BRETT Walker hadn’t slept.
He was sitting “panicking” at his computer in the Newcastle accounting office he shared with his father, Ray Walker, who had been accused of stealing vast sums of money from clients.
It was 6.40am on July 30, 2015. Brett Walker pressed send on a three page email to his father, who would be found dead later that night, dead from suicide at the family’s luxury Nelson Bay beachfront holiday home.
The contents of the email were revealed this week during a Federal Court bankruptcy trustee investigation into Ray Walker’s estate, where Brett Walker spent two days giving evidence.
For Ray Walker's victims, mainly Hunter-based retirees fleeced of their life savings, it had been a long time coming. They wanted answers from the man who spent 25 years working alongside his father.
To those who had met him before, at the W Walker & Co accountancy offices, Brett Walker was barely recognisable. He looked much older and had lost weight.
During breaks, he had to leave the court, awkwardly brushing shoulders with his father's victims in the hallways. Many of them holding signs and wearing shirts on the second day saying "I don't recall", "I can't recall" and "I honestly can't recall" - in response to his evidence given the previous day.
If the victims thought they were there to get an understanding of how Ray Walker managed to run a Ponzi scheme for decades that drained their life savings, ultimately stealing $10 million from clients under the guise of a reputable accountancy firm, that Ray and Brett ran as a partnership for eight years, they were wrong.
After nearly three years of waiting for answers, it was all an anti-climax. For the most part Mr Walker, the head of Active Accounting Group, struggled with his memory and could not recall details.
He said the first time he learnt his father was taking money from clients in a pooled investment scheme - that he was not licensed to run - was in July 2015 when he was copied into a letter from solicitor, Rob Brook, demanding Ray Walker return a client's retirement funds.
Parts of Brett Walker's poor memory were challenged by the bankruptcy trustee's barrister, Anthony Spencer, SC, who accused him of doing “nothing” about the fact that his father’s “dishonesty might extend further than something that was right under” his nose.
Mr Spencer honed in on the email written by Brett Walker to his father as the Ponzi scheme began to unravel.
"Think I have hit rock bottom now as well - did not sleep last night and have been in here at work panicking ...," Brett Walker wrote. "You have taken client's money on false pretences by stating it will be held in term deposits where you get more interest by grouping funds together - I know this to be the truth as I have heard you use these lines to clients since I was a trainee."
But when asked about his knowledge of the investment scheme, Mr Walker said he knew nothing. He said the email referred to a conversation he had in the 1990s with his father who was running a debt factoring business, and at times, pooled funds to invest them.
"I had actually not heard him use those lines to clients ...," Mr Walker said. "He actually said them to me ... I have no recollection of hearing that at any other time.”
Mr Walker said he also did not remember seeing, as described by the accounting firm's longest serving employee, receptionist Gayle Wheatley, clients coming to the office every month, over decades, to collect envelopes of cash left for them by Ray Walker.
He only remembered seeing it "occasionally" as a trainee and thought it was to do with the debt factoring business. "I had no recollection of it happening once the partnership started," Mr Walker said.
Partners in an accounting practice can be held legally responsible for a firm’s debt, a point Brett Walker made several times in the email to his father. Under advantages of doing the “right thing” he listed, “not leaving me financially responsible for paying back all the clients you stole from before December 2008”.
The Walkers were in a formal partnership from 2000 to 2008 when a restructure saw accountants at the firm working in the same office but as separate legal entities.
Mr Walker said he was certain the decision to dissolve the partnership had nothing to do with him being concerned about his father. It was because his business was growing and his father's was not, he said.
But he was less certain, however, about the details surrounding one of his client's two-year struggle to get information about $30,000 he invested in a unit trust run by Ray Walker that purchased the Cosmopolitan Hotel in Carrington.
He could not remember the details of conversations he had with his father about the investment, and he could not recall being concerned that his father might be acting dishonestly despite the client asking for an audit because he thought the scheme looked “dodgy” and smelled.
"What on earth is going on with Cosmopolitan?" the client wrote to Brett Walker in November 2011. "I have had no report - no update - nothing, nothing, nothing. It has been forever - I am looking for a conclusion as it really is beyond the joke now."
Brett Walker responded that he had "chased" his father repeatedly and that he was "not in the loop in regards to this (intentionally kept in the dark is probably more accurate!)."
More than two year later, the client was still chasing information about the investment and emailed Brett Walker again. "So what is the property valued at? How much of it do I own? What was it originally purchased for? Note: I would really like to see the books and have them audited as it all appears rather dodgy and the whole thing has an odour to it. Can you organise an official audit of the books for this trust?”
Asked by Mr Spencer if he was "shocked" by the email, Mr Walker said he couldn’t recall.
Mr Spencer: "You knew your father was not being honest and you ignored it."
Mr Walker: "No, I thought my father was being slack."
Mr Spencer: "His call for an audit of the books passed unheeded by you."
Mr Walker: "Yes."
When Ray Walker eventually produced financial documents for the investment, Brett Walker said he did not check them.
The chicanery the client feared was indeed real. Ray Walker’s clients lost hundreds of thousands of dollars after he sold the hotel without their knowledge.
The court heard Ray Walker lost $1.8 million in a failed Adelaide property venture that Brett Walker was a co-director of. Brett and Ray took out a bank loan for $300,000 to pay the deposit on a property, but lost the money when the venture failed.
Asked how the $300,000 loan was repaid, Mr Walker said he was “not sure on the specifics”. “I believe my father repaid the loan,” he said.
When pushed for details, he said he did not know where the money came from.
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