Australian liquidator John Sheahan has launched new legal action in Israel against members of the Binetter family which if successful would lift the total he has realised from tax fraud claims to nearly a quarter of a billion dollars.
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AFR Senior Writer: Neil Chenowith – posted the following article on the AFR website, on 29 July 2021.
In two new lawsuits filed on July 11, Mr Sheahan’s lawyers allege that Binetter family members flew out of Australia on January 3, 2013 hours after transferring $22.6 million from Sydney to a bank account in Liechtenstein.
It’s alleged another $4.4 million was later moved to Liechtenstein, taking the total to $27 million which Mr Sheahan is seeking to have returned.
Last January, Mr Sheahan of South Australian firm Sheahan Lock Partners settled with Israel Discount Bank and its subsidiary, Mercantile Discount Bank, for $137 million, for their role in enabling a series of back-to-back loans which enabled two brothers, Emil and Erwin Binetter (both now deceased), to claim millions of dollars of interest payments dressed up to look like arms-length bank loans as Australian tax deductions.
Altogether, Mr Sheahan has realised $210 million in tax payments, penalties and interest after replacing the liquidators that the Binetters had appointed to a string of $2 companies with huge tax bills, when they left Australia.
Mr Sheahan, who is liquidator to the trustee company for Emil and Gerda Binetter’s super fund as well as trustee in bankruptcy to Emil’s estate, is laying claim to a luxury apartment building in one of Tel Aviv’s most prestigious streets, Rothschild Boulevarde, worth more than $25 million, which the Binetters bought in 2013 with the funds transferred to Liechtenstein.
A 15-year saga
Mr Sheahan is also claiming $5 million from Gerda which his lawsuit claims was improperly directed to Liechtenstein.
The pursuit of the Binetters is a 15-year saga that began in July 2006 when the Tax Office began auditing companies set up by Emil and Erwin Binetter, who had built a property group as well as co-founding the Nudie Juice business.
A series of legal challenges to tax assessments issued in 2009 and 2010 took more than a decade to resolve.
Emil’s son, Gary, has testified that in 2009 an Israeli bank officer told him his father was “very stressed” and that if they failed to prove that loans taken from the bank were real loans – “they will put us in jail “.
Gary said he flew to Europe with his parents and his sisters, Debbie and Lisa, after an Australian lawyer told him that “the Tax Office will always have the advantage while we’re in the jurisdiction” and so the family decided to leave the country.
Mr Sheahan formally questioned Gerda and Gary as well as Debbie and Lisa last year during the COVID-19 pandemic and again early this year, after winning court approval to act as a liquidator in Israel.
The family say that they knew nothing of business matters and that all arrangements were made by Emil Binetter, who died in 2014.
Mr Sheahan’s lawyers argue that as a consequence, while the assets were not held in Emil’s name, he controlled and effectively owned the assets, which therefore belong to his estate.
The earlier cases have made waves in Israel, with the Inspector General of Banking appointing a retired judge, Hila Gerstel, to review IDB and MDB’s conduct in light of the revelations in the Binetter litigation.
Mr Sheahan told The Australian Financial Review he believed the $210 million raised to date in the Binetter case was “just the tip of the iceberg” of wealthy Australian taxpayers using similar structures to avoid tax.
“There’s no statute of limitations on this because it’s fraud,” he said.