If the defendant (Susanne Bond) or myself required money at any given time Mr Bollag would be contacted and money would appear from Switzerland.
Sworn Statement of Armand Leone, 23 May 19881
The mysterious Mr Bollag had already hit the headlines a month before Bond went bankrupt. Or, to be precise, he had hit a young Kiwi photographer called Nigel Marple who was trying to take a picture of him for the Sydney Morning Herald.
The incident had happened in London on 11 March 1992 outside the Bonds’ house at 14 Selwood Place, Chelsea, where a journalist had already spotted Alan sitting in the front room. Marple had gone down there in the hope of grabbing a picture, but a tall man with grey curly hair had emerged from the house instead and made his way towards a parked car, swearing at the photographer as he did so, and telling him he had no right to be there.
Nigel Marple had not the slightest idea who this angry man was, and neither did the rest of the world at the time. But Jurg Bollag had guaranteed himself instant fame by putting his briefcase up to hide his face and then shoving it hard into Marple’s lens. It had given the mild-mannered New Zealander a nasty cut on the nose that had ‘bled like buggery’. And it had instantly identified Bond’s philanthropic friend as a man who valued his privacy.
But Bollag’s reluctance to be photographed was hardly surprising because it would soon become clear that he was sitting on assets worth up to $50 million that Alan Bond and his family enjoyed. For not only had he paid Bond’s legal fees, he had also spent millions of dollars over the years on diamonds for Eileen, horses for Susanne, a yacht for Alan and an apartment for Diana Bliss, plus houses, ski lodges, farmland, paintings and country estates that Bond and his family now had the use of.
Alan’s story would be that Mr Bollag was merely a generous friend, who had purchased these baubles with his very own funds, then selflessly handed them over to the Bonds to have fun with. But if you believed that, you would believe anything.
Bollag, for a start, did not appear to be particularly wealthy. He lived in a small town in Switzerland in a modern development with four or five similar houses. Like the others, his wasn’t a waterfront property and had no view of the nearby lake. It was a comfortable brick-and-tile home in a suburban cul-de-sac that had probably been built in the 1970s for an accountant or a bank manager. It was what real estate agents called an executive residence. But it was not the home of a multi-millionaire.
Nor, if his tax returns were to be believed, was Bollag even a millionaire. These, amazingly, could be inspected at the local municipal offices, and revealed an annual salary of $170,000, which in Switzerland was no more than a decent living. His net worth in 1992 was a solid but unspectacular $550,000, which was well short of the magic million. And on that basis, he had just rendered himself completely penniless by paying Bond’s lawyers’ bills.
Clearly, there was something amiss. In fact either Jurg had been telling porkies to the Swiss taxman, or Alan was lying when he said that Bollag had bought all the houses, horses, paintings and jewels with his own money. But it had to be said that Bond’s account was pretty incredible even without the evidence of the tax returns. For in 1989 Jurg had forked out £315,000 to settle Alan’s bill at the top London jeweller Aspreys and had never asked for his money back. And in November 1990 he’d paid for Alan’s new ocean racer Jackaroo. This was at a time when lending money to Bond was financial suicide, because his public company, Bond Corporation Holdings, had already collapsed into the arms of the receiver with a deficit of $4.5 billion, and death for Dallhold was bound to follow hard behind. Yet Bollag had splashed out $250,000 for Alan’s brand new boat that was being built in Perth.
In both these cases, as with the legal fees, the cash had come from bank accounts in Zug that Bollag controlled. But the supposed ‘sponsor’ of the boat had been a Liberian company called Jupiter Services, resident in the West African city of Monrovia. It was a mystery what this outfit stood to gain from Alan’s sailing activities, but it was even harder to explain why it hadn’t got its money back when the project had been canned. The boat builder Skip Lissiman had written to Bollag to tell him that he had been instructed to pay the unused $55,000 to Alan Bond’s account in Perth. And Bollag had not uttered a murmur of complaint.
But as investigators would discover, these were just two of at least a dozen examples of Bollag’s baffling generosity, for which there was really only one sensible explanation: that all this money belonged to Bond.
In April 1992, when Alan went bankrupt, Bollag was a tanned, slim, fit-looking forty-eight-year-old who had known Bond for eight or nine years. They had met while Bollag was working in corporate finance at the Dow Banking Corporation in Geneva, which, like most of the other banks in the world, was then lending money to the Bond Group.
In November 1986, he had set up shop by himself in his hometown of Zug, to look after other people’s money.2 And there was no doubt that Alan Bond was his biggest client.
To run his new business, Bollag set up a company called JF Consulting, with the initials reflecting his first name, Jurg, and his wife’s name, Florence. But files at the local corporate registry showed the company had at first been christened Crasujo Investments.
This name had been changed after only two months. And, when you thought about it, it wasn’t hard to guess why. Crasujo formed an acronym for three of Bond’s children: Craig, Susanne and Jody, or Craig, Susanne and John. Which made it pretty easy to divine whose money Mr Bollag was investing if it wasn’t his own.
In fact, as investigators would soon discover, Bollag had declared Crasujo Investments in 1987 to be the owner of the Liberian company that would so kindly pay for Alan’s boat Jackaroo. But that is jumping the gun. For first we need to explain how Bollag’s name came into the public eye in 1988, as a result of a marriage that went drastically wrong.
Susanne Bond’s wedding in Perth in November 1985 to the New York doctor Armand Leone had come with the trappings of a fairy-tale romance and all the glitz that money could buy. It had been Australia’s version of Dallas, the next best thing to Charles and Di. The caterers and the florists had been flown in from Melbourne, Prime Minister Bob Hawke had sent a telegram of congratulation, and there had been vintage Krug on tap.
But two years later, the marriage had fallen apart, and a bitter row had begun over who would get what, and in particular over who owned their valuable horseflesh. Susanne and her husband were both international showjumpers who between them had at least a dozen horses worth nigh on $3 million. But Susanne was adamant that some of the most expensive ones could not be included in the divorce settlement because they didn’t belong to her or her spouse.
The full story of the fight over these animals involves bizarre tales of horsenapping on both sides of the Atlantic, as Susanne and Armand both tried to hang on to what they believed to be theirs. But events in the courtroom were even more intriguing to Ramsay and others who were trying to trace Bond’s overseas assets, because in May 1988 Susanne swore in an affidavit to a New Jersey court that five of the couple’s horses worth more than $1 million had been paid for by Bollag, through two of his offshore companies, Siren Company and Kirk Holdings. The ever-generous Mr B had supposedly bought them with his own money, then allowed Susanne to ride them because he was so keen that she should be selected for the Olympics.
Susanne’s deposition, which explained how all this had come about, made it sound as though Bollag had been discovered almost by chance. As she told the story, she and Armand had travelled to Perth to talk to her father and Robert Pearce, the managing director of Dallhold Investments, about finding a buyer for a talented young horse called Puntero, that had already won a big competition in Europe.
I asked Dad would he be able to find a company that might be interested in investing in a horse. He said okay and then from there I left it in the hands of Robert. And Kirk Holdings purchased the horse.3
Puntero had duly been bought in October 1986 for US$325,000, with money telexed to the USA from an account at the Allied Irish Banks in Jersey, where Bollag’s company Kirk Holdings was apparently based. Yet Bollag had never even bothered to look at the animal he was buying.
According to Armand Leone’s sworn statement to the court, Leone himself had flown to Mexico with a trainer from Europe to inspect Puntero, and the horse had then been shipped directly to his father’s farm in New Jersey, where it had remained. Bollag had never had anything to do with it.
Nor had he even given instructions for the money to be paid. These had come instead from Robert Pearce, Bond’s managing director at Dallhold, who had authorised a firm of Jersey accountants to transfer the funds to an account at Paine Webber in New York. It was unthinkable that he would in fact have been able to do this, and do it by telephone, if Kirk Holdings had genuinely been Bollag’s company. But that wasn’t the only problem with this story, for Puntero’s passport showed Armand and Susanne Leone to be the horse’s owners, even though it had supposedly been bought by Bollag. And there was similar confusion with another top-class jumper, Ladino, that had been purchased for US$200,000 by Bollag’s Siren Company. This time the passport declared that the horse belonged to Alan Bond and Dallhold Investments.
Leone was also quite scathing about the notion that Bollag was just a generous family friend. His sworn statement to the court painted a remarkable picture of Jurg as keeper of the Bonds’ money box—a man whose duties were:
… to transfer money at the request of the Bond family from various Swiss bank accounts held by the Bond company. If the defendant (Susanne Bond) or myself required money at any given time Mr Bollag would be contacted and money would appear from Switzerland.4
Leone’s description of Kirk Holdings and Siren Company was no less damning. These, he told the court, were ‘none other than Mr Bond’s creative manoeuvrings’. Or to be even more blunt: ‘offshore holding companies of Alan Bond’s’.5
Back in 1988 when these allegations were made, it had not mattered to anyone but the taxman whether Bollag and his companies held assets for Alan Bond or not. And once Armand had accepted a settlement of $450,000, the smoke of battle had quickly died down. But in 1992 it had become a matter of huge importance to establish whether Jurg was really a man of gargantuan generosity, as Bond maintained, or took care of the Bond family millions, as Armand alleged, because if Bollag was just a front then all these millions belonged to Alan’s creditors.
By this time, however, there were many more gifts from Bollag that Bond needed to explain away, because the records of Dallhold’s art collection contained invoices and letters relating to two valuable pictures that Kirk Holdings had purchased in the 1980s, again with money from its Jersey bank account.
The first was a painting called Natives in the Eucalypt Forest by the famous Australian colonial artist John Glover, which had cost Kirk £425,000 in December 1984. The second was a portrait of the explorer Matthew Flinders, by a little-known French artist called Antoine de Toussaint Chazal, which had cost Kirk $492,000 in 1987.
In line with his absurdly generous attitude to these things, Jurg Bollag had allowed Alan Bond to ship both of them to Australia in Dallhold’s name and hang them on his office walls in Perth. And there was little doubt that there were other artworks that the beneficent Mr B had bought for Bond, because a memo from Dallhold’s managing director in December 1990 listed $10 million of Bond’s artworks as being ‘held offshore’, all of which had gone missing by the time he went bankrupt.
Bond himself had sworn an affidavit in the New Jersey divorce proceedings to counter what he called the ‘outrageous lies’ being told about him and to hose down suggestions that he might be evading tax through these Jersey companies, and in particular he had tried to minimise Bollag’s role. According to Alan’s sworn evidence, Jurg Bollag was simply ‘the manager of an investment company in Switzerland and an independent adviser on international management and finance’. Bollag, he emphasised, was certainly ‘not an employee of mine or any of the companies in which I own an interest’.6
But as with the horses and the paintings, it seems that Bond was again not telling the truth. Alan’s former personal assistant, David Michael, who worked for Bond from 1985 to 1988, is adamant that Bollag’s number was in the Bond Group’s internal telephone book. And he is absolutely sure that Bollag was also on the payroll. Michael says he saw the letter of engagement in 1987 and remembers it vividly, because he was angry that Bollag was being paid so much. As he recalls it, the contract promised Bollag a Mercedes in Switzerland plus a salary of $250,000 a year. But, most significant of all, Michael recalls that it specified Bollag’s duties, which were to manage Bond’s personal financial affairs outside Australia. As a result, Bollag was sometimes referred to by the inner circle as Bondy’s private banker.
Simon Farrell, who was Alan’s executive assistant for several years, told Ramsay on oath in 1993 that he met Bollag many times in London at the two houses owned by the Bond Group in Belgrave Mews. ‘If Alan was in England,’ said Farrell, ‘Jurg would more than often come and see him.’ He added that, ‘Alan put a great deal of weight in Jurg’s advice to him. He thought he was very clever’. But Farrell was absolutely adamant that Bollag never did business with Bond Corporation. So did he do business with Bond on a private basis when he made these visits, he was asked? Yes, said Farrell, he assumed that he did.7
In 1994, Bond was examined on oath in the Federal Court by Francis Douglas QC, who asked him whether he could think of any reason why Jurg Bollag should pay $600,000 worth of legal fees that Alan had run up:
Bond:
Yes, because he’s a friend. I asked him to help.
Douglas:
Even though these fees amount to hundreds of thousands of dollars?
Bond:
Yes.
Douglas:
He is that good a friend is he?
Bond:
Yes.8
Bond also offered the explanation that Bollag had been his business partner in the Queensland Nickel Project, and stood to get a lot of money back if the nickel mine and its refinery could be prised from the jaws of the so-called SULA banks that had made Bond bankrupt.9
But this only dug Bond in deeper, because the story revealed yet another connection between him and Bollag that only made sense if it was Alan’s money that Jurg was looking after.
The Queensland Nickel Project was often described by Bond as the best deal he ever did, yet he only fell into it by accident in 1983, when he bought a controlling share in a company called Mid-East Minerals, which he wanted for its gold mines.
The project comprised a huge mine at Greenvale in north Queensland, a refinery at Yabulu, and a rail link to the port at Townsville. But by the mid-1980s it had fallen into desperate straits, because the nickel price had plummeted, and it had racked up debts of $800 million on which it could no longer pay interest.
Bond’s brilliant idea was to persuade the banks who had lent the money to sell him their debts for just 6 cents in the dollar. And he had then borrowed $50 million from another bank, Standard Chartered, to do the deal.
The terms of the agreement stated that Standard Chartered had the right to receive all cash flows from the nickel project up to the point where its $50 million had been repaid, after which the money would flow into Bond’s private companies. But for some extraordinary reason, Alan had agreed to surrender his rights to this future cash flow to an offshore company fronted by his old friend Jurg for next to nothing.
As Bond revealed to the Federal Court in November 1991, Bollag’s Metal Traders had been granted an option to acquire all the debts of the nickel project once Standard Chartered had been repaid, which would have the effect of diverting all the cash, tax-free, to the Isle of Man.
This option was going to cost just $3 million to exercise, but as Bond told the court, it could be worth as much as $700 million, because when the nickel price was high in the late 1980s, the project had been extremely profitable.
So why on earth had Bond given away such a hugely valuable asset? As usual, there was only one answer that made any sort of sense, and that was that Jurg was just acting as a front man for Alan Bond.10
Remarkably, Bond would go some way to admitting this in December 1994, when he told the West Australian’s Mark Drummond: ‘There was to be a deal. It had been verbally agreed—it was never documented—that the benefits of the option deal would be shared between Bollag and myself in an offshore structure to be put together. And it would have been an offshore structure. There’s no question about that. It was all offshore and we were going to make a lot of money out of it’.11
But it was most unlikely that Bollag would have received any of the money himself. Dallhold records show that Bond wrote in January 1991 to his friend Graham Ferguson Lacey to suggest that he find US$185 million to buy out the SULA banks. The letter proposed that Lacey could have a 51 per cent share of the nickel mine, with Bollag holding either 21 per cent or 36 per cent, as Bond’s letter put it: ‘On my behalf’12 (emphasis added).
Neither the original option deal nor the proposed arrangement with Lacey ever became reality, but each showed how Bond might have sent money offshore by the truckload without the taxman or anyone else finding out. If the Australian Taxation Office had tried looking in the Isle of Man they would have found no evidence to link Metal Traders to Bond, for its nominal owners were two obscure Jersey companies called Langtry Trust and Langtry Consultants.
In the late 1980s, Bond often boasted to people about all the money he had stashed offshore and how he would never be poor. One of those who has testified to this is the ex-chief executive of Bond Corporation in the UK, an Australian called John Richardson.13
Another is Bungo Ishizaki, the public face of a Japanese property developer EIE International, who did a lot of business with Bond in the 1980s. Ishizaki revealed in 1995 that Bond had offered to show him how to set up a family trust in Switzerland, and told him it would be completely safe from anybody who came after the money. ‘They can’t touch you,’ Bond confidently assured him.14
But if it was indeed Bond’s money that Bollag was looking after, as the evidence overwhelmingly suggested, how much was still around for creditors to chase, and was it now in assets or cash?
Part of the answer to this was in the English countryside, where John Lord, the liquidator of Alan’s master private company Dallhold, which had gone bust in July 1991, was fighting for possession of a valuable stately home.