“Palante, in effect, received embezzled money from our clients and held that money in trust for our client. In part, this money was held by Palante in the Macrovue trading account, ”states the letter sent by MinterEllison to Mr. Constantinidis, which was submitted to Federal Court.
In the circumstances where the amount paid was paid to you in violation of the freezing order, as you know (at least now), our customers consider you obligated to return this money.
– MinterEllison in a letter to Eric Constantinidis
“Our clients claim that the shares acquired through Macrovue and the money held by Macrovue were held in trust for our clients. Therefore, the position of our customers is that they have an ownership interest in the amount paid and that you, on the face of it, own that money, or the trackable product of the amount paid, for our customers.
Mr Papas’ assets were subject to a court freezing order on June 28 and extended on July 2, 9 and 16. The transfer of the money by Mr. Papas is now the subject of a contempt of court charge for violating the orders. Judge Michael Lee issued an arrest warrant on Wednesday for Mr Papas, who has been in Greece since June 21.
“In the circumstances where the amount paid was paid to you in violation of the Freezing Order, as you know (at least now), our customers consider you obligated to return that money,” the letter from MinterEllison said.
“Our clients will view payment of the amount paid to the Federal Court of Australia as an appropriate way to reimburse the money to ensure that it is withheld pending the outcome of the proceedings.
“In these circumstances, we require that you accurately identify the current location of the amount paid, and precisely what was done with the amount paid.
“All rights of our customers are expressly reserved, including, but not limited to, the initiation of legal proceedings against you. “
Our client was not aware of a freeze order when he received and made the above-mentioned payments, nor was he aware of the Westpac trust allegations that you allege.
– Bill Parsons of W&H Partners on behalf of Eric Constantinidis
Mr. Parsons, on behalf of Mr. Constantinidis, rejected the claim that $ 720,000 was owed to Westpac.
Responding to MinterEllison, Mr Parsons said Mr Constantinidis was not aware of Forum Finance‘s insolvency until July 11.
“In February 2021, Mr. Papas or his companies had accumulated debts to our client of $ 1,265,000 for a range of services and commissions, as well as a payment that our client had made for the repair of a car from race for Mr. Papas, ”Mr. Parsons wrote.
The letter details all sums owed by Mr. Papas and his companies.
“On February 5, 2021, our client, together with Forum Group Financial Services Pty Ltd and Mr. Papas, entered into a loan deed aimed at consolidating outstanding debts. The debts remained unpaid at the end of June 2021, ”Mr. Parsons wrote.
He said on June 30, Mr. Constantinidis, while on vacation on his motor yacht in the Whitsundays, received a call from Mr. Papas asking him to pay $ 150,000 for legal fees – 90,000 $ to Panetta Lawyers and $ 60,000 to Fortis Law – because he did not have access to a computer, and he would refund the money.
Mr Parsons said that amount was repaid on July 2. However, he said the second payment, of $ 570,000, was unexpected. Mr. Papas then telephoned Mr. Constantinidis and asked him to pay an additional $ 100,000 to Panetta Lawyers, and the remaining money was a partial refund of the money Mr. Papas and his companies owed to Mr. Constantinidis and to its companies.
“Our client was not aware of a freeze order when he received and made the above payments, nor was he aware of the Westpac Banking Corporation trust allegations that you allege, “Mr. Parsons wrote.
“Our client was also unaware, when the above sums were received and paid, of any insolvency event affecting Mr. Papas / the Forum companies, let alone major fraud issues.”
The letter also reveals that Mr. Constantinidis loaned Mr. Papas $ 100,000 on August 10. Mr. Papas did not repay the funds.
“In view of the above instructions and also taking into account the limited information contained in your letter and the absence of any evidence, we cannot at this stage accept that our client holds any amounts in trust.” , wrote Mr. Parsons.
At the end of July, Mr Papas said he needed the money to buy a return ticket, according to his former lawyer. Mr Papas still has not returned to Australia after leaving the country in mid-June, although he said in July – through Mr Panetta – that he would.