac to freeze more assets that were allegedly purchased using the proceeds of a $400 million fraud of the bank. These included a yacht in Miami that The Age and The Sydney Morning Herald revealed earlier this month was being actively marketed for sale.

Westpac and two other lenders – Société Générale and Sumitomo – have taken civil action in the Federal Court, accusing Mr Papas, his business partner, Vince Tesoriero, and Forum Finance of defrauding the lenders of $400 million.

Hearing that Mr Tesoriero’s agents were marketing a property purchased in 2018 for $4.1 million for a — relatively speaking — bargain-basement price of $3.1 million to $3.3 million, a clearly frustrated Justice Lee remarked that “it must be the only property in Rozelle purchased in an arm’s length sale for $4.1 million in 2018 which has stayed at that value or has decreased in value”.

The property is held by Mr Tesoriero on trust for Mr Papas and himself.

Counsel for Westpac, Jeremy Giles, SC, agreed with Justice Lee.

“That’s our point, your honour. Our client has the resources to do a desktop valuation, and we estimate it was valued at $4.3 million to $5 million, but we realise the limitations of a desktop valuation,” Mr Giles said.

“The proposed marketing price given to us [Westpac] was not that $US4.1 million, and it was $3.1 [million] to $3.3 [million]. That was then said to be a mistake, and it was going to between, I think, $3.5 [million] and $3.7 [million].”

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