Story republished, courtesy of Australian Financial Review, written by DAVID MARIN-GUZMAN
THE heads of labour hire firms who supplied a major construction subcontractor while failing to pay tens of millions of dollars in taxes have broken down in tears in court, claiming they were set up as “the fall guy”, had their lives ruined or even considered suicide.
Three directors alleged in liquidator examinations that prominent horse racing identity Gerhard “Hoss” Heinrich, the former boss of Queensland’s biggest formwork subcontractor, recruited them to head his companies for $300 a week, even though they had little to do with the businesses.
The firms exclusively supplied Heinrich Constructions with workers for a decade but failed to pay tens of millions of dollars in pay-as-you-go tax, collapsing one after the other as the Australian Tax Office caught up with them.
Hoss has since declared bankruptcy after a court order for him to pay $10 million in taxes. However, the brand of his formwork business lives on under his horse trainer wife, Gillian, and is winning major work in Queensland.
Top-tier builder John Holland engaged new entity Heinrich Constructions Australia on the taxpayer-funded Logan Hospital last year and on a five-year job for Dexus’ $2.5 billion redevelopment of Brisbane’s waterfront.
But liquidators are still investigating the collapsed companies to recover $53 million in tax debts, and over the past week summoned the Heinrichs and the labour hire directors to the Federal Court for a grilling.
The labour hire directors included a close family friend, an undischarged bankrupt – who was made director just as he was struggling to rebuild his life after a miraculous revival from a suicide attempt – and Hoss’ sister.
“He’s my ex-brother as far as I’m concerned,” said Helga Bennett, a logistics manager who was left with a $5 million tax debt.
Bennett was in tears on the witness stand, saying she “just believed my brother” when he allegedly asked her “out of the blue” to be a director and promised her: “I’ll look after it all”.
She has since been forced to sell her home and has cut off contact with her brother, who she previously looked up to.
“The whole last seven years have absolutely ruined me,” Bennett said. “I’m going to be 67 years old and I’m still going to have to work now because I don’t have anywhere to live if I don’t work … I don’t have anything and I will go bankrupt because I have no alternative.”
Cameron Leonard, who knew Hoss from high school, said he had no knowledge of the business he alleged Hoss recruited him for as director on a promise of $300 a week.
“I’d say I was the fall guy,” Leonard said, when asked if it was odd that he was getting paid to head a firm he was entirely uninvolved in.
Leonard, who still works as a yard manager for Heinrich Constructions and attended Hoss’ daughter’s birthday party in May, said he had been forced into bankruptcy in part due to the tax debt accrued by the firm.
Steve Jones, who once supplied feed to Heinrich’s 60 thoroughbred horses, said Hoss asked him to be a director for $1000 a week in 2023.
At the time, he said, he had been struggling with medical expenses after he was revived on the operating table 48 hours after “committing suicide” and later awoke from an 11-day coma.
He was appointed as a labour hire director despite allegedly advising Hoss that he was an undischarged bankrupt at the time.
A year later, after rebuilding his life, Jones said he was handed a $2.6 million tax bill that “completely shocked” him.
“Besides going into the foetal position, I called Hoss saying ‘what the hell’s going on, what have you got me into here’,” he said.
Hoss told him to “calm the farm”, he said, and got to him sign various documents. “I said, ‘Hoss you’re stressing me out, I may as well go find another bit of rope’.”
The court also heard evidence from Hoss’ former executive assistant, Joanne Himberg, that the labour hire firms’ invoices and payslips were issued from the same office as Heinrich Constructions.
Himberg was in tears when she gave evidence that she quit over alleged bullying by Hoss and because she struggled with his alleged use of the labour hire firms.
“I had a hard time dealing with what he was doing – all his companies,” she said.
“Even though they were people [labour hire directors] that were close to him and agreeable to do it, I don’t think it was right.”
‘Do you want me to get divorced?’
Giving his own evidence, Hoss claimed ignorance to why he structured the employment of workers through separate labour hire firms.
“Possibly I’d listened to my young lawyers or accountants,” he said. “I’m not the sharpest tool in the shed.”
He said Leonard’s description of him as the fall guy was “up to him” but noted that “he didn’t give the money back”. However, he denied that he really ran the labour hire businesses.
“Disagree totally. You’re barking up the wrong tree there, brother.”
Asked why he did not split off Heinrich Construction’s horse business – which generated $25 million in losses over six years – when the company’s otherwise profitable construction side went through a tough year in the pandemic, Hoss replied loudly: “Do you want me to get divorced?”
He agreed he had kept the bloodstock business for the sake of his marriage. “That’s not a bad reason is it?”
Heinrich Constructions Australia director Gillian Heinrich said she could recall she owned a house in Italy but not how much it cost.
Gillian Heinrich, who was not a director of Heinrich’s previous formwork businesses, was struck by serious memory loss during her examination, which she blamed on “being ‘chemoed’ to death over the last 10 years”.
Asked if her husband was a big gambler before he went bankrupt, if she had an overseas bank account or whether she owned any horses, she repeatedly replied: “Can’t recall.”
She did remember she had bought a property in northern Italy in the last year or two, by the country’s largest lake, Lake Garda.
She could not recall how much it cost or whether it was mortgaged.
The couple’s daughter, Tayla Heinrich, a director of one of the labour hire firms that collapsed owing $3.3 million in taxes, previously gave evidence denying that she failed to charge enough to pay taxes.
