Friday, 22 January 2021
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bill vlahos pleaded guilty

tycoon confesses fraud of 18 million

Australian gambling tycoon confesses fraud of 18 million US dollars

Australian gambling tycoon Bill Vlahos (54) today pleaded guilty in court in Melbourne for cheating his customers on horse bets for a total of $18 million. In the Melbourne District Court, the former chairman of the horse racing organisation BC3 Thoroughbreds and owner of the betting club “The Edge” admitted to having obtained a financial advantage through deception. He is said to have built a complex betting ring that collapsed in December 2013 when several players demanded payouts. In court, Vlahos stated that he had actually issued betting slips to players. The horses they were betting on and the betting amounts were indicated on them. But instead of placing bets for his customers, Vlahos deposited the money into his own bank account. A total of 68 people are said to be affected by the fraud. The public prosecutor’s office assumes that they will testify in court in the near future.

Rip-off on a grand scale

According to court records, Vlahos founded the betting club “The Edge” in 2002/2003. He is said to have claimed that he had a sophisticated system to choose winning horses. According to the documents, he sent out betting slips on Friday evenings or Saturday mornings. The names of the horses on which he allegedly bet at races in Melbourne and Sydney were noted on these. In one case, for example, Vlahos claimed to have bet $219,000 on the horse “Gorky Park” and won $657,000 in May 2008. In fact, however, he is said to have bet only 2,500 US dollars and won 9,000 US dollars. Since Vlahos has used the money of some investors to pay out others, the betting club is referred to in court documents as the “Ponzi Program”.

Ponzi scheme

The Ponzi scheme was named after the famous fraud Charles Ponzi. Ponzi bought international reply coupons (internationally valid vouchers) in Europe and sold them at a higher value in the USA. He recruited customers to whom he promised a return of 45 days or a doubling of their investment within 90 days if they invested in these reply coupons.

However, many customers did not demand their return, but “let it go on”. Instead of actually buying reply coupons, Ponzi stacked the money in drawers, paper baskets and on the floor and increased his fortune to millions. Only when one of the customers tried to claim his money without success did the media and the tax office become aware of the fraud. Only a few reply coupons were found during searches. At that time, however, Ponzi had already entrusted 40,000 customer funds totaling $15 million.

Just like the historical fraudster Charles Ponzi, Vlahos is said to have encouraged his customers to put more and more money into the betting club. He is said to have told new investors that his wife Joanne worked in a pub opposite the Randwick racecourse in Sydney, where she received many tips that he thought were completely worthless.

He, on the other hand, found a much better way and applied his knowledge from the statistics courses he had completed during his psychology studies.

Vlahos testifies to his wife’s innocence

The police were able to secure e-mails between Bill and Joanne Vlahos proving how betting numbers were cut out and inserted into old betting slips. Vlahos is said to have used the money to buy a holiday home, luxury cars, designer clothes and school fees in Singapore, among other things. Meanwhile, he had repeatedly convinced his investors not to let their profits be paid out. Instead, they should reinvest them to improve their chances of making a profit. When the scam was discovered, Vlahos filed for bankruptcy. E-mails show how he explains to his wife that she is completely innocent. Vlahos does not have to appear again in court until early February. Until then, he can spend Christmas and the Australian summer holidays with his wife and two teenage children. However, as Judge Trapnell pointed out, it is inevitable that he will be sent to prison for the severity of his criminal days.