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The fallen tech titan, a suburban gangland lawyer and a $26.6m mysteryThe corporate watchdog is investigating what happened to $75 million of an ASX-listed company’s cash amid allegations it was moved into a suburban law firm’s trust account. At the centre of the investigation are two men – a gangland lawyer and a charming tech executive – and a long list of surprising connections.
By Sarah Danckert and Carla JaegerJune 14, 2024
Lawyer Mark Madafferi looks like a man under pressure as he walks into the North Melbourne office of his law firm, Christopher William Legal, which has served some of Australia’s most infamous criminals and underworld associates.The lean 67-year-old is under investigation by the corporate watchdog into how nearly $75 million was allegedly moved from the bank account of ASX-listed voice recording technology company Dubber to the trust account of his law firm.Dubber’s clients include some of the biggest telcos in the country. At last year’s Australian Grand Prix, it showed off F1 star Oscar Piastri as a brand ambassador.But the company’s recently sacked CEO Steve McGovern – a typical sneaker-wearing “tech bro” in his late 50s with a disarming Manchester brogue – is also under investigation by the Australian Securities and Investments Commission (ASIC).Dubber suspended its chief executive Steve McGovern, while ASIC succeeded in obtaining travel restraint orders.Dubber suspended its chief executive Steve McGovern, while ASIC succeeded in obtaining travel restraint orders.The regulator and the company allege that vast sums of Dubber’s cash – raised from shareholders around Australia – was used between 2018 and 2024 to provide short-term loans to Madafferi’s often colourful clients.Nearly $27 million of the Dubber cash placed into the trust account remains outstanding, the company alleges. Shareholders – including billionaire Alex Waislitz and the company’s board, led by Victoria Racing Club chairman Neil Wilson – thought the money was in a bank term deposit until the issue was discovered during a regular half-year audit.The allegations have again shone a light on the use of the shadowy lending vehicles operating in suburban law firms that promise privacy and higher returns to investors.Details of Madafferi’s lending business are of keen interest to ASIC investigators and forensic accountants hired by Dubber, who say they have already identified at least one alleged transfer to an underworld figure, according to a source familiar with the investigation but not authorised to speak as it remains ongoing.While McGovern’s sacking was widely covered in the financial press, little has been written about his background, including his long relationship with Madafferi.An investigation by this masthead can reveal that Madafferi has provided legal services to some of Melbourne’s most well-known gangland identities, including convicted killers and drug dealers, according to documents, Gobbo royal commission informant reports and property titles.Madafferi has also had a long association with Dubber, helping to arrange loans for the business and as a foundation investor in its 2015 float.This masthead is not suggesting the ASIC and Dubber investigation indicates any wrongdoing by Madafferi or McGovern, just that the inquiry is occurring. It is also not clear what representations McGovern made to Madafferi.Ultimately, ASIC’s investigation could lead to no formal allegations being made against either man. Both have been assisting the inquiries. Dubber has also claimed it understands the Victorian Legal Services Board is also investigating the matter.Through his lawyer, Madafferi declined to comment for this article. McGovern did not respond to inquiries.The client listBefore it was known as Christopher William Legal, Madafferi’s North Melbourne office was home to a law firm with a deep and quiet reputation – Chiodo Madafferi.Chiodo Madafferi was set up in 1989 and brought together top criminal lawyer Cosimo Chiodo and Madafferi, who specialised in civil legal matters such as property disputes, family law, business restructuring and conveyancing.Chiodo, who died in 2017, regularly instructed Nicola Gobbo, then one of the state’s finest and now one of its most controversial barristers. Chiodo represented a host of gangland identities and associates, including drug dealers Fadi Sarkis and Pasquale Barbaro. Another client was Renate Mokbel, the sister of drug baron Tony Mokbel who absconded to Greece in 2006.Madafferi’s client list was as noteworthy as his partner’s.Over a 44-year career, it has included convicted murderer Eris Censori, who recently became the uncle-by-marriage of rap superstar Kanye West. Censori is on parole after his death sentence for a gangland killing in the early 1980s was commuted to life in jail and he was released in 1994.Censori was Madafferi’s client for over 14 years, until 2013, on a range of business dealings, including advising on a large volume of loan transactions, providing conveyancing services and handling Censori’s separation from his domestic partner.Eris Censori in 1991, before he became a client of Mark Madafferi.Eris Censori in 1991, before he became a client of Mark Madafferi.Another client of Madafferi was Michael Barbaro. The Melbourne-based 64-year-old was sentenced to eight years’ jail in 2023 for heading a major methamphetamine syndicate.Madafferi also provided legal services to gangland figure Arthur Vouthas – the right-hand man of convicted drug dealer Rocco Arico - in a debt dispute.Other Madafferi clients include Mick Gatto and confidant and banned gambler John Khoury, who Madafferi assisted in conveyancing matters and setting up a $1.5 million bridging loan to a Melbourne property developer.Madafferi also provided legal services to Gatto associate and one-time Purana taskforce target and accused Mokbel money launderer Tom Karas. Karas has never been formally charged with any offence and has long denied any wrongdoing.Charles Pellegrino, a Melbourne businessman with an interest in share trading and an acquaintance of Khoury and colourful ASX investor Leo ‘the Gun’ Khouri, is another Madafferi business associate.Madafferi has also represented less well-known clients from all walks of life, including divorcees, small business owners and businesspeople including McGovern. He even represented a private lender at the High Court of Australia against allegations of unconscionable conduct. While Madafferi’s client lost the case, it was a feather in the cap of the suburban solicitor.In around 2010 Madafferi added a new line of work to his already impressive line of legal services: helping new businesses get funding.One of the start-ups Madafferi assisted was Dubber.Dubber’s 2013 annual accounts filed with ASIC show it had a $94,000 loan – 70 per cent of its borrowings – listed as from “Chiodo Madafferi Pasqual”.Madafferi was also an investor in the business via an entity called Medulla, which counted Dubber’s founders as co-investors.After Dubber’s 2015 float, Madafferi’s entity Madchi Pty Ltd (also known as Madachi Pty Ltd in Dubber documents) held 1 per cent of the company’s stock. Madafferi remained a top 20 shareholder until 2018.Dubber seemed like a good investment for Madafferi, given its strong prospects and his good relationship with McGovern – a charming leader with an everyman northern English accent, big hands and big ideas.The charming tech broWith a law degree under his belt and sales experience working for Murdoch-owned British broadcaster Sky TV, the now 59-year-old McGovern arrived in Australia in the mid-1990s and soon found himself working on the national launch of the Foxtel network.He then branched into internet and telco businesses as the dot-com boom took off, including as chief executive of the My1300 Group and an executive at Benchmark Sales and Affinity Telecoms.Steve McGovern explains Dubber’s technology.Steve McGovern explains Dubber’s technology. Credit: LinkedInIn 2011, McGovern struck gold with Dubber. The low-cost cloud recording technology provider and data harvester would go on to list on the ASX in 2015 and pick up clients that included some of the world’s most notable telco companies: Optus, AT&T, Telstra, Cisco and Microsoft.“We get carriers to connect their networks to our single global platform, and then we capture the data at scale – every single call from any user on that network, for any purpose – we can capture [and] turn into usable data,” he said in 2022.As Dubber’s business grew, so did McGovern’s assets: purchasing a Collingwood apartment in 2013 to add to his property in Warrandyte, his Aston Martins and a beach house on the Mornington Peninsula.Along the way he built a largely positive reputation at Dubber, according to five current and former employees who asked not to be named due to concerns about the corporate watchdog’s investigation.“He was just a lovely guy to work for and with. He was a really kind, caring, empathetic, tough but fair leader,” said one former executive, who left the company over leadership concerns unrelated to McGovern. Another former employee who worked closely with McGovern was equally floored about the allegations: “The man I knew would never steal.”The savvy technology executive has also successfully batted away legal problems in the past, perhaps indicating how he will resolve this latest issue with ASIC.This masthead can reveal that in 2016, McGovern was criminally charged with 12 counts of refusing or failing to provide information under tax law following an Australian Taxation Office review. All charges were struck out in 2018 and the ATO was ordered to pay McGovern’s legal costs.Back at Dubber’s offices in the Melbourne CBD, it is still working through a reckoning that would have culled many other companies.A troubled pastDubber, according to its website, was born at a casual gathering of friends including McGovern in around 2011 after Optus had been ordered by the consumer watchdog to record all in-bound call centre traffic.Within four years, the group listed on the ASX, but it wasn’t long before an event happened that, if publicly known, would have tarnished the group’s reputation.In February 2016, long-time Dubber director and McGovern associate Gavin Campion stepped down citing “personal issues”.What shareholders didn’t know was that those personal issues related to a major investigation by US authorities into sham contracts used to pump up the share price of a separate US-listed company.But according to a high-level company source, though shareholders didn’t know, Campion had been entirely forthcoming with the company. On June 30, 2016, Campion pleaded guilty and was banned from being an officer or director of any share issuing entity.Campion told this masthead he has put the matter behind him and that court records showed he never devised or knowingly assisted the fraud, but his attempts to report the matter to his superiors were seen as inadequate by US authorities.F1 star Oscar Piastri in 2023 Dubber promo videoF1 star Oscar Piastri in 2023 Dubber promo video1:16F1 star Oscar Piastri in 2023 Dubber promo videoMcLaren driver Oscar Piastri and then-Dubber boss Steve McGovern hurl around Albert Park Lake in papaya-orange McLaren for 2023 promo video.The next threat to Dubber’s reputation didn’t come until several years later – and this time it had a serious impact.In October 2022, Dubber’s auditors identified an accounting bungle that left a $18.5 million hole in its balance sheet. That hole led to a 25 per cent share plunge and the resignation of then-chief financial officer Peter Curigliano. Curigliano declined to comment for this story.But McGovern ploughed on, trying to lift Dubber to the next level.Dubber brought in Neil Wilson as board chairman in early 2023 as part of a plan to elevate the business in corporate circles, according to a senior executive who asked not to be named to speak freely.A year later, Dubber identified $27 million of cash as outstanding and suddenly that plan was in disarray.Wilson is now overseeing a review of the business by external investigators.As part of the review, all contracts have been assessed and been found to be legitimate, according to a senior company source not authorised to speak on the record. The senior source said staff have also been interviewed to find out if any knew of the alleged cash move by McGovern – so far nothing has turned up.The corporate watchdog is expected to conduct interviews with key personnel as part of its investigation, according to another source familiar with the interview process but not permitted to speak on the record.Some shareholders believe Dubber will recover from the scandal despite serious questions about its governance, oversight and the quality of its previously audited accounts.Waislitz is one of those supporters. In May, the company raised $24 million in new cash from investors, including a large contribution from the rich lister, who had already provided an emergency $5 million bridging loan to the company.Dubber chairman Neil Wilson is overseeing a review of the company’s cash issues that is being conducted by an external accounting firm.Dubber chairman Neil Wilson is overseeing a review of the company’s cash issues that is being conducted by an external accounting firm. Credit: GettyWaislitz and his investment house, Thorney Technologies, said at the time: “Unquestionably we were shocked by Dubber’s recent announcement. Notwithstanding, Thorney continues to believe Dubber has sound prospects, having built a substantial global client base.”Dubber was sent a series of detailed questions by this masthead, including questions about Campion and McGovern’s tax issues. A spokesperson for Dubber said: “The board of Dubber is committed to the highest standards of corporate governance and improving the performance of the business. Given certain matters are currently subject to multiple investigations, it would be inappropriate to comment further.”Dubber is considering recouping the funds through legal claims, including against Madafferi, McGovern, Christopher William Legal and the Victorian Fidelity Fund, which compensates losses caused by allegedly fraudulent behaviour of a lawyer. This masthead does not suggest such claims would succeed.Back in North Melbourne, Madafferi is in wind-down mode. The stately building that housed his firm was quietly placed on the market last month, for offers over $2 million.At McGovern’s home in Warrandyte, two caveats were placed on the property by Madafferi clients two weeks before the Dubber cash issue was discovered. One of the caveats was from a private company who, when contacted, said the debt was related to a loan from business associate Mo Abou-Eid.Abou-Eid, who is mentioned in passing in Gobbo’s informant reports as an acquaintance of Gatto’s, told this masthead the caveat related to a “private matter” between himself and McGovern.
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