Liquidators are investigating the transfer of funds from a $15 million Queensland government project to the personal bank account of Jamie Wilson, founder of Cryptoloc Holdings, within 24 hours of the funds being received. This transaction is under scrutiny as a potential “fraudulent” activity, according to a liquidator’s report.
The investigation comes after Cryptoloc Holdings, a company once celebrated for its cybersecurity solutions, won a government tender just before the state election last year. However, the contract dissolved within months, with the state pursuing the return of $1.5 million initially paid. Cryptoloc was initially touted as a secure platform for storing key documents online.
Controversial Transactions and Bankruptcy
The ABC has revealed that Jamie Wilson has filed for personal bankruptcy. He reportedly repaid $1 million to a family member before his company’s collapse, yet currently possesses only $120 in cash. Wilson’s entities have donated over $320,000 to political parties over four years, and he was known for networking with influential figures, including politicians and celebrities.
Despite the accolades and connections, Cryptoloc Holdings faced financial difficulties. An investigation by ABC in November highlighted these issues, prompting the Queensland government to liquidate the company after failing to receive satisfactory explanations from its management.
Liquidator’s Findings
Liquidator Nick Combis of Vincents has focused on the state funds, noting that Cryptoloc Holdings “never had any assets of significance until the funds it received from the Queensland state government.” Creditors are seeking $2.4 million, including $1.51 million from the state and $44,000 from a subcontractor.
“My investigations have revealed several uncommercial transactions, including the removal of funds from the company’s bank account and paid directly to the director’s bank account within twenty-four hours of funds being received from the Queensland state government,” Mr. Combis wrote.
Combis also mentioned that Wilson has “indicated that he has no assets [to] repay the funds,” suggesting that the funds may have been disbursed elsewhere. The investigation and potential tracing of these funds are ongoing.
Wilson’s Financial Struggles
Wilson has not responded to ABC’s requests for comment. However, in previous state litigation, he claimed that government funds were spent on the cybersecurity program and that Cryptoloc Holdings was working towards delivering the project successfully.
Bankruptcy documents filed last month reveal Wilson’s debts totaling $4.6 million, including $1 million owed to the Australian Taxation Office and $2.62 million to Cryptoloc Holdings. He also owes $260,000 to two businessmen and $600,000 to a family member, who received a $1 million repayment in October.
Records show Wilson paid former conservative politician Santo Santoro, a lobbyist for his business, $150,000 in the month before state funds were transferred. Wilson described this payment as a “debt collector” fee.
Political Implications and Audit
The rapid failure of the contract has raised questions about the tendering process. However, bureaucrats have refused to release over 180 pages of related documents requested by ABC under right to information laws.
Cryptoloc Technology paid $23,040 for Labor events shortly before the contract was awarded, including membership in a Queensland Labor Business Roundtable and political lunches hosted by then-premier Steven Miles and Energy Minister Mick de Brenni. A Queensland Labor spokesman stated that these donations did not influence the tender process, which was managed independently by the department.
Meanwhile, an audit into the cybersecurity tender is underway, led by Steve Minnikin, Minister for Customer Services and Open Data in the new LNP administration. The audit aims to identify potential process improvements.
This unfolding situation highlights the complexities and potential pitfalls of public-private partnerships, especially in the rapidly evolving field of cybersecurity. As investigations continue, the implications for government contracting and political donations remain significant.
