Paul Toohey, Journalist
Herald Sun
14th December, 2014
“WITH a weary tone, Melbourne lawyer Michael Webb says there’s no point asking his client, Geoffrey Edelsten, about the settlement deal that he’s struck with his business adversaries in the US, because Mr Edelsten probably does not understand it himself.”
““He’s not a lawyer,” says Webb.”
1. The information provided here by Paul Toohey is used to embellish the article.
“But this is Mr Edelsten, who created a 24-hour glam medical superclinic empire, flew to games in a chopper when he owned the Sydney Swans, was struck-off as a doctor for over-billing, jailed for hiring a hitman to attack a client, bankrupted, started again and sold out of his Allied superclinics in Victoria for $28m in 2011.”
“flew to games in a chopper when he owned the Sydney Swans”
2. This only occurred in one instance, the information provided here by Paul Toohey is used to embellish.
“was struck-off as a doctor for over-billing”
3.The information provided here by Paul Toohey is used to embellish the article.
+ Please see: A Bizarre Incident – Standover Merchants
+ Please also see: The Sydney Morning Herald Tuesday 15 March 1988
“jailed for hiring a hitman to attack a client“
4. The information provided here by Paul Toohey of the Herald Sun is used to embellish the article and is false.
+ Evidence is provided in the following articles:
“He’s now bankrupt, again, here and in the US, where he’s been accused of playing complex “shell games” with his companies in order to hide assets. He does understand the deals that got him into trouble in America in the first place, right?”
““Oh, come on,” says Webb.”
“The idea seems to be that Edelsten is a hapless chap who stumbled into a series of dismal arrangements that began in Las Vegas in 2011, with then-wife Brynne on his arm, and ended with him burning through $27m before declaring himself bankrupt at the start of this year.”
“There is something persuasive to the notion that Edelsten is mug.”
“The mess he created with his headlong plunge into a series of calamitous deals, buying into distressed properties at the height of America’s post-subprime mortgage crisis, when huge ghetto estates were going cheap, could be characterised as greedy, but in no way smart.”
5. The information provided here by Paul Toohey is used to embellish the article. No evidence of the figures above are provided .
““Squandered” is the term Edelsten used to describe his actions in a US bankruptcy hearing this year. “Splurged.””
6. The information provided here by Paul Toohey is used to embellish the article. Please provide evidence of the use of the terms ‘squandered’ and ‘splurged’.
“That must be viewed alongside the excoriating comments of American and Australian judges, who have variously characterised Edelsten as an evasive, shifty man who plays cunning shell games with his companies and trusts.”
7. The information provided here by Paul Toohey is used to embellish the article.
“The issue is not Edelsten’s credibility, which is shot. It is about how he, at 71, maintains a high-octane lifestyle while creditors knock at his door; and how he baffles experienced forensic investigators with his reliably flawed memory.”
“It has to be said that Edelsten has tried his best to live an extraordinary life. That is no crime.”
8. The information provided here by Paul Toohey is used to embellish the article.
“He has made a willing spectacle of himself, but now looks to be scurrying in the opposite direction of old age and the grave, relying on the counter-intuition that god or the devil will fail to notice the shiniest parrot in the tree.”
9. The information provided here by Paul Toohey is used to embellish the article.
“In spectacular satin suits, attached at shoulder-height to Amazon women with high-viz breasts, Edelsten has made a shell game of his life, leaving others to guess what parts of it are real.”
10. The information provided here by Paul Toohey is used to embellish the article.
“But over in Florida, and here in the Australia, his 30-plus creditors have seen the $50,000 pear-shaped diamond engagement ring he’s given his latest love, Gabi Grecko. They want to know how he paid for it.”
11. The information provided here by Paul Toohey is used to embellish the article and is false. Please provide your evidence of these figures.
“Grecko, 25, is said to be a New York reality TV star, model, DJ and “vamp” — job descriptions that these days are just as often code for “underemployed”. She first publicly appeared at Edelsten’s side at AFL legend Tom Hafey’s funeral this year, up-ending the solemnity with a bursting cleavage.”
12. The information provided here by Paul Toohey is used to embellish the article.
“An attractive and intriguing woman who speaks with just a hint of a Jamaican accent (“Man’attan”), Grecko later apologised — and seemed genuine enough — for any offence, saying she did not appreciate Hafey’s significance.”
13. The information provided here by Paul Toohey is used to embellish the article.
“Perhaps Edelsten did not brief her. As always, his appearance was more important than the event itself. As it was when Edelsten fell to his knees and proposed to Grecko at the Melbourne Cup, making sure the cameras recorded the event: nothing done in private ever as binding as a public consummation.”
14. The information provided here by Paul Toohey is used to embellish the article.
“Edelsten claims he has no income yet, by his own account, burns through around $46,600 a month — plus the $3000 a week he must pay ex-wife, Brynne, until their family law case is settled.”
15. The information provided here by Paul Toohey is used to embellish the article and is a false. Please provide evidence of the figures stated above.
“A US trustee from Florida had been appointed to liquidate his US and Australian assets, and to uncover the extent of any holdings he had left in Australia.”
16. The information provided here by Paul Toohey is used to embellish the article.
“The Australian Tax Office has emerged claiming against Edelsten owes it $14,130,000 in outstanding taxes and penalties. It will be lucky to recoup 3c on every dollar.”
17. The information provided here by Paul Toohey is used to embellish the article and is false. Please provide your evidence of these figures.
“Most people would dive for the nearest bush, but not Edelsten. He was seen, post-engagement, posing for holiday snaps with Grecko, at Venice Beach, after flying first-class to LA. Grecko gave the camera two middle fingers while he clamped a hand on her left breast, looking like a horrible two-year-old.”
18. The information provided here by Paul Toohey is used to embellish the article and is false. Please provide evidence of the claims above.
“How does he get his money? According to Edelsten, it’s from loans taken out from friends, including $1.6m from his 91-year-old mum, Esther.”
19. The information provided here by Paul Toohey is used to embellish the article. Please provide evidence of the figures stated above.
“However, when you file for bankruptcy in the US, you need permission from the court to borrow money. Edelsten, in a repeating pattern of ignoring court orders, received no permission.”
20. The information provided here by Paul Toohey is used to embellish the article.
“You have to hand it to Edelsten. He doesn’t care what people think. Then again, obviously he cares a great deal. It’s as though wants people to believe he’s getting just a bit more, of everything, than everyone else.”
21. The information provided here by Paul Toohey is used to embellish the article.
“But this time, he’s out of luck. Edelsten’s recent claims to A Current Affair that he would be left with a “comfortable” $18m in the wash-up of the bankruptcy proceedings are delusional.
He’s living on borrowed money he’s not allowed to have. His American adventure has cost him everything.”
22. The information provided here by Paul Toohey is used to embellish the article.
“Edelsten and Brynne discovered the House of Nurielle boutique in Las Vegas, owned by Miami-based couple Rafael “Alfie” Mawardi and wife Limor, in 2009.”
“Mawardi was a former shoemaker (“New York’s biggest”) and Limor designed one-off dresses and suits.”
“Their target audience was celebrities and the partying rich. By 2011, Edelsten, having millions from the sale of Allied, was back in Vegas and the store, forking out tens of thousands on clothes for Brynne and himself.”
23. The information provided here by Paul Toohey is used to embellish the article.
“The men and their wives hit it off. Secretly, the Mawardi’s business was in trouble and they were delighted to find Edelsten, who casually mentioned he had $100m at his disposal, anxious to give his underappreciated wife a life-changing distraction.”
24. The information provided here by Paul Toohey is used to embellish the article.
“The House of Nurielle would be the perfect fit for Brynne, a cocktail waitress Edelsten said he’d met outside a club on Sunset Boulevard. She would become the body and the face of the fashion brand.”
25. The information provided here by Paul Toohey is used to embellish the article.
“Together, with the Mawardis, they would open stores in Dubai, Abu Dhabi, Miami, Singapore, Moscow, Sydney, Melbourne and Hong Kong.”
26. The information provided here by Paul Toohey is used to embellish the article.
“In July 2011, they signed a joint venture agreement, Edelsten paying $3.2m for half the Mawardi’s fashion company. Stylists were sent in and Brynne modelled in $7000 dresses that were as revealing as a WAG’s post-Brownlow nightie.”
27. The information provided here by Paul Toohey is used to embellish the article.
“The photos are still there on the Nurielle website, not updated since 2012, when the venture fell in a heap. They’re almost sad. Brynne is beaming as she sees her dreams falling into place.”
28. The information provided here by Paul Toohey is used to embellish the article.
“In 2011, America’s post-bankruptcy wreckage presented opportunity for the clever and pitfalls for the reckless. Edelsten sent Alfie Mawardi scoping for properties and he came back with two: a huge 670-apartment housing estate in Dayton, Ohio, and another 450-apartment complex in Memphis, Tennessee.”
“Most buyers would have looked twice: the Memphis estate was in bad area with poor tenants. The sprawling Ohio property had been bankrupted before. Both properties needed lots of work.”
“And then there was the Casino Playa Chiquita on the half-island Dominican Republic, for which Edelsten said he paid $4.4m. He bought it on Mawardi’s recommendation without bothering to look.”
“The resort was located in Sosua, away from the tourist strip, the tiny casino only attracting small-rolling locals. Sosua was once a sedate little paradise that had, since 2010 when thousands of desperados fled Haiti following the earthquake, become a crime-riddled hellhole.”
“A simple net search would have showed Edelsten the red flags on this town, ample warnings about the area’s emphasis on robbing and murdering foreigners after luring them into dodgy property deals.”
“The casino still operates but the license is not legit; it was issued contingent upon improvements being made to uninhabitable seven-room hotel. Yet, somehow, in the corrupt republic, it continues its modest trade.”
“So far, this lot set Edelsten back around $12m.”
29. The information provided here by Paul Toohey is used to embellish the article and no evidence is provided by Toohey of figures stated above.
“And there was the Bombadier Challenger 601 jet, which Edelsten paid more than $4m and spent hundreds of thousands decking out. It would fly high-rollers to the casino and wealthy customers to Nurielle’s far-flung boutiques.”
30. The information provided here by Paul Toohey is used to embellish the article. Please provide evidence of these figures.
“Edelsten had offered Mawardi a good deal: he’d get an equal share in the title to all the properties (a third, smaller investor, David Levy, was to take out a 14 per cent share, but he never coughed up the cash).”
“Mawardi would share with Edelsten half-ownership in his Florida bar and nightclub, plus several other small — and troubled — properties.”
“Importantly, the Mawardis were expected to manage the housing estates and the casino. But they were clothes and shoemakers. They had no experience running and repairing an extensive property portfolio.”
“Arsonists hit the Tennessee apartments. Edelsten went for a $10m insurance claim over a property for which he’d paid $1.7m, but immediately ran into problems when the insurer complained about irregularities in the policy application, leading to one of many drawn-out legal battles to come.”
“Parts of the Ohio apartments were declared unfit for habitation; taxes and insurance went unpaid.”
31. The information provided here by Paul Toohey is used to embellish the article and no evidence of such is provided.
“Edelsten had become an American slumlord. The Mawardis said he’d always assured them finance was no issue, that he was the “money man”. But now he saw that rehabilitating the properties would cost a fortune.”
32. The information provided here by Paul Toohey is used to embellish the article.
“Edelsten panicked. And with reason. In the 80s, when he ran the Sydney superclinics, everything was leased — the fast pink cars, the chopper, even the waiting-room grand pianos. He never owned anything; when he was bankrupted, there were few assets to liquidate.”
“This time, uncharacteristically, he’d spent his own money.”
33. The information provided here by Paul Toohey is used to embellish the article.
“He told Mawardi he was temporarily cash-strapped and urgently needed him to provide some quick cash for the operations, promising to pay him back once he’d shifted some cash in his trust around.”
“Mawardi felt Edelsten was squeezing him but could not afford to put Edelsten off-side.
Mawardi was introduced to Liron Ben-Shimon, described by Mawardi in later testimony as a “collector”, who is “very connected to the Israeli mafia”.”
“An arrangement took place with the blessing of a witness rabbi, Mawardi to receive more than $300,000 in “brown paper bags”. He believed that Edelsten would step in and repay Ben-Shimon later. Edelsten never did.”
34. The information provided here by Paul Toohey is used to embellish the article.
“Instead, Edelsten went behind Mawardi’s back and removed his name from the title to several joint-venture properties, claiming sole ownership.”
35. The information provided here by Paul Toohey is used to embellish the article.
“He also flogged the plane for a quarter of its worth. “I paid for everything,” Edelsten would later explain at a US hearing. “I want either my money back or the properties.””
36. The information provided here by Paul Toohey is used to embellish the article.
“It was true he paid for most things. It also true that he signed a contract promising to do so; and didn’t keep his end of the bargain in providing the money to fork out the cash to rebuild and maintain the dire properties.”
“Edelsten flew to the US with his lawyers in September 2012 to meet Mawardi. Each accused the other of fraud.”
“The meeting ended — according to Edelsten — with Mawardi attempting to blackmail him, claiming he had an “embarrassing video” featuring Brynne that he would release to the Australian press unless Edelsten gave him $1.5m (the alleged video never materialised).”
“Edelsten claimed Mawardi had “solicited” him to invest in numerous properties; had provided false books showing the fashion house was making $2m a year when it was in loss; and later learned the casino was worth only around $1m.”
“The Marwadis countersued that Edelsten had not backed the joint venture with cash, had removed their names from title to the properties, and executed mortgages over them without their consent.”
37. The information provided here by Paul Toohey is used to embellish the article. No evidence is provided of the above.
“By late last year, after hundreds of court filings and hearings involving many teams of lawyers, the general disposition was that Edelsten had deprived the Mawardis of their interests by reneging on the deal.”
“In June 2013, a Florida court appointed a receiver and ordered Edelsten make no further property title transfers. Four months later, Edelsten executed a mortgage on the Ohio property without the court’s consent.”
“The mortgage was, according to US Bankruptcy Court judge Lawrence Walter, granted to an Australian company, Highgate Road, wholly owned by Lindsay Hosking, Edelsten’s longstanding accountant.”
“Highgate then sought to foreclose its mortgage. Edelsten said it had nothing to do with him.
Judge Walter disagreed: “Although Edelsten testified that the foreclosure filing was a surprise to him, it is not credible that his trusted corporate accountant would take such an action without the complicity of Edelsten.””
“Likewise, Edelsten granted a $2 million mortgage over the Tennessee apartments to Australian business associate, Alan Kwan, for which Kwan gave Edelsten nothing in return.”
“This is what the judge called Edelsten’s “opportunistic manipulation of facts and circumstances — a sort of multifaceted shell game — to achieve some advantage for Edelsten and corresponding disadvantage for his opponents”.”
38. Please provide evidence of the above.
“In Australia, the police would be sent in. But the US legal system is forgiving, always looking favourably towards mediated outcomes — perhaps because the US legal system is itself close to bankruptcy.”
39. The information provided here by Paul Toohey is used to embellish the article.
“In September 2013, the parties agreed to settle, with Edelsten essentially agreeing to pay the Mawardis a half share of the disputed assets.”
“It went wrong immediately after Edelsten violated court orders by again transferring titles. He was due to face a criminal contempt hearing on January 10, 2014. The day before he was due in court, he filed for bankruptcy in the US.”
40. The information provided here by Paul Toohey is used to embellish the article.
“And the day prior to that, Edelsten’s Melbourne law firm filed a caveat over his personal luxury three-apartment residence in Melbourne, in favour of his mother, Esther.”
“The reason given was to protect a loan she had given him to fight his court battles; others wondered if he was using his mum to protect his Australian assets.”
41. The information provided here by Paul Toohey is used to embellish the article.
“Most of Edelsten’s money resided in the Norman South Trust, in Australia, described in US proceedings as a sham designed to avoid paying tax. It held profits from the sale of the medical business and Edelsten was the sole beneficiary.”
42. The information provided here by Paul Toohey is used to embellish the article. Please provide evidence of the above.
“Prior to filing for bankruptcy, Edelsten vested control of his Norman Smith trust to “two of his insiders”, being his lawyer and accountant.”
“This was described as a way to hide his assets from the bankruptcy proceedings, but Edelsten’s lawyers argued he had no control over the trust.”
“The judge disagreed: “Well, that assumes, of course, that Mr (Lindsay) Hosking and Mr (Michael) Webb, who are Mr Edelsten’s lawyer and accountant, respectively, will act completely independently of Mr Edelsten, a proposition that is interesting, but not exactly persuasive.””
“The Mawardi’s lawyer, Robert Stok, slammed Edelsten for concealing assets using a “byzantine web of obfuscation”.”
43. The information provided here by Paul Toohey is used to embellish the article.
“The judge agreed: “His practice is to hold assets in discrete limited liability companies and trusts, most of which he controls personally or through surrogates such as his mother, lawyer, accountant, or business associates.””
“Then Alfie Mawardi got stabbed. He was outside his Florida office, about 9am, when a man ran from the bushes holding a knife. Mawardi alleged his attacker was the brother of Ben-Shimon, punishing him for his unpaid debt.”
“Mawardi accused Edelsten of conspiring with Ben-Shimon in the attack that left him in the emergency ward, needing 60 stitches. And he pointed out that Edelsten had form in Australia for hiring hit men.”
44. The information provided here by Paul Toohey is used to embellish the article.
“He claimed Edelsten had threatened to “silence” him once before if he revealed to Brynne that he’d had a fling, in Miami, with Stacy da Silva, whom he’d met on a “sugar daddy” website he frequented.”
45. The information provided here by Paul Toohey is used to embellish the article. Please provide your evidence.
“Ben-Shimon and Edelsten angrily denied the accusations. No one has yet been charged over the stabbing.”
“Mawardi has been left in a state of hysteria from his dealings with Edelsten. When I spoke to him in 2012, he was at the point of breakdown. He hasn’t improved.”
46. The information provided here by Paul Toohey is used to embellish the article.
“His lawyer, Robert Stok, has told him to “shut up” in deposition hearings and threatened to walk out if he failed to answer the questions asked of him, rather than ranting incoherently about all he says Edelsten has done to him.”
47. The information provided here by Paul Toohey is used to embellish the article.
“Unravelling Edelsten’s true financial position has proven difficult. He is deliberately vague and his lawyer Michael Webb seems genuinely not to know, having relied on the accounting statements of Lindsay Hosking.”
“Hosking has been unavailable to assist investigators, having in quick order had a heart attack, a stroke and then being diagnosed with cancer.”
“In late October, just after the ATO entered the scene saying Edelsten owed it $14.1m, the Mawardis, Edelsten, his trust, Ben-Shimon and the US Trustee reached a court-approved settlement. As part of the settlement, no party is permitted to disparage the other and all related legal actions must cease.”
48. Please provide evidence of the figure stated above.
“The settlement requires Edelsten to pay the US Trustee $1.25m from the sale of his Palazzo Versace condo in Queensland and his Quay West apartment in the Rocks, Sydney. He will also keep more than 50 per cent of any assets held by his trust.”
“That might sound favourable, but it contains the implicit belief by the US parties that Edelsten — once he pays the $1.25m — will have nothing left.”
“Several Australian properties (including a small house and a contaminated industrial estate) that Edelsten has been permitted to “keep” are effectively owned by the National Australia Bank, which will foreclose on them.”
“The Tennessee property was earlier sold and the proceeds split between the Mawardis and Edelsten, money that has no doubt since been spent on lawyers; the Ohio property was also sold and the $1m remaining is held by the Ohio bankruptcy court.”
“The money from the sale of the plane will be split; and the casino — currently uninsured because no one’s paying the premiums — will be sold as a matter of urgency and split three ways. Ben-Shimon will get a third.”
“But they’ve tried to flog it before. No one’s interested. It’s worth as much as a dodgy badlands cantina in a gangland Mexican city.”
49. The information provided here by Paul Toohey is used to embellish the article.
“Edelsten’s three conjoined Melbourne luxury apartments (where he lived until early this year with Brynne) will be valued and it is agreed Edelsten can buy them and pay the trustee at 80 per cent of their value — if he can raise the money, which he can’t.”
“Brynne also claims rights to them; so he’d have to pay her off if he wants to own them again.”
“There’s also his supposed Indonesian coal and sand interests, which Edelsten has valued at $10m, but no one — including his lawyer — knows if they’re real. These will be investigated and sold off, if possible.”
“With unsecured claims against him of at least $30m, including the money the Australian Tax Office is owed, Edelsten is finished.”
50. The information provided here by Paul Toohey is used to embellish the article.
“The ATO appeared in the US bankruptcy court this week, arguing the court failed to take into account that it is Edelsten’s largest creditor when the settlement was agreed.”
“Another mediation hearing has been ordered to take place within 60 days to see whether if the ATO can be cut into the deal. But it will first have to fight those who reached the hard-fought settlement — and they will not give up easily.”
“This is the ATO’s own fault. It failed to move on Edelsten’s taxes after he sold out of Allied; and failed to make itself a party to the US bankruptcy proceedings, though it
was well aware of them.”
“It has already dropped its demand down to $9m, but by the estimate of Robert Stok, it would be “optimistic” for them to walk away with anything more than $500,000.”
51. The information provided here by Paul Toohey is used to embellish the article.
“This is the world Gabi Grecko has entered, where nothing is quite as it seems and where even Edelsten himself may no longer sure what parts of it are real.”