Former WA minister Gordon Hill defrauded Firepower investors of $3.4m


Former WA minister Gordon Hill defrauded Firepower investors of $3.4m, court finds

10.32pm 21/04/16

A former West Australian police minister defrauded about 80 investors of $3.4 million, which was meant to be spent on shares in the failed fuel technology company Firepower, the WA Supreme Court has found.

Gordon Leslie Hill, 65, a former Firepower director and minister in the Burke, Dowding and Lawrence State Labor governments, was ordered by Justice Andrew Beech earlier this month to repay the group of investors.

The civil action against Hill, 65, is the group’s first small victory in their long-running bid to recoup the money they paid for shares which they never received.

They are among many investors who lost money in the company, which claimed to have developed a magic petrol pill that improved fuel economy and reduced emissions from motor vehicles.

Firepower collapsed in 2007, taking $100 million in investors’ money.

The group of investors made deposits ranging from $2,000 to $200,000 between December 2004 and June 2005 into a trust used by Hill, who was then working as a solicitor, to buy shares in a Firepower company registered in the Cayman Islands.

But they never received their shares because Hill transferred their funds into companies that benefited himself as well as Firepower boss Tim Johnston, who had requested the money.

This included payments to companies called Green Triton, incorporated in the British Virgin Islands, and Operations Firepower, which was registered in WA.

Hill ‘recklessly indifferent to obligations’: judge

Justice Beech said an email from Hill to Mr Johnston showed that he “was acutely conscious” he was not supposed to use the money in the trust, and “deliberately turned a blind eye to the obligations that he knew he had as a trustee”.

“It is a real problem for me sending funds from the Trust account in this way … Legally the money is not meant to be used until the shares are issued,” the March 2005 email said.

Hill denied he acted fraudulently, with his lawyer arguing he intended for investors to receive shares in a different Firepower company, registered in the British Virgin Islands.

But Justice Beech disagreed, saying “at best Hill was recklessly indifferent to his obligations”.

“He consciously put those obligations to one side when complying with Mr Johnston’s instructions and making the Trust Payments, thereby benefiting some or all of Green Triton, Operations Firepower, Mr Johnston and himself,” Justice Beech said.

The legal bid by the investors’ group first started two years after the company collapsed, but was interrupted by other legal battles as well as Hill going into bankruptcy between 2010 and 2013.

Investors seek to recoup money

The group’s lawyer, Stephen Penrose, said the next step would involve a means inquiry to determine how Hill would pay the investors.

If he cannot pay, they will look to recoup money from the Legal Contribution Trust, a fund established to compensate clients of solicitors who misappropriate trust funds.

Mr Penrose said the investors – as well as another group owed $1 million by Mr Hill but who were not part of the Supreme Court action – needed Hill to be found to have acted fraudulently to apply to the fund.

But he was not confident they would receive the full amount of money they were owed, including interest.

While some of the investors were wealthy, many were just average people.

“They are just normal people, mums and dads. That’s the shame – they were normal people who put in money,” he said.

Hill’s lawyer has been contacted for comment.

Topics: courts-and-trials, fraud-and-corporate-crime, perth-6000, wa, cayman-islands, virgin-islands-british


 Firepower founder will not face charges over company collapse

Updated 26 Sep 2014, 4:52pm

The corporate regulator has announced there will be no further penalties against executives from the collapsed fuel additives business Firepower.

It is six years since Firepower collapsed, leaving investors who had poured $100 million into the company with nothing to show for it.

The business had spent liberally on sporting sponsorships and celebrity connections to promote its fuel additives, which were subsequently discredited.

The Australian Securities and Investments Commission (ASIC) was successful three years ago in banning Firepower chairman Tim Johnston from managing another company for 20 years, while another executive was banned for six years.

The regulator says it has now finalised its investigation into possible criminal charges.

ASIC says the Commonwealth Director of Public Prosecutions has reviewed its brief of evidence and decided there is not a reasonable prospect of securing a conviction against Mr Johnston or anyone else linked to the company.


Lack of money ends Firepower investigation

Updated 21 May 2012, 9:48am

Firepower’s liquidator believes the former head of the fuel technology company, Tim Johnston, could have stashed millions of dollars offshore.

The liquidator Bryan Hughes has also confirmed that an investigation into the collapsed company is closed because investigators can no longer afford to bankroll it.

He says creditors are unwilling to put more money into it.

Firepower collapsed in 2008 with debts of at least $100 million owed to more than 1200 investors.

Mr Johnston was declared bankrupt last year.

Mr Hughes says trying to find out exactly where the money is, is not worth the cost of continuing.

“I believe there is some money offshore, we can prove it in a commercial sense,” he said.

“It’s very difficult to prove it to the requirements required by law to substantiate it but the trouble is we can track it so far.”

Worrell is the forensic accountancy firm that was doing the investigating but Mr Hughes says they cannot continue doing so any longer.

“They have no further funds,” he Mr said.

“They’ve approached all creditors, including myself, as to whether we have any funds to contribute to their investigations into his [Mr Johnston’s] bankruptcy and his personal estate.

“We don’t and obviously other creditors are disinclined to contribute funds.”

Mr Hughes says this effectively ends the chances of private investors recouping money from Mr Johnston.

“It’s in third parties, it’s in offshore jurisdictions, it’s in other companies,” he said.

“And, until somebody can find exactly where it all is and how that sheets home to Mr Johnston, it wouldn’t be worth the cost of doing it.”

Mr Hughes says the difficulty of investigating the collapsed company highlights flaws in Australia’s business framework


ASIC bans Firepower boss for 20 years

Updated 21 Jul 2011, 5:10pm

The Federal Court in Perth has banned the founder of the discredited fuel pill technology company Firepower from managing companies for 20 years.

The Australian Securities and Investments Commission (ASIC) brought action against former Firepower chairman Tim Johnston after the company collapsed in 2008, leaving investors more than $100 million out of pocket.

Justice John Gilmour said Mr Johnston should be excluded for a very long period of time from having access to or control over shareholders’ investments.

He said it was the kind of conduct which diminishes investor and public confidence in the commercial markets.

Mr Johnston’s investment manager Quentin Ward has been banned from managing a company for six years.

Mr Johnston did not turn up in court today to hear the decision


 

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Robbo

I also love family, Photography, Cooking a great BBQ , Computers, Reading Crime Books, and solving crimes before the end of the show !

One thought on “Former WA minister Gordon Hill defrauded Firepower investors of $3.4m”

  1. Mr Johnstone is another spineless, prick with no consience theres plenty around, it would be impossible for the moron to repay that debt anyway hes supposedly bankrupt. So the alternative would be the legal con trust fund good luck with that. He should be thrown in the slammer indefinately. Morons like him end up getting their just deserts in the end off a cliff with a lump of cement for a faster exit. Arseholes like him really shit me. Smug bastard.

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