Bankrupt estate of former national HSU secretary Kathy Jackson flees country with inheritence funds
The “parasitic plundering” of the Health Services Union funds has taken another bizarre twist, with the trustee of the bankrupt estate of former national secretary Kathy Jackson fleeing the country with most of the funds she had been ordered to repay to the union.
Jackson was initially lauded as a whistleblower who outlined the fraud of union officials Craig Thomson and Michael Williamson. The latter spent five years in jail for what a judge described as his “parasitic plundering of union funds for pure greed”.
But it transpired that Jackson was no better.
In August 2015, she was ordered to repay the $1.4 million she had misappropriated from the union, which she had used for international trips for her family, a Mercedes car, jewellery and an artwork.
When she received a suspended sentence for her crimes in 2020, Lloyd Williams, the national secretary of the HSU, said “she will be forever known as a dishonest criminal who stole money from low-paid health, aged care and disability workers.”
The sentencing judge remarked that Jackson’s misdeeds contributed to reputational damage to the HSU, which the court previously heard had become a byword for “corruption”.
When Jackson was ordered to repay the union more than $1 million, she declared herself bankrupt, with Paul Leroy appointed her bankruptcy trustee in May 2016.
The following year, the colourful barrister and former mayor of Woollahra, David Rofe, QC, died, leaving Jackson $2.3 million.
During the subsequent legal stoush over Rofe’s estate, the court heard that Rofe, whom Justice Geoff Lindsay described as a “contrarian controversialist” who enjoyed a “lifetime of heavy alcohol intake”, had developed a close personal relationship with Jackson, who he said was “an unlikely outsider” and a “controversial public figure.”
The court heard the introduction had come via broadcaster Alan Jones.
In 2022, the year after the court battle concluded, three payments totalling $2.31 million went into the trust account maintained by Leroy in his capacity as Jackson’s bankruptcy trustee.
“What happened next beggars belief,” said Federal Court Justice David O’Callaghan last week.
The judge recounted that Leroy “misappropriated at least $886,000” from Jackson’s estate and fled overseas, with his current whereabouts unknown. Leroy also paid himself almost $156,000 for effectively stealing Jackson’s inheritance, which should have gone to the HSU.
When the union’s solicitor made inquiries about the Rofe funds, he was told that the money had not yet arrived.
Justice O’Callaghan ordered Leroy to repay the stolen funds as well as his remuneration for managing Jackson’s bankrupt estate.
The theft from Jackson’s bankruptcy was not 60-year-old Leroy’s only alleged crime.
The inspector-general in bankruptcy last month started proceedings in the Federal Court against Leroy following extensive investigations which revealed that Leroy is alleged to have misappropriated more than $4 million from five bankrupt estates between 2021 and 2023.
The Australian Financial Security Authority (AFSA) is seeking court orders declaring that Leroy breached his duties, is not a fit and proper person to act as a bankruptcy trustee, and must repay misappropriated funds and improper remuneration.
Leroy, who was formerly the honorary consul for Belgium, worked at Hall Chadwick for 28 years before joining insolvency firm Mackay Goodwin in mid-2023. He is understood to have fled the country later that year and has not been heard of since.
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