Big Shot Aussie Racehorse Owner Pleads Guilty to Bilking Investors for Millions in Alleged Betting Syndicate Scam
Posted on: September 30, 2019, 04:17h.
Last updated on: September 30, 2019, 04:38h.
A once-prominent Australian racehorse owner pleaded guilty Monday in a Melbourne court to orchestrating a A$17.5 million ($11.8 million USD) betting fraud that allegedly saw him fleece hundreds of investors in a bogus wagering syndicate over a five-year period.
Bill Vlahos — who admitted two counts of obtaining financial advantage by deception Monday — was the chairman of racehorse-owning syndicate BC3 Thoroughbreds. Through BC3, Vlahos caught the attention of the racing world by splashing big cash on several yearlings, including two siblings of the undefeated thoroughbred Black Caviar, one for A$5 million.
But prosecutors allege the money was being funnelled from his touting syndicate, The Edge club, which was little more than a Ponzi scheme, robbing Peter to pay Paul.
According to court documents, more than 1,000 people invested in The Edge, lured by the flashy and apparently successful racehorse owner who claimed to have a system that guaranteed a yearly 25 percent return on investment.
The Edge’s promotional literature claimed Vlahos’s system had been devised through “mathematical training gained during a psychology degree” and developed “during a two-year stint living near Randwick racecourse when he was not working full-time.”
Court filings showed the 54-year-old father of two would send out a results sheet after the races had run detailing the “winners.” But in reality, he had either wagered far less on the race than he claimed, or he had not any placed bets at all.
In May 2008, for example, he told investors he had staked $219,000 on a horse called Gorky Park at Flemington, winning $657,000. But in fact, he had bet $2,500 for a return of just $9,000.
Investors were encouraged not to cash out because Vlahos said the system needed as much pooled liquidity as possible to generate returns.
But the betting syndicate came crashing down around him in 2013 when panicked investors eventually came knocking for their money.
Tip of the Iceberg?
The millions he is on trial for allegedly stealing may be just the tip of the iceberg. Vlahos was initially facing 374 charges, but after weeks of negotiations between his lawyers and prosecutors, he accepted a plea deal which saw the initial amount slashed from A$120 million ($81 million) to A$17.5 million.
As well as splurging on racehorses, Vlahos and his wife spent the money on a vacation home, luxury cars, designer clothes, and school fees in Singapore, according to court filings.
In an email from Vlahos to his wife, included as evidence, the former racing luminary makes a plea for her innocence.
“You are a beautiful person that deserves none of this,” he wrote. “You trusted me implicitly. I am responsible for everything that has happened. Me and only me.”
Vlahos was released on bail after his lawyer argued that he has no money and is therefore no longer a flight risk. He is due back in court in February.
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