One-Eyed Richmond Forum
General => General Discussion => Topic started by: Smokey on December 09, 2013, 11:42:12 AM
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Our ex-whipping boy from the footy dept left to become CEO of BC3 Thoroughbreds. Might not have been his sharpest career move:
Racing has a Ponzi scheme - and the fallout will be enormous
When the term 'Ponzi scheme' is mentioned these days, the names Bernard Madoff and Allen Stanford instantly spring to mind. The pair of them ran multi-billion dollar frauds (US$60bn and $8bn respectively) that destroyed the lives of thousands of investors who had put their life savings into a 'wonderful' investment strategy. How so many people were sucked into the scheme is baffling to those on the outside. The lifestyle, the sales pitch, the success stories of the early investors - I suppose it all adds up.
So where does this link to racing you ask? A prominent Australian 'racing identity' this week has been reported to have lost access to a bank account with punters' club funds of $194m in it. Firstly - is there a worse term for anyone to be labelled with that 'racing identity'? It ALWAYS ends up meaning shonky crook! Secondly - who the hell has a punters' club with an active bankroll in the tens of millions? It simply can't be done.
The media has just started to scratch the surface on this case:
- Racing identity Bill Vlahos denies punting club losses http://www.heraldsun.com.au/news/victoria/racing-identity-bill-vlahos-denies-punting-club-losses/story-fni0fit3-1226773715746 (http://www.heraldsun.com.au/news/victoria/racing-identity-bill-vlahos-denies-punting-club-losses/story-fni0fit3-1226773715746)
- $5m bill for Caviar's brother unpaid
- Punters' club man faces suit over Black Caviar's half-brother http://www.smh.com.au/national/punters-club-man-faces-suit-over-black-caviars-halfbrother-20131206-2yx5t.html#ixzz2mkOEUrvz (http://www.smh.com.au/national/punters-club-man-faces-suit-over-black-caviars-halfbrother-20131206-2yx5t.html#ixzz2mkOEUrvz)
but my sources tell me there is a lot left to expose.
Let's examine the alleged punters' club run by Bill Vlahos:
There was no prospectus for potential investors, no contracts securing their investments, nothing at all in writing. No public records of the club activity. All members were sworn to secrecy. (Anyone hearing alarm bells?)
Members would put money into the club and then receive regular dividends. Members were promised a return of over 6% per quarter, adding up to 25% annual profit on investment, and that's what the early investors received. It was a betting syndicate. Since when are betting returns consistent?
All the dodgy betting investment scams in Australia are based on the Gold Coast, so surely this one had to be legitimate? The syndicate was allegedly betting on Melbourne and Sydney racing each week, but with 'offshore outlets' via a broker. Punters worldwide will tell you that getting on is harder than ever. As soon as you start winning, your cards are marked and the industry works against you to shut you down. Corporate bookies shut or heavily restrict your account. Betfair hits you with a Premium Charge of up to 60% of your profits. There simply aren't offshore outlets who will let you bet millions on Australian racing, and there certainly aren't charitable betting firms out there who will let you win a million dollars per quarter to keep up with your promised 6% quarterly return. There is more truth in a Harry Potter novel!
The master system behind this money tree:
"Mr Vlahos developed his system during a two-year stint living near Randwick racecourse when he was not working full-time.
He said he used his mathematical training gained during his La Trobe University psychology degree to come up with a way to beat the odds.
Mr Vlahos said that members of his club trusted him despite the lack of written contracts, and accepted that he collected five per cent of the winnings.
"There's nothing in writing because it's a punting club and it's a trust punting club, the people that are in it have made the decision that they understand how the punting club works between me and them," he said."
"Mr Vlahos said that the maths-based system he used for the punting club brought constant quarterly profits back into the common pool."
The "mathematical training gained during a psychology degree" allowed him to develop a system, which he coincidentally did while living next door to one of the biggest racecourses in the country. I'm calling rubbish on that one. Wagering is an incredibly complicated business which requires an enormous workload just to keep up with continually evolving markets. Maths alone will not make you a profit. Form study alone will not make you a profit. The best money management scheme of all time will not make you a profit. Anyone who tells you they can make consistent, unlimited profits on horse racing has as much credibility as a politician....
The reference material for a successful and disguised Ponzi scheme is the success of the early members. They make their money from introducing new members, although it is highly likely they are unaware of the mechanics of it. Every new member brought into the syndicate bring new liquidity, which is actually the profit they supposedly make every week from their betting investments. The ground-floor investors do very well out of it, and continue to innocently provide glowing references for anyone else considering joining. For them, everything seems above board. So Bob is considering putting money in, he looks at Jim who has been in for a year and done well, then he looks up to Max who has been in for longer and is genuinely displaying the lifestyle of someone making solid, regular profits from their investments. So Bob thinks he's onto a good thing, everyone knows each other and believes what they see, and injects more money into the 'club'. This cycle continues with everyone profiting until it gets too big. Suddenly the rate of signing up new members starts to fall away, the liquidity dries up and so does the flow of profits. Vlahos claims that they had only lost money in one quarter in eight years - that's all it needs to start crumbling....
One piece of anecdotal evidence I have heard is of an early member in regional Victoria who had an incredible run signing up new members - while they all bought cars and swimming pools with their profits, he kept re-investing his profits to create that golden nest egg for retirement. I'm told he believed his share of the syndicate pot was as much as a third - in the vicinity of $60-120m! I'm tipping he'll be rather disappointed.
The Westpac account allegedly containing the $194m hasn't been locked by the bank, it hasn't gone missing, they haven't lost the account due to a computer glitch. It never existed in the first place.
Bill Vlahos doesn't exactly have the cleanest of connections in the racing industry - he has a link to Tony Mokbel, the big time drug dealer who laundered much of his cash flow through various forms of gambling. When the heavy hand of the law started closing in on Mokbel and his associates, it was Vlahos who took over ownership of a horse owned by Tony's brother Horty Mokbel, Pillar of Hercules. The chances of that being coincidental are very slim. And it was this love of horses which reports say, saw him come up with another front for the Ponzi scheme.
Vlahos was most famous for his backing for BC3 Thoroughbreds - a new age bloodstock syndication company who entered the market with a bang, paying huge prices for yearlings, including $5m for a half-brother to Black Caviar. It seemed over the top at the time, their attitude was "we weren't going to be outbid on this one". And now we know why. Value didn't seem to matter to them. So long as the horse could attract investors, they'd be fine. The sales company, Inglis, have yet to be paid for the horse. This isn't uncommon, trainers often take a while to syndicate horses, but they have to pay interest on their debts. It is reported that several people have paid cash for shares in the blue-blood colt, but none of that money has been passed onto Inglis - the allegations are that it has all been tipped into the Ponzi scheme.
If all this is true, and I have no reason whatsoever to doubt my sources who have seen this building up for several years, there are many highly respectable people caught up in this, completely innocently. Investors from Melbourne society, football clubs, players and administrators. Highly respected administrators who have left their jobs to become part of the BC3 'success story'.... My sources tell me that BC3 staff were told this morning Australian time that the company is no longer. I'd expect most of them knew nothing of all this until very recently.
The interest started to mount up on 'Jimmy', the half-brother to Black Caviar. Pressure was on to find more funds to put into the club - surely this sham would last forever? Vlahos allegedly relocated to Singapore earlier in the year - to secure more suckers? To get away from the front-line pressure of the scheme? To stay away from investigators and start preparing an escape route?
Theories of what has happened to 'Jimmy' are plentiful. The SMH article said 'the insurance policy can only be paid out in death'. Spider bite, heavy dose of anti-biotics from a vet which is rumoured could be linked to laminitis, a potentially fatal disease.... If the horse survives this ordeal which he is still recovering from, a successful life on the racetrack must be highly improbable now. A stud career for an unraced colt, no matter how esteemed the bloodlines, will be nowhere as lucrative as it could have been with a few wins under his belt.
This scandal has only just started to hit the courts, brought upon by legal proceedings from an unhappy member who is unlikely to ever see his money again. Vlahos' assets have been seized, his passport taken away. Criminal reporters will dig further into this, further than the traditional racing media who are always reluctant to expose/embarrass people within the industry. I'm told investigative journalists from The Age have been close to breaking this story but were holding back - articles from their rivals may now force their hand.
The fallout from this will be enormous. Racing can't afford to have thousands of people with significant sums of money involved become disenchanted with the sport. When the Nathan Tinkler empire crumbled, the people who felt it most were the businesses and staff he owed money to. This scandal goes so much wider. And yet it's not a new blight on the racing industry. Go back to the 80s and a Melbourne conman called Joe Talia did something similar, using the gift of the gab to convince people to invest in his schemes. There were no miracle investment schemes, it was just him peeing the money away at the racetrack, in casinos or living far above his means.
http://www.sportismadeforbetting.com/2013/12/racing-has-ponzi-scheme-and-fallout.html (http://www.sportismadeforbetting.com/2013/12/racing-has-ponzi-scheme-and-fallout.html)
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Shonkier than the boxing industry.
So is punt road waiting with open arms for the prodigal son to return? Need him to take control of contracts, cant have Dan Richardson dragging out negotiations
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Norf preparing a massive offer
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Norf preparing a massive offer
for helmut or BCs bro?
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helmut of course :shh
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helmut of course :shh
He could buy Majak for half the price and he'd be hung like Black Caviar. :shh
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Andrew Rule from the HUN was on SEN this morning and he & the SEN blokes were saying that BC3 Thoroughbreds went into voluntary Administration yesterday (9/12/2013)
There is confirmation via the Australian:
"BC3 Thoroughbreds, which invests heavily in yearlings and on- sells shares to clients, went into voluntary administration yesterday."
From: http://www.theaustralian.com.au/sport/turf-thoroughbreds/bill-vlahos-received-facial-injuries-when-assaulted-by-three-men/story-fnajufri-1226779253697
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Well played RichmonD :clapping
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Sounds like the BC3 company Craig Cameron left Richmond for is going to or has just gone bust.
http://www.theage.com.au/national/syndicate-leader-bashed-as-punters-fear-huge-fleecing-20131209-2z1x8.html
As CEO you'd assume he would have a good knowledge of the businesses operation, finances in particular. This raises question mark about CC's judgement at the least.
Are we lucky to see the back of him?
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As CEO you'd assume he would have a good knowledge of the businesses operation, finances in particular. This raises question mark about CC's judgement at the least.
Not necessarily - not saying it's right or wrong just saying not necessarily
Yes as CEO he should have a sound knowledge of operations but he would be relying on the finance gurus to keep an eye on the books and giving him the right info. We aren't talking about a $500k business here we are talking about a multi million dollar business that was supposedly being funded by this dodgy "punting club".
Going by reports about this mess this bloke Vlahos has been doing alot behind the scences that no one had a clue about. The fact that (again going by reports) CC called in the administrators suggest that he may not have had a clue what this dude Vlahos was doing.
Look at the number of cases of employees fleecing their employers and those in charge didn't have a clue
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As CEO you'd assume he would have a good knowledge of the businesses operation, finances in particular. This raises question mark about CC's judgement at the least.
Not necessarily - not saying it's right or wrong just saying not necessarily
Yes as CEO he should have a sound knowledge of operations but he would be relying on the finance gurus to keep an eye on the books and giving him the right info. We aren't talking about a $500k business here we are talking about a multi million dollar business that was supposedly being funded by this dodgy "punting club".
Going by reports about this mess this bloke Vlahos has been doing alot behind the scences that no one had a clue about. The fact that (again going by reports) CC called in the administrators suggest that he may not have had a clue what this dude Vlahos was doing.
Look at the number of cases of employees fleecing their employers and those in charge didn't have a clue
Assuming he was duped like the other punters, you'd still have to wonder why he didn't clue in to the shonky nature of the business even during the interviews. Where does the cashflow come from? What are the outgoings like? So we have this magic formula that can beat the odds, which agencies do we place bets with? How does it beat the odds?
How many bets do we lay? and so on
Maybe he got convincing answers and he has just cottoned onto it as he got into the job.
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Might be a few tigers short of $$$$$$
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If youre jumping into these things with no receipts, written contracts etc you have no one to blame but yourself. If it seems too good to be true, it usually is
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Apparently some dude in Dubai has all the missing cash and its return is expected in the next two weeks. :rollin I reckon Melbourne being premiers in 2014 is far more likely. :lol
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Apparently some dude in Dubai has all the missing cash and its return is expected in the next two weeks. :rollin I reckon Melbourne being premiers in 2014 is far more likely. :lol
More chance if the money was with some dude in Nigeria. :lol
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I'm sure he'll give it all back for a one time processing fee.
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Police have task of unravelling puzzling tale of Bill Vlahos and his punting club
Andrew Rule
Herald Sun
December 11, 2013 12:01AM
DETECTIVES must have an open mind at all times. So those investigating the mysterious alleged bashing of Bill Vlahos - and torching of his car - have to eliminate the possibility he deliberately injured himself and burned his own vehicle.
This does not mean the man in the middle of the collapsed betting system he called "The Edge" would dream of doing such a thing. But police must still carry out "routine inquiries".
And, so far, the investigation has raised more questions than answers.
Trusted employees of BC3 Thoroughbreds who rushed to the Connewarre property on Sunday night have told detectives the yellow jerry can of diesel found near the smouldering utility came from a shed on the property. One large plastic container might look like another, but this one had a distinctive handwritten label on it.
This has led puzzled police to conclude that if intruders attacked Mr Vlahos (as he claims) then they apparently first searched the property for fuel rather than bringing it with them.
While forensics experts check who handled the container, investigators are pondering other inconsistencies.
A neighbour who found the agitated Mr Vlahos on the ground near the property's front gate recalls him saying "three men" had attacked him. But another neighbour recalls him saying "two men".
In one version, Mr Vlahos allegedly said the attackers were "Lebanese", but another witness thought he said "Yugoslavs".
Witnesses are, of course, reliably unreliable.
There are other problems for those trying to find the truth behind this scandal. :Investors" are embarrassed, shattered and angry.
A source close to BC3 Thoroughbreds - the bloodstock and racing arm of the Vlahos enterprises - has told people that "all the paperwork" for the punting club happened to be in the car when it burned. This is terrible luck for someone who has already mislaid, supposedly, $194 million of other people's money.
The same source says it was incredibly unlucky that Mr Vlahos visited the Connewarre property on Sunday night - as he hadn't been there for months, and had not told anyone he was coming. It was a 100-1 shot that intruders would fluke catching him there.
It all means a policeman's lot is not a happy one. Especially, in this case, for those who have invested their own savings in the scheme.
One veteran policeman admitted yesterday he cashed in his long service leave to "invest"and he knows several others who have put in large sums - including one who says he's owed more than $500,000. The policeman resents that he was persuaded against his own better judgment.
But his problems pale against those of a former AFL player and man-about-town, who not only invested his own money in the scheme but spruiked its benefits to others.
The former player has gone into hiding. A bad day turned much worse on Monday morning when two large, menacing men walked into his city office.
They stayed just long enough to deliver an ultimatum and a threat. When they left, he was so frightened he could hardly speak. It seems the men blamed him for certain people losing large amounts.
A colleague told him to go straight home and pick up his wife and flee, because some very ugly bikers are out to mess up his face.
http://m.heraldsun.com.au/news/opinion/police-have-task-of-unravelling-puzzling-tale-of-bill-vlahos-and-his-punting-club/story-fni0ffyu-1226780160052 (http://m.heraldsun.com.au/news/opinion/police-have-task-of-unravelling-puzzling-tale-of-bill-vlahos-and-his-punting-club/story-fni0ffyu-1226780160052)
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But his problems pale against those of a former AFL player and man-about-town, who not only invested his own money in the scheme but spruiked its benefits to others.
The former player has gone into hiding. A bad day turned much worse on Monday morning when two large, menacing men walked into his city office.
They stayed just long enough to deliver an ultimatum and a threat. When they left, he was so frightened he could hardly speak. It seems the men blamed him for certain people losing large amounts.
A colleague told him to go straight home and pick up his wife and flee, because some very ugly bikers are out to mess up his face.
??
I wonder who this is?
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But his problems pale against those of a former AFL player and man-about-town, who not only invested his own money in the scheme but spruiked its benefits to others.
The former player has gone into hiding. A bad day turned much worse on Monday morning when two large, menacing men walked into his city office.
They stayed just long enough to deliver an ultimatum and a threat. When they left, he was so frightened he could hardly speak. It seems the men blamed him for certain people losing large amounts.
A colleague told him to go straight home and pick up his wife and flee, because some very ugly bikers are out to mess up his face.
??
I wonder who this is?
x2 PM please.
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I tipped this.
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But his problems pale against those of a former AFL player and man-about-town, who not only invested his own money in the scheme but spruiked its benefits to others.
The former player has gone into hiding. A bad day turned much worse on Monday morning when two large, menacing men walked into his city office.
They stayed just long enough to deliver an ultimatum and a threat. When they left, he was so frightened he could hardly speak. It seems the men blamed him for certain people losing large amounts.
A colleague told him to go straight home and pick up his wife and flee, because some very ugly bikers are out to mess up his face.
??
I wonder who this is?
x2 PM please.
Petrenko?