MELBOURNE lawyer Michael Brereton, who has battled five years of investigation by the Australian Crime Commission and an even longer Tax Office inquiry, now faces 19 charges brought by the Legal Services Commissioner.
Mr Brereton, who did not renew his certificate to practise law when it fell due on July 1, has been accused of wilful and reckless misconduct in his handling of clients money as well as misappropriation of funds from his companys trust account.
Several disciplinary charges levelled by the Legal Services Commissioner relate to undocumented transactions totalling many millions of dollars through Mr Breretons trust accounts.
Some involved companies such as Westminster Finance, which reportedly is registered in the British Virgin Islands, has a London address and is known to be of intense interest to the multi-agency Wickenby taskforce examining large-scale tax avoidance.
The charges against Mr Brereton arose after Ron Hall, an inspector attached to the Law Institute of Victoria, in February 2004 did a routine check of Mr Breretons accounts only to find a dearth of financial records.
Mr Hall reported to the LIV that many transactions in the trust account lacked any documentation or explanation.
He also allegedly found that Mr Brereton regularly dipped into the trust account to pay himself or his company,Michael Brereton & Co, sums of several hundred thousand dollars at a time for fees or retainers, but these were not documented.
Other sums were paid from the trust account to companies in which Mr Brereton had a financial interest, or that he controlled, and further substantial sums were paid to GDK Financial Solutions, an investment planning company formerly controlled by a business associate at that time, David McLeod.
Kerri Judd, SC, for the Legal Services Commissioner, yesterday told a three-member panel at the Victorian Civil and Administrative Tribunal that one of the biggest difficulties faced by investigators examining Mr Breretons accounts was his failure to co-operate.
The difficulty with all this is that all we have is this trust ledger account, Ms Judd said.
We have tried to get information from Mr Brereton time and time and time again, (but) there is no documentation to justify any of these amounts being extended.
It may well be that all this can be explained, but we have never received any explanation -we have asked and asked and asked.
Mr Brereton did not attend the tribunal hearing-his office said he was overseas - and it is not clear if he denies the charges.
Barrister Peter Merley, who represented Mr Brereton yesterday in an unsuccessful lastminute bid to postpone the VCAT proceedings, told BusinessDay outside the tribunal that he did not have any instructions about Mr Breretons defence.
MrMerley has filed an action in the Victorian Supreme Court to overturn a decision of VCAT deputy president Mark Dwyer on July 2, when he declined to adjourn the hearing.
Mr Dwyer yesterday again refused to adjourn it, despite confirmation that the Supreme Court would hear the matter on Friday morning.
In her opening address, Ms Judd outlined various transactions in Mr Breretons trust accounts from early 2000 when he was the lawyer appointed to receive funds from investors participating in a proposed retirement village scheme at Collendina, near Ocean Grove.
The Federal Court in 2006 found the schemes were illegal because they were unregistered.
Ms Judd said Mr Brereton was entrusted to hold the funds for investors, but the trust account ledger indicated he disbursed $4.43 million to himself, his companies and to Mr McLeods companies so that by May 2000 the account was about $186,000 in deficit.
Mr Brereton allegedly failed to notify his auditor of the deficiency and Ms Judd said he never restored the deficit.
Ms Judd said the investigators had not been able to trace where all the money went.
Its very difficult to work all that out, where the money ended up, but Mr Brereton is obliged to account for what purpose this money was being used, she said.
Ms Judd said it was quite extraordinary for the transactions to proceed when the funds were meant to be held on trust and as a deposit for a land purchase.
What we say is there are no documents whatsoever to link these transactions to the Collendina project, she said.
Mr Brereton has been given the appropriate opportunity to explain that (and) he has done nothing of the sort.
The hearing continues this morning.