Former directors' assets frozen amid fake GST refunds probe linked to pubs and hotels
The Federal Court has frozen the assets of former Virtical directors John Palasty and Mark Toma as investigations continue into alleged fraudulent Goods and Services Tax (GST) refunds amounting to hundreds of millions of dollars. The two men are accused of claiming refunds for construction projects that never took place, linked to the development of high-profile pubs and hotels.
Liquidator Peter Krejci of BRI Ferrier secured court orders preventing Palasty and Toma from dealing with assets worth up to A$52.2 million. Palasty’s wife is also subject to a freezing order of up to A$2 million, while Toma’s lending vehicle, Bond Global Capital, has been placed into receivership for further investigation. The court has granted both men limited exemptions, allowing A$5000 per week for living expenses and A$10,000 for legal costs until March 2025.
The Australian Taxation Office (ATO) began investigating Virtical and its subsidiaries last year over more than A$100 million in GST refunds for non-existent construction projects. Tax audits and administrator reports show that nine Virtical companies were fined A$27 million for submitting false claims. Collectively, these entities owe the ATO over A$50 million, with additional claims still under investigation across Virtical’s broader network of 20 companies.
Virtical made headlines in 2023 with a rapid expansion, spending A$125 million on hospitality venues in Sydney and Melbourne. Its acquisitions included Sydney’s Republic Hotel (A$40 million) and Melbourne’s Adelphi Hotel (A$25 million). However, the company collapsed after media reports exposed financial irregularities, leading key lender Bond Finance to put venues into administration over A$91 million in overdue loans.
Palasty, a twice-bankrupt businessman, was discharged from his second bankruptcy in February 2023. Three months later, a company in his wife’s name purchased a A$2.25 million luxury home in Sydney. Toma, who claimed to have made A$45 million from selling Virtical shares, currently resides in a A$3.9 million estate featuring a spa, sauna, gym, and tennis court.
BRI Ferrier is set to conduct four days of examinations into individuals connected to the collapsed companies, beginning on March 24.
Jonathan Jackson, 19th March 2025
