Endow promised investors returns of up to 40 per cent in six months for lending him money to purchase what he claimed were Indian government-issued bonds.
The bonds were said to be linked to a large, ongoing government infrastructure program that is working to improve India’s rural road network. Endow said he was servicing the project as a contractor, according to documents he provided investors.
Investors, who in addition to Deloitte partners include senior executives from consulting and IT firms across Australia, told The Age and The Sydney Morning Herald they were convinced to send funds to multiple personal accounts Endow was operating across the big four banks.
“The promised returns are obviously eye-watering and should have raised major red flags,” said one source, who asked to remain anonymous because he was not authorised to give comments.
The investors said another issue was that of preferential payments, which involve early investors recouping their capital and sometimes additional interest payments at the expense of those later lured to the suspected scheme.
Investors told this masthead that they wanted to know how much Deloitte knew of Endow’s business and the extent to which it breached company policy.
Deloitte is one of the world’s biggest accounting, audit and consulting firms, and among the core services it offers clients is detecting fraud and misbehaviour at companies and government agencies. Deloitte employees must disclose their investments and business interests to avoid conflicts of interest and reputational issues.
It is unclear if the Deloitte partners who invested in Endow’s suspected scheme sought approval to do so and the extent to which any promoted the suspected scheme to others outside the firm, although two investors told this masthead they had invested because of advice provided by a Deloitte partner.
There is no suggestion any investors linked to Deloitte knew that Endow was a suspected fraudster or themselves acted illegally.
Endow lived with his wife and children in a leased Sydney apartment next to Delta Goodrem, drove a black Porsche and convinced at least 10 serving or former Deloitte partners to back his “foreign direct investment” vehicle which he named the “Endow Family Cap”.
His three-bedroom apartment, which boasts “harbour and Opera House views”, is now publicly online as available to rent.
Sources said that an initial analysis of his bank accounts revealed lavish spending on luxury items and lifestyle, including gambling.
This masthead has spoken to multiple investors, who all described their interactions with Endow on the condition of anonymity due to the sensitivity of ongoing investigations.
One prominent investor chasing funds is Rodney Eade, a former AFL champion and former coach of the Western Bulldogs, Sydney Swans and Gold Coast. He declined to comment.
One investor who dealt with Endow described him as convincing and polished.
“He was very believable,” the source said.
Investors said Endow’s pitch centred on his trusted, senior position at Deloitte along with the fact that multiple Deloitte partners were investors in his suspected scheme. One businessman said he had been advised to invest with Endow by a Deloitte partner who had vouched for the suspected scheme.
“My wife warned me it was too good to be true and I should have listened,” the investor told this masthead on Monday.
Another said: “Greed got the better of me, but I wouldn’t have invested if not for the Deloitte link.”
Endow’s LinkedIn profile says he is currently “on a short break” and looking forward to his “most challenging and exciting leadership role yet”.
Endow lured investors to his suspected scheme by promising huge returns with zero risk.
In a 2019 pitch document distributed to investors, Endow described how his family business in India was “fortunate to be 1 of the 3 selected panel contractors” on the Indian government-funded Pradhan Mantri Gram Sadak Yojana infrastructure mega-project to overhaul the nation’s rural roads network.
He claimed his family business was servicing a pipeline of work worth hundreds of millions of dollars, and needed funds from Australia to buy Indian government bonds that project contractors were required to hold to prove their financial stability.
Australian investors who gave Endow up to $50,000 were guaranteed returns of 20.12 per cent over six months, while investors who provided more than a quarter of a million dollars were guaranteed “39.02 per cent for six months”.
“The investment represents a zero-risk profile – it is simply a financial engineering instrument and the benefits of being an FDI [foreign direct investment] for a major capital program of this nature,” documents prepared by Endow and marked “confidential” state.
The leaked documents describe Endow as “personal guarantor of the invested principal and the interests”.
“In recent times, we have seen several infrastructure projects (government-led) in India going through the same process … there is a scenario where post-June 2020, we may consider the launch of a full-fledged contract financing fund here in AU (Infra Fund under AU regulation). However, currently the transacting mechanism outlined above is fit for purpose for a restricted community of investors.”
McLaughlin, commenting for Duxton Hill, said: “I can confirm we are conducting a very thorough investigation involving complex financial dealings including the transfer of funds overseas. Our investigation is continuing.”
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