Investigators are seeking assets of the man behind the Yarra Glen project, which enjoyed Victorian government support, writes Mark Hawthorne.
A convicted fraudster recruited wealthy investors for the failed Hilton in the Vines project, a proposed resort at Yarra Glen that was supported by the former Brumby government.
Timothy Christopher Humphreys, who was jailed for nine months in 1995 after pleading guilty to 17 counts of obtaining a financial advantage by deception, raised funds for the five-star Hilton resort, a project of the flamboyant multimillionaire Bernard Roux.
The revelation comes as investigators led by Norman Jones, a liquidator who investigated Alan Bond's personal affairs in the wake of his bankruptcy in 1992, search for assets that may belong to Mr Roux.
Last month the 30-hectare property fell into the hands of receivers and Mr Roux has filed for a debt agreement to stave off bankruptcy.
Before the collapse of his business empire, Mr Roux's remarkable wealth included his personal polo team based in the Gold Coast hinterland, a private helicopter and a cliff-top home at Portsea, Victoria, next to that of the transport magnate Lindsay Fox.
Mr Roux operated from an office called "East Wing" on the sixth floor of 101 Collins Street, Melbourne, which he shared with Mr Humphreys, who also has several businesses registered at that address.
In 1995 Mr Humphries was jailed for his role in defrauding two insurance companies. According to court documents, Mr Humphreys prepared "a number of bogus policies" as part of a scam to claim commissions. The court found he used the names of clients without their authority "in a dishonest way".
In sentencing, Judge Barnett of the County Court described Mr Humphreys as the "quintessential white-collar criminal". Mr Humphreys served nine months of a two-year sentence.
Documents obtained by BusinessDay reveal that Mr Humphreys had a key role in the business activities of Stockwell Holdings, the company developing the Hilton in the Vines resort. His signature appears on the letterhead of Stockwell Holdings as well as Stockwell Downs, the private company in which Mr Roux, 59, holds a number of his private assets.
The Australian Securities and Investments Commission will this week interview Hans de Weerd, an investor in the failed Hilton resort.
Mr De Weerd, 70, has been forced to end his retirement and return to work after losing almost $1 million in a number of projects promoted by Mr Humphreys and Mr Roux. "I met Tim Humphreys at a social event, and duck and wine dinner, and he encouraged me to invest in this Hilton project," Mr De Weerd said. "It's the most expensive duck I've eaten in my life."
Mr Roux's fortune has evaporated, and he has filed for a part 10 agreement with his creditors in order to stave off bankruptcy. Mr Roux has offered those creditors - which include National Australia Bank, Rupert Murdoch's nephew David Calvert-Jones, the bookmaker David McLachlan and Mr de Weerd - a one-off payment of just $100,000 between them in return for cancelling personal debts of more than $23 million.
It amounts to a fraction of a cent in the dollar.
One investor in the Hilton project, Marcus Noonan, has begun bankruptcy proceedings against Mr Roux. Mr Noonan has also liquidated Stockwell Holdings and Total Max, two of the companies behind the Hilton project. The liquidator appointed to those companies is Norman Jones.
David Graer of Advisory Business Solutions is investigating Mr Roux's assets. "We are very confident in being able to track down assets that may be of value to Bernard Roux's creditors," Mr Graer said.
A director of Stockwell Holdings and the project manager for Hilton in the Vines is Bruce Warner, a Melbourne businessman with close ties to the former state government.
Last year Mr Warner was engaged by Treasury to broker a deal with Crown Casino, which gave the casino an extra 150 gambling tables in return for handing over a greater share of poker machine revenue.
Mr Roux had access to the highest levels of the state government. The then premier John Brumby used the letterhead of the Department of Premier and Cabinet to write a letter declaring his "personal interest" in his project.
He also encouraged the Prime Minister of Papua New Guinea, Michael Somare, to invest in the project, and recommended that Tourism Victoria could assist with planning approval.
"I can assure you of my personal interest in this initiative and the opportunity it represents to strengthen the relationship between Papua New Guinea and the State of Victoria," Mr Brumby wrote.
At the time the PNG sovereign wealth fund Mineral Resources Development Company was looking to invest in the Hilton project. The deal collapsed before the PNG government handed over any funds.
Michael Roux, the chairman of Asian markets for KPMG, chairman of the Australian Davos Connection and honorary consul-general of Rwanda in Australia, has issued a statement distancing himself from his brother's business dealings.
"Neither I or my related companies have any commercial association with Bernard Roux's companies," he said. "This includes Hilton in the Vines."
Mr Humphreys and Mr Warner did not return calls. Bernard Roux refused to answer questions.
Frequently Asked Questions about this Article…
What was the Hilton in the Vines / Yarra Glen project and why did it fail?
The Hilton in the Vines was a proposed five-star resort at Yarra Glen that enjoyed support from the former Brumby government. The project collapsed, the 30-hectare property fell into the hands of receivers, companies behind the development were liquidated, and investors lost significant sums. Investigations are now underway into the project's finances and assets.
Who were the key people and companies involved in the failed Hilton in the Vines resort?
Key figures named in reporting include developer Bernard Roux, promoter Timothy Christopher Humphreys, project director and manager Bruce Warner, investor Hans de Weerd and creditor-turned-litigator Marcus Noonan. Companies tied to the project include Stockwell Holdings, Stockwell Downs and Total Max; the property is now in receivership and some companies have been liquidated.
What is known about Timothy Humphreys' role and criminal history in relation to the project?
Documents show Timothy Christopher Humphreys had a key role in Stockwell Holdings (the developer) and helped raise funds for the Hilton project. He has a criminal history: in 1995 he pleaded guilty to obtaining a financial advantage by deception, was found to have prepared bogus insurance policies to claim commissions, and served nine months of a two-year sentence.
How much money did investors lose in the Hilton in the Vines scheme?
Reports say at least one investor, Hans de Weerd, lost almost $1 million and had to return to work after the losses. Bernard Roux's creditors are owed more than $23 million in total, while Roux has offered a one-off combined payment of just $100,000 to creditors — a tiny fraction of the debts.
Are regulators and liquidators investigating the failed resort and can investors recover assets?
Yes. Liquidator Norman Jones and advisory firm Advisory Business Solutions (David Graer) are searching for assets that may belong to Bernard Roux that could be of value to creditors. The property is in receivership and companies have been liquidated. The Australian Securities and Investments Commission (ASIC) is also involved and will interview at least one investor linked to the failed project.
What legal steps has Bernard Roux taken after the collapse of his business empire?
Bernard Roux has filed for a Part 10 debt agreement in an effort to stave off bankruptcy and has offered creditors a one-off payment totalling about $100,000 in return for cancelling more than $23 million of personal debts. At least one investor, Marcus Noonan, has begun bankruptcy proceedings against Roux and has liquidated companies tied to the project.
Did the project have any government support or endorsements?
The project attracted high-level government attention. The then-premier John Brumby used Department of Premier and Cabinet letterhead to state a personal interest in the initiative, encouraged PNG Prime Minister Michael Somare to consider investment, and suggested Tourism Victoria could help with planning — though the PNG deal collapsed before funds were advanced.
What practical lessons should everyday investors take from the Hilton in the Vines collapse?
The case highlights the importance of conducting thorough due diligence: check promoters' backgrounds and criminal histories, verify the corporate structure and who is signing documents, be cautious about projects that rely on personal introductions or prestige rather than transparent funding, and be realistic about recoveries when companies go into receivership or liquidation.
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