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The state’s legal watchdog is probing a suburban law firm over allegations that tens of millions of dollars disappeared from accounts linked to Victorian bookmakers.
The Victorian Legal Services Board confirmed on Tuesday it was investigating allegations that funds invested with AMS Ivanhoe Lawyers employee John Adams had gone missing. Adams died last week.
Tens of millions of dollars are allegedly missing, including funds from the Victorian Bookmakers’ Association.Credit: Nick Cubbin
“The VLSB+C is aware of allegations of misappropriation of investment funds by Mr John Adams (deceased), of AMS Ivanhoe Lawyers. We are undertaking a preliminary assessment of the allegations, including liaising with the law practice and relevant third parties,” the board said.
The Victorian Bookmakers’ Association oversees a $10 million fund on behalf of its members, with about 20 per cent loaned out by AMS Ivanhoe to Melbourne first mortgagors. A source close to the bookmakers estimated at least $20 million in additional private investments had disappeared alongside $1.8 million from the association.
The bookmakers’ association fears its $1.8 million investment is gone days before the biggest events on the spring racing calendar, including the Melbourne Cup, while one private investor could also be out of pocket an estimated $11 million.
“Following John Adams’ sudden death, we have identified a number of concerns in relation to mortgage investments he had arranged. We have reported these concerns to the Victorian Legal Services Board which is undertaking its own preliminary assessment of the matter,” AMS Ivanhoe said in a statement.
Adams had a long association with the racing industry. There is no suggestion that any other person at AMS other than Mr Adams is suspected of wrongdoing. Victoria Police has been notified of the allegedly missing funds.
Bookmakers have also privately invested millions of dollars with the law firm, seeking high returns on first mortgagor loans. A bookmaking source said they believe they had lost their investments.
Adams’ death last week prompted an examination of the firm’s books, which uncovered irregularities that prompted a report to Victoria Police and action from the legal regulator.
VBA board member Mark Samperi confirmed on Monday that $1.8 million had been invested with the law firm, which was meant to lend the money to private borrowers and secure it against mortgages. That money is allegedly missing.
Deceased lawyer John Adams.
Racing industry sources have told The Age that bookmakers suspect funds were invested in a building project in resort town Airlie Beach, in the Whitsundays region of Queensland.
Forensic accountants and the legal watchdog have descended on the modest firm.
The fund was accepting contributions as late as last month, with a member of the racing industry telling The Age the fund had accepted a payment of $250,000.
AMS Ivanhoe Lawyers was established in 1966 by Adams.
Samperi said the law firm had been asked by the VBA on Sunday evening for an explanation about the allegedly missing funds. He said the VBA would await its response before deciding whether to notify the Legal Services Commission.
“It has always been documented, audited and reported to all of our members and only represents about 20 per cent of the total funds held by the VBA,” Samperi said.
“If it turns out this money is missing, it only represents a fraction of our total funds, and I can assure everyone that we can well and truly meet all our guarantee obligations.”
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