Nine years after apparently reaching a deal with the ATO, a wealthy Sydney family is being pursued by a liquidator over millions of dollars in funds he believes were hidden abroad.
Almost nine years after agreeing to settle a war with the tax office, the Binetter family that made its fortune from Nudie Juice is being pursued overseas by an Adelaide liquidator over his suspicions cash has been hidden.
Two of the Binetter brothers, Michael and Andrew, have blocked attempts by the liquidator seeking to examine them. Michael has attempted to stay silent to avoid self-incrimination 250 times – pleading the fifth amendment to a United States component of the litigation.
Andrew had surgery to treat a brain tumour.
Liquidator John Sheahan says there are still millions of dollars unaccounted for. The Binetters say Mr Sheahan should give up the chase.
Mr Sheahan is now pursuing Andrew and Michael, the sons of Erwin Binetter, alleging they transferred millions offshore in the lead-up to a deal struck between the Binetters and the Australian Taxation Office. He estimates $150m is at stake.
Erwin and Emil Binetter, also brothers, were born in 1920s Slovakia and migrated to Australia after World War II, fleeing persecution that killed many members of their Jewish family.
They set up a series of successful companies in Australia, including the well-known Nudie Juice operation which was bought in 2015 by Philippines-based Monde Nissin Corporation for about $82m. The proceeds of the sale of Nudie were taken by liquidators. Why? Because the Binetter family for all its success drew upon a convoluted back-to-back loan scheme.
These loans, it was alleged by the ATO, were not real lending. Instead, the ATO claimed interest was minimal or lacking entirely, and Israeli banks took on a fee for service. The Binetter companies could allegedly claim the interest paid on the loans as a tax deduction, thereby slashing their own Australian tax bills.
Former Nudie Juice boss Andrew Binetter, far right. Image: Flickr By 2015, the ATO sued the Binetters, Andrew and Michael among them, alleging they ran a tax-avoidance scheme. In 2018 the family agreed to settle for $45m.
Mr Sheahan was appointed liquidator of the Binetter companies. In 2021, he sued. Mr Sheahan claimed the late Emil and Gerda Binetter, son Gary, and their other children had sent $23m to Lichtenstein in 2013. And that in 2014, Erwin’s children, Michael and Andrew,
left Australia for the United States.
Mr Sheahan has also sued Bank of Queensland and extracted a settlement over the role of its private-client business in the scheme. He claimed BOQ had assisted the family, and failed to carry out its know-your-customer controls.
But Mr Sheahan expects more.
He told The Australian legal action in the US and Australia is designed to realise nearly $150m “still owed” to the ATO. Over the years, Mr Sheahan has extracted $210m from Binetter companies.
He said the tax office was “regularly provided with detailed reports on those investigations and continues to support my efforts in that regard”.
“I note that those investigations in the United States have been opposed by the Binetters and observe that at every step their applications have been unsuccessful in the American courts,” Mr Sheahan said.
Nudie Juice operation was bought in 2015 by Philippines-based Monde Nissin Corporation. “If the Binetters were genuinely concerned about ensuring no further diminution of any companies’ resources, I invite them to start co-operating with me in those investigations rather than seeking to obstruct and delay me.”
Two years ago, the Federal Court found a key company associated with the Binetters had fraudulently won a fight with the ATO almost 12 years earlier, leaving it with a $3.65m bill.
Justice Melissa Perry found Andrew Binetter “gave patently false evidence” in the trial and later appeal.
The pursuit has also split the family. A third brother, Ron Binetter, and wife Deborah Huber gave evidence against Michael Binetter in one case. (Ron was not one of the brothers targeted by the ATO).
Ron was cut out of his mother’s will. They gave evidence that Michael had asked Ms Huber to translate the Hebrew in a meeting they had in Israel, where the alleged back-to-back loan scheme was discussed.
The Binetter family has largely left Australia but cannot escape the tax fight.
Andrew Binetter, who ran Nudie, is in Puerto Rico. His brother, Michael, is in New York.
Mr Sheahan said it was necessary to crack open the peace deal and reopen the case against the Binetter brothers because of new evidence showing they had used foreign companies to hide assets and avoid tax.
But the tactics used by Mr Sheahan in his US pursuit have angered the Binetter family, who claim he reneged on the critical peace deal inked with the ATO in 2014. They claim the liquidator lodged papers to tear up the deal on the final day covered by the deed, plunging the Binetters back into years of tax disputes.
Andrew Binetter has also been dealing with deteriorating health, and sources close to the family say he has undergone surgery and treatment for his brain tumour.
A spokeswoman for the Binetters said: “It is eight years since a comprehensive settlement was reached with the knowledge and participation of the Australian Taxation Office.
“Now, we have only questions – why file new proceedings on the last day of the limitation period? Why delay serving those proceedings for five more months? Why lodge new, broad discovery motions in the US?”
She questioned whether the ATO was “comfortable with the millions in liquidator fees and disbursements plus extensive legal costs being incurred each year?”
“Ultimately, who are these actions serving?” she asked.
Mr Sheahan served subpoenas on Michael Binetter, Andrew Binetter and his wife Samantha Kelliher. But Michael and Andrew have resisted Mr Sheahan’s campaign by trying to have the examinations set aside.
Both sides have spent millions on legal fees; Mr Sheahan has newly changed his legal team to Ashurst.
In Australia, the Federal Court has ordered companies related to the liquidation to pay $720,000 as security for Andrew Binetter and Samantha Kelliher’s costs.
A federal bankruptcy court judge in New York found Michael Binetter was not entitled to make his sweeping claims against self incrimination, setting the stage for a new round of examinations.
Since relocating to the US, Andrew Binetter has established a pre-cooked dining operation: Nate’s Fine Foods.
Mr Sheahan told a federal court in California how he thought Nate’s had “relevant ties to the Binetters’ tax scheme”.
Mr Sheahan said the resources being used on the Binetter matter were “not only reasonable, commercial and in the best interests of creditors but is, in fact, imperative to maximising returns in the administrations”.
“To date, my administration of this group has generated in excess of $200m for creditors, nearly all of which was recovered from legal proceedings,” he said.
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David Ross is a Sydney-based journalist at The Australian. He previously worked at the European Parliament and as a freelance journalist, writing for many publications including Myanmar Business Today where he was an Australian correspondent. He has a Masters in Journalism from The University of Melbourne.
