A man accused of running a $100 million Ponzi scheme through an Ivanhoe law firm told his wife that if anything happened to him, there would be a folder in his office that explained “everything”.
The contents of that folder are now at the centre of an investigation by liquidators into the now-notorious scheme operated by John Adams and uncovered after his sudden death in late 2023.
The liquidators are holding public examinations as part of their inquiry into the scheme that included as investors a who’s who of Melbourne’s wealthy, including former Carlton Football Club president Ian Collins and several racing industry figures.
Chris Adams, one of John Adams’ sons, told the public examinations he was given a folder of documents by his brother Nick after his brother’s clandestine visit to the law firm’s office when their father died. Neither brother has been accused of any wrongdoing.
Chris Adams said the folder he received from his brother included only a one-page sheet with account numbers and company names, and instructions for his father’s legal clients.
Counsel for the liquidators Christopher Brown, KC, quizzed Chris Adams about whether there were other documents in the folder.
“Your mum gave evidence that your father had said to her prior to his death that if anything happens to him, there’s a folder in his office that will explain everything. Are you aware of this?” Brown asked.
Adams replied: “I am now. I was not then.”
Adams said he became aware of the instructions only when his brother Nick gave him the folder.
Brown then asked: “Is that the reason Nick went in on the Sunday was to extract that folder?”
Adams added: “That is my understanding now.”
Brown asked: “And you’re saying there’s nothing else in that folder that related to the mortgage scheme?”
“That’s correct,” Adams said.
Adams told the court he was also given several bank statements by Shane Maguire, John Adams’ business partner at AMS Ivanhoe Lawyers, about three days after his father’s death.
The statements related to an AMS bank account that listed as its address a post office box in Lorne, not far from the Adams’ expansive family beach house in Big Hill.
Maguire told the Federal Court last week that he had discovered Nick Adams at the firm’s office the day after John Adams’ death looking through files. He told the court he immediately asked him to leave.
Maguire, who insists he knew nothing about the Ponzi scheme and thought Adams had wound down the mortgage fund in 2013, said he later found a cache of documents in a cabinet in his business partner’s office that appeared to relate to the scheme.
Maguire told Chris Adams that those documents showed his father had been registering mortgages over people’s homes without their knowledge or permission.
Chris Adams told the court he had examined those bank statements and determined his father had been operating a Ponzi scheme.
When asked why he thought that, Adams replied: “There was a lot of money coming in and going out for interest, and then just annualising a year’s worth [of interest payments], annualising a month into a year, it gave you a fair idea.”
“Money was going out to other places. Or on interest,” Adams said, adding the flow of cash was “all over the place”.
He said that and the unusual mortgage registrations had led him to believe his father had been running a Ponzi scheme.
Chris Adams later told the court that more documents had been handed over to him by his father’s secretaries when they were clearing out the firm’s office.
Brown asked him why he had not handed these up as part of his summons, to which he replied: “I thought my brother had.”
Other items, such as a laptop used by John Adams, could still be in the hands of investigators from the Legal Services Commissioner, the court heard.
Nick Adams is due to give evidence at a later date.
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