WENDY Stuart-Merrion has lost her job, her business, her friends, her husband and her life savings.
She has spent the past few years trying to figure out how her trusted accountant and business partner – a man she respected like a father – could take so much from her.
Ray Walker appeared to have it all. A successful accountant who boasted of being a self-made man who built everything he had from the ground up.
He was confident, intelligent, had social pedigree and he cultivated the respect of important people. And he had money. Lots of it.
It was mid-1993, Mrs Stuart-Merrion and her third-generation baker husband Jeff, of Cardiff's Merrion’s Bakery family, arrived to open their Merewether Heights bakery only to discover their world had been turned upside down. The Scenic Drive premises they operated from was being sold and they had a month to get out. Enter Walker.
He had been the couple's accountant for years, introduced to them by a bread vendor who knew Walker from Cooranbong’s Seventh Day Adventist Church community where he grew up after emigrating from England as a boy.
Despite flaunting his flashy lifestyle, Walker sold himself to clients as a down-to-earth success story, whose door was always open. So when the Merrions found themselves in trouble, they rang Walker.
“I immediately called Ray and told him what was happening,” Mrs Stuart-Merrion said. “He used to come up and visit us at the bakery on the weekends. We had people lined out the door, we were really flying high until we found out the shop was being sold. Ray said to leave it with him and the next day he rang us with what he described as a proposition.”
Walker convinced them it was his business acumen that saw him go from starting out in a garage to running a successful firm that he boasted allowed him to pay $970,000 cash for one of the many property acquisitions he made in the 1990s, this one in Fenton Ave, Bar Beach.
Mr Merrion, who learnt his trade working from the age of 12 in the family bakery that was a well-known Hunter institution, was convinced.
They agreed to a partnership, borrowed $180,000 – secured by one of Walker's properties – found a shop in The Junction Shopping Village and changed the name to Krusty's Bakery.
“The deal was Ray and I would be in partnership on the proviso that Ray's daughters Kate and Sarah could work at the bakery on weekends," Mrs Stuart-Merrion said. “Ray wanted $250 in cash each week, he would look after the books and he used to close the shop up on Saturday afternoon to give us a bit of a break.”
What they didn't know was Walker's picture of respectability and decency was a facade, beneath which lurked a life involving embezzlement, lies, dodgy deals and that no one profited except for Walker. For seven years the Merrions worked long hours, seven days a week and the bakery thrived. It grew from nothing to employing six staff and turning over $14,000 a week.
“We were not just trying to prove to ourselves we could make it work, we didn't want to let Ray down,” Mrs Stuart-Merrion said. “We just took our wages and that was it. We paid the loan off in four years and we thought we were building something for our future.”
Every month, Walker would go over the books kept by Mrs Stuart-Merrion and get her to pay bills at the post office.
“I looked at Ray like a second father,” she said. “We had the utmost respect for him. We didn't do anything without consulting Ray, we never questioned him, we trusted him implicitly.”
It did not emerge until this year, when Mrs Stuart-Merrion had a solicitor look over the bakery records, how much of a scam Walker was running. What Mrs Stuart-Merrion didn't know is that one of the bills she paid each month for more than 12 years - that Walker told her was for employee superannuation, including her’s and Jeff’s - was Walker's personal credit card bill.
No super was paid. Instead, Walker was taking overseas holidays and living a life of luxury. At the same time the Merrions were unknowingly handing their profits over to Walker, a fire in a shop upstairs caused serious water and smoke damage to the bakery in May 2001 and it was forced to close.
Days became weeks, weeks became months and the bakery remained closed.
Walker told the Merrions their insurance company was being difficult and despite being insured for loss of profit and wages, they would have to live off a $300 a week allowance until the bakery reopened 10 months later.
Walker told them there was little insurance money, but he had organised for the insurance cheques to be paid straight to him, not through the bakery’s insurance broker. Investigations reveal that the first two insurance cheques, that were paid through the broker in the weeks after the fire, saw Walker receive more than $100,000.
The bakery re-opened in 2002, but eventually closed in 2006 when the landlord wanted to increase the rent. Walker told the Merrions it wasn't viable and they walked away "with nothing".
Years later, they lost their home and were forced into bankruptcy.
One of the most hurtful episodes in the saga - and still the bitterest pill for Mrs Stuart-Merrion - went unnoticed for years.
Walker had convinced her to transfer $37,278 she had in a superannuation fund set up in 1990 to a self-managed fund overseen by him. When Mr Merrion died suddenly in 2010, Mrs Stuart-Merrion contacted Walker to access her fund to help pay for the burial. Walker told her “after everything was paid out there was nothing left”.
“I still have no idea what that means,” she said. “I never authorised the withdrawal of any money and he tells me it's all gone. There should have been the $37,278.78, plus the super I should have been paid for more than a decade that Krusty’s operated.”
Furious at the betrayal, she got a Legal Aid solicitor to write to Walker demanding her money. He refused.
By current estimates, Walker cheated 70 clients out of more than $10 million. The final tally may never be known. Some of his victims are too embarrassed to speak up.
“We always felt like we owed him,” Mrs Stuart-Merrion said. “Ray put one of his houses up as security for the bakery. We knew it was a big thing for someone to do and we were always so grateful.
“But there’s only one reason he did it. It was all about him and what he could take and he took it all. After Krusty’s was done we hardly saw him again, he had no use for us anymore.”
Mrs Stuart-Merrion remembers one clear warning signal at the bakery one day.
“Ray came in with a briefcase filled with cash, it was more money than i’d ever seen in my life,” she said.
“When Jeff asked him how much a case like that would hold he told us it was $120,000. He said he had to pay Sarah’s university fees. It never made any sense to us, but we figured it was his business. We trusted him.”
Mrs Stuart-Merrion, who is struggling to make ends meet and desperately looking for work, doesn’t hold much hope of ever seeing her money again.
But like other victims, she is desperate to know what Walker, who killed himself after being found out in 2015, aged 67, did with all the money.
“Money was no object for Ray,” she said. “He was always moving houses, buying new cars, changing offices and ferrying his family on expensive holidays. That is one thing I will say for him, Ray certainly loved his family. With him around, they never wanted for anything.”
A Federal Court bankruptcy hearing into Walker’s affairs continues in July.
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