“Could you explain the reason for not even a dollar extra over the minimum amount payable off the sale loan amount.”Pattenden expressed frustration that the company was struggling to stay solvent, apparently worried about its ability to pay his companies what was owed.
The consortium made 15 “repayments” to Pattenden, but stopped abruptly after claiming that Youpla had overpaid Crown, Pattenden’s other company, in a separate transaction for insurance premiums. Pattenden rejected the idea Crown owed Youpla money as “someone’s wrong theory” and suggested Youpla instead pay Crown from a “$300,000 slush fund” it held. This fund was held as a buffer to allow the company to pay out quickly to Aboriginal families for funeral expenses.
Pattenden couldn’t find another insurer to take on ACBF, so in 2002 he set up his own – Crown – based in Vanuatu, where insurance companies needed only $200,000 in capital, compared with the $5m required in Australia. Pattenden then sold his shares in Just Solutions to a new Vanuatu company he also controlled, Bu Teck.The purchase price was $29.8m, but Pattenden didn’t receive any money on the day. Instead, the amount was treated as a loan from Pattenden to Bu Teck. The effect was to transform the streams of dividends from ACBF and the profits from Crown’s insurance premiums into repayments of a loan, rendering them free from tax.
Given his previous dealings with the ATO, Pattenden was aware that any suggestion Crown was telling ACBF what to do could be a problem. He also received advice in 2013 that Crown “cannot be operating a business in Australia” without risking tax and warning him against sending an associate to meet ACBF in Australia, with instructions from Crown.
Another one for the ICAC