It centres on the prosecution of one Rodney Goullet who, in the words of Judge Michael McInerney, was a “Svengali-like figure who manipulated financial institutions”.
Schulz also found himself in the “elevated” position of the sole director and shareholder of both companies
“No doubt he felt that was very important and was told by Mr Goullet how important that was. The problem and the reality was, the only reason he was in that position was because Mr Goullet, a failed businessman and a bankrupt, could not hold a corporate position.”
Not too long after, Schulz agreed to guarantee a $1 million loan from Westpac which, the judge says, was granted in less than rigorous circumstances.
“How and who approved the loan from Westpac is a matter, in my view, that should be investigated, if not by the authorities, by Westpac themselves. I wonder what the shareholders would think of Westpac actions in such circumstances. I make the point, this is post the world financial crisis,” he says.
Still Goullet’s web of companies were barely afloat, so what to do? Get a credit card, of course.
“Hence, the idea to utilise AMEX to obtain short-term relief for the company. That is an amazing phrase, when you think about it.”
The first charge on the AMEX was not to sort out wages but to settle a $25,000 debt on Goullet’s Mercedes.
Goullet, the judge went on, then used the corporate AMEX to purchase boat motors from America “to continue the entitled lifestyle of himself and his [girlfriend]”.
Add to that a $9000 family holiday at Hayman Island.
Next on the menu was a mortgage from the ANZ for a Porsche using forged documents.
Goullet described a company to the bank that was turning over $4 million a year, pumping out a profit of almost $800,000, and a backer, Schulz, in rude financial health.
“Both of such corporate and individual financial documents being false, none of them were apparently ever independently checked by ANZ,” the Judge says.
He also got ANZ to spring for a forklift.
When Schulz complained that Westpac wouldn’t lend him money for property, Goullet switched Schulz out as guarantor on Westpac’s $1 million and installed an employee instead.
This employee had, in the words of the judge, “no assets, or personal trading history” yet Westpac happily signed it over – but not before one of its staff inspected an accursed machine at the centre of the enterprise.
“In what is an absolutely remarkable photo … there is the representative in the exhibit photo, smiling and looking at the machine,” the Judge says.
The employee was soon bankrupted and their “business” liquidated, with Westpac never recouping its money. The machine in the picture was “valued as essentially being worthless”.
“Again, no doubt Westpac shareholders would be outraged to find the bank involved in such intemperate financial dealing and being so easily duped by Mr Goullet.”
By early 2012, Schulz had enough. He came to Melbourne, fired Goullet and called in the police. Goullet to the end showed little remorse, according to the judge, and was sentenced to four years’ jail.