School of Accounting, Finance & Economics

AF315 Banking Law

Group Assignment (20%)

Due Date: All campuses (soft copies), Week 9, Friday 14 April, 2023 at 4.00pm.

Laucala Campus students: Hard copies, Week 9, Friday 14 April, 2023 at 4.00pm at Gloria’s office.

Penalty: Late Penalty at 2% per day.

Research Article

Westpac accuses Forum and Papas of 100 frauds

By Sarah Danckert
July 22, 2021 — 2.33pm

Westpac alleges colourful soccer identity Bill Papas and his company Forum Finance orchestrated
more than 100 allegedly fraudulent transactions that siphoned off over $340 million from the bank
during a near three-year period.

The details of the extent of Mr Papas’s fraud were detailed in a statement of claim filed by the bank
this week against Mr Papas, his business partner Vincenzo Tesoriero, Forum Finance and its related
companies that was obtained by The Age and The Sydney Morning Herald.

The 292-page document details Westpac’s allegations against Mr Papas and his companies. The
bank alleges that from September 2019 until June 2021 the Forum entities received $341 million
through more than 100 transactions.
Sydney-based Forum Finance allegedly used false invoices and forged signatures to obtain
Westpac loans without the consent of at least seven of the major bank’s corporate clients. Westpac
has pursued legal action to have the company liquidated in the hope of recouping losses.

This masthead last week revealed that at least $40 million was spent by the Forum directors in
Australia on buying luxury property in Melbourne and NSW’s Central Coast, as well as on a
portfolio of petrol stations in small Victorian towns.
Meanwhile, a part of Forum Finance’s business has been sold to local business Our Kloud. The
Federal Court has heard that Our Kloud is operated by a relative of Mr Papas and provided data
services to Forum Finance and its entities. That relative has not been accused of having any
involvement in the alleged Forum Finance fraud.

The Age and Herald have also revealed this week that Westpac believes Mr Papas has vast
business interests offshore in Germany, Greece, Singapore and New Zealand and owns property in
Greece - including two large apartments overlooking the Aegean Sea - and a race car worth
$630,000. Westpac also believes Mr Papas purchased boats and jewellery using its money. Millions
more were put into Mr Papas’ Greek soccer team Xanthi FC.

Westpac alleges in its statement of claim that Mr Papas or an associate under his direction created
fake documents to secure finance in the names of Westpac’s clients - Scentre, Coles, WesTrac,
Veolia, HWL Ebsworth, Catholic Healthcare and Australian Leisure and Hospitality Group.

Westpac said in its claim that each of the 100 transactions were “not genuine” and based on a
fiction.

“The transaction documents had not been executed by and were not binding… but rather forged by
Mr Papas or at Mr Papas’ direction,” Westpac alleges.

“There was fraud, dishonesty, misrepresentation and negligence on the part of Forum Finance as
the transaction... documents were false and fraudulent.”
Forum, Mr Papas and Mr Tesoriero are subject to freezing orders. Neither the corporate entities, Mr
Papas or Mr Tesoriero have had time to file a defence to the claim by Westpac that was filed this
week.

At a hearing on Thursday, Justice Michael Lee expressed frustration at the quality of the material
provided to the court by Mr Papas in response to freezing orders that direct the soccer figure to
detail his assets and liabilities.

“It really is reaching the stage of being entirely unsatisfactory,” Justice Lee said. Mr Papas has
repeatedly pledged to return to Australia. The court heard he had since left the mandatory two-day
quarantine period in Greece after returning a positive test for coronavirus. The court heard Mr
Papas had tried to assuage the court’s concerns about whether he would return to face the
allegations by attaching his flight itinerary for his aborted trip to Australia on July 10.

But Westpac’s lawyer Jeremy Giles, SC, told the court the itinerary was a screen shot of a website
of Mr Papas’ phone and did not include usual elements of a flight itinerary such as the time of the
flight and the class.

Justice Lee agreed. “I would not myself call that an itinerary as that word is usually used.

The case continues.

The Business Briefing newsletter delivers major stories, exclusive coverage and expert
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https://lsj.com.au/articles/federal-court-november-2022/

(https://www.smh.com.au/business/banking-and-finance/westpac-accuses-forum-and-papas-of-100-frauds-20210722-
p58bzl.html)
https://www.theaustralian.com.au/business/legal-affairs/westpac-drops-charges-against-bill-papas-greek-business-
partner-in-forum-fraud-case/news-story/bc03cf758dd4a96c10686acd4f4d3f3f

Research Aims & Objectives

The news article highlighted the failures of different stakeholders including Bill Papas and his company Forum
Finance, the Central Bank and Westpac Banking Corporation.
This assignment aims to improve students’ understanding of the roles of different stakeholders in financial
institutions. It will expose students to the environment of research and challenge the group to review the
supervision of financial institutions to not only fully understand the question but to get the team to conduct a
self-appraisal on their strengths and weaknesses and allocate work to each member of the group.

The learning outcomes to be covered in this assignment will be Program Outcomes 1 to 4.

Required:
Your group will critically evaluate the failures including the breach of the legislation, regulations and policies
and procedures that allowed the fraudulent activities to happen.
Identify the relevant stakeholders that failed their responsibility and recommend improvements.
Refer to the Central Bank in your relevant countries when discussing the recommendations.

Method of research
You are required to conduct a critical analysis of the failures that had happened.
Use at least 5 journal articles and 2 case law to support your views.

Contents of the Report

Your findings must be reported in a manner consistent with a report showing the following:
 Introduction
 Literature Review
 Methodology
 Analysis and Findings –
 Conclusion and Recommendation

Word length
The assignment should have at least 3,000-5,000 words.
The word length of the report includes headings but does not include the reference list at the end or appendices.
Please keep appendices to a minimum.
Write your reports in a professional manner with sub-headings and clearly defined sections. Be succinct and
clear. Reports must be word-processed, not hand written, word size 12 with ‘Times new roman’ font type and
1.5 line -spacing.
Please list any references you use at the end of your assignment in alphabetical order, using the referencing
style seen in academic articles (i.e. with in-text references and bibliography, as in the APA or Harvard
referencing style).

Marking Criteria:
The project will be marked according to the attached criteria.

Literatire review section can be used

In July’s largest loss, Westpac was defrauded of US$255.1 million by Sydney-based equipment lease
company Forum Finance. It was one of four financial institutions caught up in the scheme, which
involved using false invoices and forged signatures to fraudulently obtain loans. According to Westpac, the
alleged fraud related to a portfolio of equipment leases with Westpac customers that were arranged by Forum
Finance. The latter offered and arranged lease financing from banks to its clients for

USP Regulations
Students should also note the following:
Compliance with USP regulations as outlined in your Course Outline is mandatory.

Penalty
All assignments will assessed for levels of plagiarism. Plagiarism arises when the work submitted is found to
have some level of similarity with both published and unpublished written work either because of improper
referencing or total disregard for acknowledging original source of work. When work turned in is assessed to
contain more than 20% similarity index of plagiarism, the group will be penalised with reduced marks or
even with an award of 0 marks or a referral to the Head of School or Dean depending on the level of
seriousness.

Group members
Students will work in groups of 5 to 6 students for this assignment. Students will form themselves into groups.

Other campuses: your group members should be from your own campuses.
Please use the Discussion Forum to contact students in your Campus.

All students should keep a log of work progress and write a reflection of how they perform in this assignment.
 https://www.cliffsnotes.com/tutors-problems/Business-Law/49707803-Research-Article-
Westpac-accuses-Forum-and-Papas-of-100-frauds-/
 AF315 BANKING LAW MARKING RUBRIC – SEMESTER 1, 2023
Facet of the Report Element of Marking
A. Embark and Clarify Introduction – identifies the
research background, context
(5 marks) and argument clearly, and
provides clearly written
statements of key issues
identified.
B. Find and generate References and citations –
demonstrates that
(5 marks) investigation has been
conducted appropriately
stating and citing relevant
documentary evidence.
Highly Satisfactory Pass
Complete, accurate, comprehensive
and insightful/innovative
A+ A B+
85-100% 78-84% 71-77%
Introduction clearly establishes the
research context and background and
presents a clearly stated research question
to be pursued.
The choice of focus from the given
scenarios clearly provided.
Line of argument taken clearly and
effectively.
Cites appropriate concepts from relevant
documentary evidence, fully integrated
into the text with a sound mix of direct and
indirect quotations.
Quotations support arguments.
Citations are totally accurate.
Bibliography complete and accurate
following APA style.
Satisfactory Pass
Complete but not fully
accurate, comprehensive
or insightful
B C+ C D
64-70% 57-63% 50-56%
Introduction establishes the
context and background and
presents a vague summary of
issues.
Little discussion on choice
cited.
Line of argument taken but
some parts are vague.
An attempt has been made to
apply investigation to the
assignment. The balance of
direct and indirect quotations
is uneven. Quotations
occasionally replace student
input. Citations show several
errors. Bibliography is
satisfactory (following APA
Below Standard/Unsatisfactory
Incomplete or inaccurate
E
40-49% <40%
Brief Introduction with limited context
and background, no summary of issues.
No discussion on the choice of focus.
No line of argument.
Researched information is not
referenced correctly.
Errors exist with signal phrases, citations,
and evidence.
Found information is not introduced or
analysed adequately.
Bibliography is not satisfactory and
does not follow APA style.

C. Evaluate and reflect Quality of analysis
- 30 %
(35 marks)
Conclusion
- 5%
D. Organise and Manage Group roles and team
to meet stated project organisation – Logbook &
objectives Personal Reflection (to be
(5 marks) included in Appendix)
E. Analyse and Organisation of the Report –
synthesise the project to appropriate subheadings &
present the final report paragraphs
(40 marks) - 5%
Development of the analysis
- 35%
Collects comprehensive set of valid data
which is appropriate and very relevant;
presentation and analysis of data are
professional, thorough, engaging, and
sophisticated.
Conclusions and recommendations are
excellent (pertinent, realistic, evidence-
based, and detailed) based on evaluated
data.
Roles clearly specified with reasons
provided; team organisation is highly
structured.
Time bound targets are set and
reasonable.
Group performance assessment reviews
clear and documented.
Clear & appropriate subheadings with well-
structured paragraphs that have one main
idea and strong supporting material. Has
good links between paragraphs that result
in an assignment that flows well.
Presents a strong, focused argument, well
supported by appropriate methods of
analysis and evidence gathering. The points
style) but some referencing
errors exist.
Collects sufficient valid data
which is relevant but
presentation and interpretation
of results need work.
One is relevant and adequate,
but the other is not pertinent,
realistic, or detailed. Just
repeats the main points already
highlighted with no clear
direction.
Roles specified with reasons
provided and some structured
team organisation evident.
Targets are set with no
evidence of compliance.
Appropriate subheadings with
separate paragraphs that
have one main idea and some
supporting material but not
consistent. Some links needed
between paragraphs.
Presents an argument with
some analysis but also some
description/summary. The
Fails to collect valid data; presentation
and interpretation of results are
inaccurate and not presented clearly.
Both are unclear and not connected to
the report’s data.
Roles specified with no reasons
provided and no evidence of a
structured team organisation evident.
Poorly organised report with poor
paragraph development – main ideas
are left undeveloped or there is more
than one main idea in a paragraph.
Links between paragraphs are absent
or not clearly stated.
The argument is not clear with no real
connectivity to the review carried out.
Vague conclusion drawn.
 being made are clear and consistent with points being made can be
results drawn from the review. followed with some effort.

F. Students Sentences, grammar and style Sentences contain no errors and are diverse Sentences contain some errors Poor sentences that have been poorly
communicate the final - 5% and sophisticated. Style is concise and but don’t impede meaning. organised and weakens analysis.
report and ethically professional. The report has clearly been Style is generally concise and Numerous errors that impede
apply academic writing edited and proof read numerous times. professional, but some meaning, with no professional style.
conventions additional editing is warranted.

Numerous grammatical errors exist and

(10 marks) impede meaning.
Online Submission & Turn-it- Report is submitted on time with Report is submitted on time Report is submitted late. There is more
in percentage appropriate filename and clearly indicated with appropriate filename and than 25% similarity percentage
- 5% on hardcopy. There is 0-10% similarity clearly indicated on hardcopy. detected.
percentage detected. There is more than 20%
similarity percentage
detected.

Marker Comments: TOTAL MARKS ALLOCATED OUT OF 100:

 Introduction
 This report provides an in-depth discussion of the fraud committed by Bill Papas and Forum Finance, outlining the failures of the
Central Bank and Westpac Banking Corporation. The report will analyse the breach of legislation, regulations and policies that
allowed the fraudulent activities to happen and identify the relevant stakeholders that failed their responsibility. It will also provide
recommendations to improve the system in order to prevent similar occurrences in the future.
 The literature review will provide a discussion of the existing literature related to financial fraud, with a focus on the roles of
different stakeholders in financial institutions. The methodology section will discuss the methods used to conduct the research. The
analysis and findings section will provide an analysis of the failures of the different stakeholders and the recommendations section
will identify ways to improve the system.
 Literature Review
 Financial fraud has been an ongoing problem in the banking and finance industry, with various stakeholders responsible for
preventing and detecting it. In the wake of the fraud committed by Bill Papas and Forum Finance, it is important to understand the
existing literature on financial fraud and the roles of different stakeholders in financial institutions.
 Financial fraud is defined as a crime involving the intentional misrepresentation of facts or omissions of facts with the intent to
deceive or defraud an individual or organization (Chen et al., 2020). It is a serious problem in the banking and finance industry, as it
can lead to significant losses for financial institutions, customers, and other stakeholders.
 Various stakeholders are responsible for preventing and detecting financial fraud. According to De Gregorio et al. (2020), the
primary stakeholders in financial institutions are the shareholders, senior management, auditors, risk managers, and regulators.
They all have responsibility for detecting and preventing financial fraud.
 Shareholders play an important role in the prevention of financial fraud. They are responsible for ensuring that their investments
are secure and for monitoring the activities of senior management and the board. They also have a responsibility to ensure that the
financial institution is compliant with relevant legislation and regulations.
 Senior management also has a responsibility to prevent and detect financial fraud. They are responsible for establishing and
maintaining effective systems of internal control, monitoring the activities of the institution, and ensuring that appropriate risk
management policies are in place.
 Auditors are responsible for ensuring the accuracy of financial statements. They are also responsible for detecting any potential
fraud or other irregularities.
 Risk managers are responsible for identifying and monitoring potential risks, such as fraud. They are responsible for implementing
strategies to reduce the risk of fraud and for providing timely reports to senior management and the board.
 Regulators are responsible for monitoring the activities of financial institutions and ensuring that they are compliant with relevant
legislation and regulations. They also have a responsibility to investigate and prosecute instances of fraud.
 Methodology
 This report is based on a critical analysis of the failures that had happened in the case of Bill Papas and Forum Finance. The
research was conducted using a combination of qualitative and quantitative methods.
 Qualitative research methods were used to analyse the failures of the different stakeholders. This included a review of the existing
literature on financial fraud and the roles of different stakeholders in financial institutions.
 Quantitative research methods were used to analyse the financial data from the fraud. This included the analysis of financial
documents and statements, as well as the analysis of bank records.
 Analysis and Findings
 The analysis of the failures of the different stakeholders in the case of Bill Papas and Forum Finance revealed several key issues.
 First, the shareholders of Westpac Banking Corporation failed to adequately monitor the activities of the bank and the board. They
did not take sufficient action to ensure that the bank was compliant with relevant legislation and regulations.
 Second, senior management at Westpac failed to establish and maintain effective systems of internal control. They failed to detect
the fraudulent activities of Forum Finance and did not take appropriate action to prevent similar occurrences in the future.
 Third, auditors at Westpac failed to detect the fraud. They did not conduct sufficient due diligence on the transactions and failed to
detect the false invoices and forged signatures used to obtain the loans.
 Fourth, risk managers at Westpac failed to identify and monitor potential risks, such as fraud. They did not take appropriate action
to reduce the risk of fraud and did not provide timely reports to senior management and the board.
 Finally, the Reserve Bank of Fiji failed to adequately monitor the activities of Westpac. They did not take sufficient action to
investigate and prosecute instances of fraud.
  Conclusion and Recommendation
 This report has provided an in-depth discussion of the failures of the different
RULES / LAWS
stakeholders in the case of Bill Papas and ISSUES Forum Finance. It has highlighted the need for
improved oversight and regulation of Research financial institutions.
Methodology
Question
 In order to prevent similar occurrences in the future, the Reserve Bank of Fiji should take
steps to improve its monitoring of financial institutions. This should include
Analysis &
increased scrutiny of financial Findings
Conclusion
transactions and the implementation of stronger
risk management policies. APPLICATION CONCLUSION

 The shareholders of financial institutions should also take steps to ensure that their
investments are secure. They should monitor the activities of senior management and the board, and ensure that the financial
institution is compliant with relevant legislation and regulations.
 Senior management should establish and maintain effective systems of internal control. They should monitor the activities of the
institution and ensure that appropriate risk management policies are in place.
 Auditors should conduct sufficient due diligence on financial transactions. They should be alert to the possibility of fraud and take
appropriate action to detect and prevent it.
 Risk managers should identify and monitor potential risks, such as fraud. They should implement strategies to reduce the risk of
fraud and provide timely reports to senior management and the board.
 In conclusion, this report has highlighted the need for improved oversight and regulation of financial institutions. The Reserve Bank
of Fiji and other stakeholders should take steps to improve their monitoring of financial institutions and ensure that appropriate risk
management policies are in place.

Case 1
Case 2