Sean Carolan: Seeking return of the money.

Sean Carolan: Seeking return of the money. Photo: Janie Barrett

A police investigation to find the owner of a $702,000 bag of cash has revealed that well-known concert promoter Andrew McManus has been avoiding tax, paying footballers under the table, using convicted drug dealers to deliver large sums of cash, withholding funds from bands including Fleetwood Mac and borrowing money from establishment figures such as Michael Kroger and David Lowy.

NSW police received an anonymous tip off on August 11, 2011, that the man staying in room 3026 in Sydney's swanky Hilton hotel had a gun. When they stopped former cage fighter turned personal trainer Sean Carolan in the foyer, instead of a gun they found $702,000 in cash in his suitcase.

Fairfax Media revealed last year that Mr Carolan had conducted blood tests on Sydney Roosters players earlier that year. The results of those tests, which indicated several players had elevated levels of human growth hormone, were later found on the phone of an organised crime figure.

Andrew McManus: Melbourne promoter.

Andrew McManus: Melbourne promoter.

Mr Carolan has taken legal action in the NSW Supreme Court to have the seized money returned. Documents tendered in the case reveal that Mr McManus told police in April 2012 that the $702,000 cash had come from him and was to repay an American, Owen Hanson jnr, who had allegedly stumped up the deposit for a tour of American band ZZ Top.

"It's my 700 large," Mr McManus told the police. He said the money was delivered to Mr Hanson by Mr McManus' right-hand man, who he was reluctant to identify. "He’s like my brother," he told police.

He was referring to Craig Haeusler, a major organised crime figure who was released from jail in 2003 after a five-year sentence for running a major methylamphetamine network.

During his police interview, Mr McManus made extraordinary admissions. The promoter said he had been "under suspicion by the NRL for making player payments to rugby league players".

He was referring to the Melbourne Storm salary cap scandal in which his company was used to channel illegal payments to players.

Mr McManus told the police that the Australian Taxation Office had fined him $120,000 per Storm player, "which totalled $2.4 million … it crushed my company Andrew McManus Presents International".

During his turbulent career, in which he had a bankruptcy annulled, Mr McManus brought acts such as Fleetwood Mac, Luciano Pavarotti and the Who to Australia. After the Storm scandal, a string of Mr McManus' companies collapsed.

Mr McManus also volunteered to the police that he used 20 or 30 crew members to each bring under $10,000 cash when he did concerts in New Zealand.

"We'll bring back $150,000 to $200,000 each year … I then sneak that back through the crew,"
he said.

"This is not going anywhere?" asked Mr McManus, adding: "What I’m saying to you is, if this went to the ATO, I'd be cooked again."

He also said he regularly sold concert tickets to friends and associates and kept the proceeds himself: "I'm not sharing it with the band … the cash stays in Andrew Mcmanus' pocket."

He also boasted to police: "If you want to go to my house right now, there's a safe there with about 600 large sittin' in it." He said this was proceeds from a Lenny Kravitz concert.

He also told police he had used Mr Hanson to pay ZZ Top's US management $702,000 "because, when my company, Andrew McManus Presents, was going under, I needed friends".

"He's not the only one who helped me," said the promoter, who told the police Mr Kroger, a prominent Liberal Party powerbroker, and his brother Andrew had also put money into his business. "I'd prefer you not to put [in] Michael Kroger … but he's done it for me six or seven times."

When asked what Mr Kroger did for him, Mr McManus replied: "Lend me … he'll put cash in and then I'll, you know, fold it out."

A spokesman for Mr Kroger said that it was "a standard financial arrangement".

Mr Lowy, the son of billionaire shopping centre magnate Frank Lowy, was another who stumped up funds for Mr McManus' concerts. Fairfax Media is not suggesting any wrongdoing on their part.

In his police interview, Mr Haeusler said he had been introduced to Mr Hanson by international gambling figures and that he understood Mr Hanson lent money for a living.

"That's why I approached him with the deal," he told police before correcting himself to say, "Well, I got Andrew to approach him with the deal."

Mr Haeusler told police that, because "Andrew's had financial problems", he was helping him find backers.

Mr Hanson told police in a phone interview from Beverly Hills police station that although he had only known Mr Carolan for a couple of weeks, while on a visit to Australian in mid 2011, he gave his personal trainer the suitcase of cash because he wanted to invest in Mr Carolan's laser fat reduction business.

During Mr Carolan's recent court appearance over this matter, Mr Haeusler was pacing up and down outside the court. Mr Carolan's lawyers said that although the transfer of the money was "unorthodox", since no one has been arrested the money should be returned.

Police said that investigations were continuing. Justice Richard Button, who has reserved judgment, said it was a "most extraordinary occurrence" for anybody to give a suitcase of cash to their personal trainer.