Court hears of defendant's lavish lifestyle funded by £9m fake-syndicate fraud

An Australian court has heard how former leading racing figure Bill Vlahos allegedly used an elaborate fake betting syndicate to defraud 71 people of A$17.5 million (£9.1m/€10.7m), which went into funding his extravagant lifestyle and personal business ventures.

During a plea hearing in Victoria County Court on Tuesday, Vlahos, who last year pleaded guilty to two counts of obtaining financial advantage by deception worth A$17,520,225, for which he could face up to ten years in prison, was shown to be running a Ponzi scheme under the guise of a successful betting group.

Vlahos, 54, ran The Edge punting club between 2008 and 2013 with investors believing they were making “spectacular” returns when in fact their money was being used on business class flights, credit cards, private schooling, luxury accommodation and cars, the court was told.

During this time Vlahos also purchased Jimmy, a A$5m half-brother to Black Caviar who later died of a spider bite, for the BC3 Thoroughbreds syndicate, which he reportedly propped up with A$16m in illicit funds.

Vlahos: purchased a half-brother to the brilliant Black CaviarCredit: Scott Barbour (Getty Images)

"It's a Ponzi scheme," prosecutor Deborah Mandie said. "Money goes in, money goes out, which perpetuates the scheme."

The bets Vlahos told club members he was making he either did not place or did not resemble the figures he claimed to be putting on. He faked betting tickets, results slips and bank documents in an attempt to perpetuate the fraud.

An international betting expert named Daniel Maxwell, or “Max”, was also invented by Vlahos and brought into The Edge fold to keep funds rolling in and to prevent withdrawals.

The scam collapsed in 2013 with Vlahos initially facing 347 charges totalling more than $120 million in fraudulently obtained funds before agreeing a plea deal.

Defence lawyer Justin Wheelahan said Vlahos's plea of guilty should be a key factor in determining an appropriate sentence. Vlahos remains in custody ahead of another hearing on February 14.

If you are interested in this, you should read:

Prominent racing figure Bill Vlahos pleads guilty to A$18 million fraud

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