On 23 March 1998, low-profile Melbourne tax-lawyer, Max Green, was found dead in a luxury Phnom Penh hotel. Green was later discovered to have been the perpetrator of a $42 million fraud and was believed to have been murdered by an investor in his Ponzi scheme.

Green had devised what appeared to be a tax minimization ruse, which ostensibly involved leasing low-cost equipment to CityLink. Green even went to the trouble of counterfeiting CityLink invoices as part of the fraud which essentially involved taking money from investors and stealing it.

One of the more surprising aspects of Max Green’s conduct was that he didn’t really need the money. Green was married to Louise Baron — daughter of former BRW Rich 200 member, rag-trader Nathan Barron. Barron was worth upwards of $100 million at the time of his death a few years ago.

So if money wasn’t a prime motivation — why would a softly-spoken tax lawyer commit such a blatant fraud? Many suspect that Max Green was motivated by more than merely money, instead, he yearned for the respect achieved by his Sydney-based brother, Phil. According to reports, Max Green had used his ill-gotten lucre to invest in Asian gem mines.

Phil Green, like Max, was a tax accountant and lawyer. Green was a senior manager at the now defunct Arthur Andersen. In 1984 Green joined US-based Babcock & Brown, then, a small firm which specialized in aircraft leasing. From there Babcock grew into a real estate and infrastructure firm, which later specialized in creaming fees from satellites.

While Phil was building his empire at Babcock, his less successful brother Max was working in the United States at a small fashion jewelry company called Emma Page. Max Green later returned to Melbourne and re-commenced his legal career at the small firm of Gary Shugg. A few years later Shugg was found guilty of misusing clients’ funds (he blamed Green) and the firm collapsed.

Max Green later moved to another minor firm called Coleman Aroni and commenced his massive and ultimately ill-fated fraud. (Ironically, it has been alleged that the idea for Max Green’s tax-minimization scheme involving low cost equipment purchases came from Phil, himself a tax lawyer).

We wonder what Max Green would be thinking if he was around to read The Australian last night, with John Durie revealing that Phil Green had relinquished his role as CEO of Babcock & Brown. Only last year, Phil Green was worth more than $500 million. Now, he has been pushed from his role as CEO and his wealth is probably less than $50 million, subject to debt.

Unlike Max, Phil Green’s corporate death has been a slow one, Babcock scrip gradually retreated from a high of $33 prior to the credit crunch as the company continued to tell investors all was well. On Tuesday, Babcock threw in the towel and requested a suspension with its scrip trading at only $3.45 — down almost 90 percent from its highs. The company floated in late 2004 at $5.00 per share.

Green is expected to remain a non-executive director of Babcock, however, given his role in its downfall (virtually all Babcock shareholders would be significantly down on their investment) it would appear his long term future at the firm and in Sydney business circles would be in serious doubt.

Peter Fray

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