November 16, 2005

On the run

Abe Goldberg has gone to ground since last week's astonishing expose. Now Polish authorities are determined to see that justice is done. By Alan Deans, Preston Smith and Eric Ellis

THE WORLD is suddenly a much smaller place for Abe Goldberg. Australian authorities finally are taking renewed interest in our last major corporate fugitive, who has been on the run for 15 years and faces numerous fraud and dishonesty charges after the $1.5bn collapse of his Linter textiles group.

This after The Bulletin revealed last week in an exclusive interview that despite being aged 76, Goldberg has built from scratch a billion-dollar property business in his native Poland. His new dealings involve several Warsaw landmark buildings and a large industrial park. He also disclosed that he had a “new” Australian passport, and couldn’t “give a damn” what Australians think of him. Events have moved quickly in the past week.

Goldberg’s passport has been withdrawn, according to a spokesman for the Minister for Foreign Affairs, Alexander Downer.

Polish prosecutors are offering to co-operate with Australia to see whether Goldberg can be prosecuted in Warsaw, circumventing a restrictive extradition treaty.

People familiar with the liquidation of Goldberg’s assets in Australia concede that it’s possible his newfound riches were seeded by millions salted away when he fled Australia in 1990. His network of foreign assets was never fully unmasked, partly because he settled with personal creditors before the courts could force disclosure of the activities of his family trusts.

Many of Goldberg’s US business ventures, which were engaged in property development, oil exploration and tyre wholesaling, went bust years before the collapse of his textile empire. He lost millions to American scamsters in dozens of separate deals, funding them with money sent from Australia (see p53).

Goldberg constructed a fantasy existence, claiming for instance that his family escaped the Nazi occupation of Poland by hiding in a cow barn. In fact, he told a US business associate that he had been detained, and showed him numbers tattooed on his arm.

The fugitive is believed to remain in Warsaw, but has not answered The Bulletin’s telephone calls. He has refused requests for interviews from other Australian journalists.

The government will not say exactly when it cancelled Goldberg’s passport, but it confirmed that in 1999 he was issued with a new one. It said there had been no reason not to: no alert had been placed on his name. This despite 17 outstanding arrest warrants issued in 1991 and 1994 for his arrest. “His passport has subsequently been cancelled,” Downer’s office says. Requests for further details were referred to the Department of Foreign Affairs, but it has not responded. Goldberg says he is a naturalised Australian and therefore retains his citizenship.

After years of inaction, the ­Australian government must consider its next move. Australia’s extradition treaty with Poland prevents their nationals from being forced to leave to face charges here. But Poland’s new Law and Justice party government says it is prepared to be flexible in ­Goldberg’s case.

Its hard-hitting new national prosecutor, Janusz Kaczmarek, told The Bulletin: “We have not been contacted by the Australian government. But he could be prosecuted by Polish courts. This is absolutely a possibility, and we are very willing to work with the Australian government on the matter.”

Kaczmarek said Australians had to seize the initiative. “We went seven years back in the past, and they have not contacted us regarding Mr Goldberg,” he said, referring to Polish newspaper reports that coincided with The Bulletin’s article.

This comment was reinforced by Maciej Kujawski, of the Warsaw District Prosecutor’s Office. He hoped the publicity would force the Australian government to make an appropriate filing starting a case against Goldberg.

Reports carried in Poland by its second-­largest daily newspaper, Rzeczpospolita, caught many there by surprise. They struck a note with the new government which has promised to get tough on corruption. Kaczmarek has a reputation as a fearless crime fighter, and has reopened many past corruption cases. He wanted to know whether the Australian authorities had contacted the new government after reading the newspaper reports.

Publicly, at least, the federal government doesn’t appear to have a strategy. Attempts to find out from the Department of Public Prosecutions were referred to Attorney-General Philip Ruddock’s office. From there, we were directed to Justice Minister Chris Ellison, and then to Treasurer Peter Costello, where we were told to contact the Australian Securities and Investment Commission. ASIC did not respond with any information before our deadline.

ASIC is unlikely to be able to answer many of the questions, particularly on whether it intends to contact Polish authorities. But it might shed light on if and how Goldberg salted away money offshore.

Only passing reference was ever made during the 1980s to any of his United States or international business ventures. At one stage, Linter’s liquidators brought a court case seeking disclosure of a round-robin transaction whereby a large loan from Elders Finance was passed through many Goldberg companies. That included a US-based oil exploration company, Abeg Hydrocarbons.

At least some of the assets were held in family trusts. The Victorian government’s Insolvency and Trustee Service tried to bust open these trusts when it wound up Goldberg’s personal assets. It launched court proceedings in Israel, but creditors owed $793m accepted a settlement of just $5.1m.

One person working on that case admitted: “Anything is possible with that one. Some things could have slipped between the cracks.” Another investigator said that any money sequestered offshore would only number in the millions, “not be in the tens of millions”.

When interviewed by The Bulletin, Goldberg said he had no money after he left Australia. He was able to start up a new business in Poland only because “I had people, partners who put in money. I have dozens of people, and they would come and beg me to do it”.

Since returning to Poland, Goldberg has become prominent in the Jewish community. The Jewish Cultural Association’s website lists an Aleksander Goldberg, one of his 10 aliases, as a major donor. He is also listed as a “friend”, along with business partner Sigmund Rolat, of the Association of ­Children of the Holocaust in Poland.

Despite telling Australians that he escaped the German camps, it appears he was held prisoner. David Swan, who was employed during the 1980s sorting out Goldberg’s failed business affairs in the US, said: “He was a concentration camp survivor. He’d been in a Polish concentration camp, I think. He had the number on his arm."