SMH July 24
Kate McClymont and Stuart Goodman
The murky world of secret payments to rugby league players to circumvent the salary cap is haunting the Parramatta Eels, with Eddie Obeid jnr admitting to financially assisting troubled star Chris Sandow, providing a discounted apartment to Darcy Lussick and offering real estate advice to Will Hopoate.
Mr Obeid jnr, the son of disgraced former Labor powerbroker Eddie Obeid, is alleged to have organised for Sandow's estimated $550,000 salary to be topped up by as much as $200,000 a year and for Hopoate, who earns about $750,000, to be paid an extra $50,000 to $100,000 a year in deals not registered with the National Rugby League.
In what has been described as a massive conflict of interest, a Fairfax Media investigation can reveal that for years the controversial former Eels chairman Roy Spagnolo directed a number of third-party player payments, including money owed to Jarryd Hayne, into front companies he had set up for his own property development deals.
Mr Spagnolo, who controlled the club from 2009 to 2013, was recently found to be "not a fit and proper person" to run a registered club. This follows a lengthy investigation into the club's governance by the Independent Liquor and Gaming Authority.
Sources close to the Parramatta club have claimed that off-the-book payments, which could total more than a million dollars, were made during the Spagnolo regime. The extent of the problem has been coming to light in recent times.
One example is a payment of $18,000 in September 2012. Although the payment was ostensibly for financial services, a handwritten notation on the back of the invoice indicates the money was for then player Luke Burt.
Fairfax Media can reveal the payment from the club went to a company formerly run by an employee of Mr Spagnolo's and controlled by a close associate. Mr Burt, who was personally managed by Mr Spagnolo, retired at the end of 2012. He is now on the Eels coaching staff.
One unregistered third-party payment to star player Hayne went into a Spagnolo-controlled company, Abdullah Pty Ltd, even after Hayne had left the Eels to play American football with the San Francisco 49ers.
Despite no paperwork, in December 2014 the Parramatta Leagues Club paid $26,000 to Abdullah Pty Ltd on Hayne's behalf.
Another payment for $26,000 was made to Hayne's manager, Wayne Beavis, in April this year.
Fairfax Media does not suggest any of the players knowingly breached the salary cap.
Mr Beavis expressed alarm when informed this week that Mr Spagnolo was behind the mysterious company into which some of his client's money was being invested.
"If I had known that, we would have made sure it didn't happen. You can't have that conflict of interest," said Mr Beavis.
Mr Beavis said the agreement was reached with the recently departed chief executive Scott Seward. "We reached a third-party agreement to keep Jarryd current with the company and we sent them two invoices and they were both paid," he said.
Mr Beavis said that the payments weren't registered "because I never got any paperwork off the club. That's not my fault. That's the club's fault," he said.
Mr Seward was unable to comment due to a confidentiality agreement and Mr Spagnolo did not return calls.
Mr Spagnolo's cousin, Roy "Billy" Spagnolo, Hayne's accountant, told Fairfax Media that "Abdullah is an investment company" into which Hayne's third-party payments were paid.
However, a bitter legal battle between Roy Spagnolo and his former close friend and business associate, George Gaitanos, has revealed that it is Mr Spagnolo himself who controls Abdullah Pty Ltd, which is demanding a $4.3 million payment from Mr Gaitanos over soured property deals.
Mr Gaitanos is accusing his former friend of misleading and deceptive conduct and claims that by getting investors to put money into Abdullah, Mr Spagnolo was running an unregistered investment scheme.
When asked if Abdullah was a registered investment scheme, Billy Spagnolo said he couldn't answer any more questions. "Are you sure you are not calling from the tax office?" he asked.
Club insiders say that Sandow's manager, Isaac Moses, recently demanded the club honour payments promised to his client by Mr Obeid jnr but the club is refusing to accept responsibility for what appear to be unregistered deals previously negotiated by the former regime.
Mr Moses, who denied making the demand, said he never comments on client's contracts.
As for Mr Obeid jnr, he initially declined to comment on allegations he had being paying Sandow between $100,000 and $200,000 per year.
He also declined to answer questions about rumoured payments to Hopoate, but he was happy to confirm that his family's company had sold Lussick a discounted unit in Top Ryde.
"Yes, that's true. I don't have any issue with that. I helped him with his unit," said Mr Obeid jnr.
The following day, Mr Obeid jnr said that as "a property developer and friend" he had provided advice to Hopoate about the property market.
He also said he "personally helped Chris [Sandow] in a small capacity financially from time to time as a friend", but that his attempts to secure third-party deals for Sandow via business associates had failed.
"Given Chris's continual issues both on and off the field, companies felt it was not in their best interests to hire Chris's services. It was just too hard, given his circumstances," said Mr Obeid jnr.
As to Mr Obeid's motivation, he said the answer was simple. "I love the club. If asked, I will always help anyone associated with the Parramatta Eels."
He went on to have swipe at the new management.
"In my opinion, good people have come and gone at the board and administration level - smart, honest business people who have the contacts, experience and business acumen to deliver the Eels safely into the future. Sadly, they have been moved on because they wouldn't bend on their business principles."
The National Rugby League sets salary caps for the clubs; players can earn unlimited amounts of money outside the club, but there are rules.
Players can receive money from corporate sponsors who are not associated with the club and who do not use the game's intellectual property, such as club logos, jerseys or emblems. These third-party arrangements have to be approved and registered by the NRL.
The TPAs, as they are known, may not be negotiated by the club as an incentive for a player to sign a contract, nor can they be guaranteed by the club.
But there is a shadowy world where the salary cap is breached through players receiving money off the books. Common methods include paying for holidays, cars, offering free rent or organising discounted property purchases.
Replies
So we were paying nearly a million dollars in secret third party deals... sounds like the same amount we were paying to players at other clubs last year. I guess it all evens out & we still managed to miss the finals.
Jarryd Hayne's payment trail leads to former Parramatta Eels boss Roy Spagnolo's Abdullah company
July 24, 2015 - 2:39AM
Kate McClymont and Stuart Goodman
Last year, one of footballer Jarryd Hayne's third-party sponsors wanted to know why he was being asked to pay the star player's money into a mysterious company called Abdullah Pty Ltd.
Google Abdullah Pty Ltd and up pops a welding repair business which lists its address in Huntingdale Avenue, a duplex, in suburban Miranda. This is the same address that Abdullah's sole director, Malaysian-born Nur Abdullah, 47, nominates in official documents lodged with the corporate regulator.
The Miranda address to which the company Abdullah is registered. Photo: Ben Rushton
This comes as a complete surprise to the Lo family who have lived in the Miranda property for more than 20 years.
Ring the number that Abdullah advertises on the internet, and the phone is answered on the other side of Sydney, at US Manufacturing Pty Ltd, an oil and grease importer based in Dural.
A man claiming to be Robert Abdullah answers, eventually saying that Nur was his ex-partner. He offers some unflattering descriptions of her activities, none of them to do with welding, or with payments to Parramatta players.
Roy Spagnolo. Photo: Simon Alekna
Abdullah Pty Ltd is run by accountant Roy "Billy" Spagnolo, who advises Hayne. Billy shares offices in Fairfield with his cousin Roy Spagnolo, the former chairman of the Eels.
Billy Spagnolo says Abdullah is like a bank account but offering better interest.
Asked who Nur Abdullah is, Billy Spagnolo replies, "She is the director of that company."
But who is she? "Oh, I dunno. It's just a company we use here at the office."
So she was a front? "What do you mean a front," says the tax agent indignantly. "You're not ringing from the tax office are you?"
But court documents go some way to solving the mystery. Former Eels boss Roy Spagnolo is revealed to be the controller of Abdullah, which has been used to channel investors' funds, including several Parramatta players, into Roy Spagnolo's troubled property development empire.
According to Mr Spagnolo's statement of claim lodged with the Supreme Court, from July 2010 to February 2015, Abdullah advanced money to Mr Spagnolo's former friend George Gaitanos for use in their developments. Abdullah and Mr Spagnolo are demanding Mr Gaitanos pay $4.3 million.
As for Ms Abdullah, she is at the top of the list of 186 back-dated memberships which Mr Spagnolo allegedly created in an attempt to regain control of the club in May 2013.
The South Hurstville address given in her membership details happens to be that of Xavier Lo, a long-time employee of Mr Spagnolo.
Coincidentally, it is Mr Lo's brother who lives at the Huntingdale Ave address in Miranda which is the address Ms Abdullah gives in her company documents.
Read more: http://www.smh.com.au/rugby-league/parramatta-eels/jarryd-haynes-pa...
Who is Roy Spagnolo?
July 24, 2015 - 2:38AM
Kate McClymont and Stuart Goodman
Former Parramatta Leagues Club chairman Roy Spagnolo with his car, sporting the Parra numberplate. Photo: Simon Alekna
By the end of 2013, Roy Spagnolo was in a bit of a pickle. He'd failed in his attempt to wrest back control of his beloved Eels from usurpers and more of his property development businesses had followed a familiar path of going down the gurgler, owing the Tax Office millions.
On top of this, he was the subject of an investigation as to his role in the creation of 186 fraudulent memberships set up to try to win the May 2013 Parramatta Leagues Club board elections.
Spagnolo, an Eels tragic whose car sports the numberplate "Parra", ran the wealthy club from 2009 until he lost a bitterly fought election in 2013.
To add insult to injury, the Office of Liquor and Gaming commenced an investigation into allegations that Mr Spagnolo and the former Eels chief executive Bob Bentley were involved in attempted membership tampering.
As Fairfax Media's Chris Barrett reported at the time, Mr Spagnolo was in Mr Bentley's office at Parramatta Leagues Club in April 2013 when a phone call was made to the supplier of their membership software system, Aristocrat, seeking instructions on how to backdate records.
"What they did not realise," wrote Barrett, "was that every entry they made on the club's membership software program, backdating dozens of memberships and making up others, was being recorded on a backup system."
Among those to have had memberships created in their name and backdated were Spagnolo's brother-in-law Patrick Agostino, friend Roy Mittiga, who was jailed in 1992 over insurance fraud, former friend George Gaitanos, whom Spagnolo is now suing, Vince Lombardo, who provides the team with free drinks and meals at his Brisbane pub, and bankrupted real estate agent Pat Sergi, who was named at the Woodward royal commission into the late crime boss Robert Trimbole's marijuana activities in Griffith.
In 2009, a Fairfax Media investigation revealed that Mr Spagnolo had an extraordinary run of bad luck as a property developer, with eight of his property development companies failing, leaving debts to tradesmen and more than $1 million owing to the Tax Office.
A Fairfax Media investigation can reveal that Mr Spagnolo's fortunes have not improved. Corporate documents show that more of Mr Spagnolo's companies have collapsed.
In June 2013, administrators were appointed to a company controlled by Mr Spagnolo and his friend Frank Carioti, which had gone done the tube owing the Tax Office $2.9 million.
The previous liquidator of Mr Spagnolo's eight failed property developments, Peter Ngan, was subsequently banned by the corporate regulator for failing to properly perform his duties as a liquidator in relation to other matters.
Replacing Mr Ngan in Spagnolo-related matters is insolvency expert Ozem Kassem, from Cor Cordis.
In 2013, Mr Kassem sided with small creditors, mostly friends and relatives of Moses Obeid, to accept only a few cents in the dollar in full satisfaction of their debts. This effectively wiped out the $16.6 million debt Mr Obeid's company Streetscape owed the City of Sydney. The council later had this arrangement overturned.
Mr Spagnolo is currently embroiled in a bitter legal stoush with his former close friend Mr Gaitanos. Mr Spagnolo and Abdullah Pty Ltd are suing Mr Gaitanos in the Supreme Court, claiming they are owed $4.3 million by Mr Gaitanos over property investments.
For his part, Mr Gaitanos is claiming that Mr Spagnolo engaged in deceptive and misleading conduct and was secretly running an unlicensed investment scheme using Abdullah.
Read more: http://www.smh.com.au/rugby-league/parramatta-eels/who-is-roy-spagn...
'' Roy Spagnolo had 8 failed property Development companies'' what an absolute disgrace.
This is happening at every club, its just disappointing that its got out of the bag.
Previous board facilitates the unregistered third party deal, sandow says Parra owe him the money. By holding the club to ransom, suggestion is there that he is knowingly part of the salary cap breach.
If the NRL is serious about the cap they will deregister sandow and his manager.
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