How Bill Vlahos, his punters club and a horse with no name cost mum and dad investors millions Bill Vlahos at the Australian Inglis yearling Sales at Newmarket, Sydney. WINSTON Churchill said heroes fight like Greeks, but Bill Vlahos's coaches weren't so sure. The young Vlahos who lined up for Toora in the early 1990s wasn't so much under the packs as skirting them, ready to grab opportunities battling players gave him. Mr Vlahos looked like a Mokbel but he played like Tinkerbell. He was a thinker and a talker, not a fighter. This might explain why he didn't get hurt in the mysterious "assault" he reported to police after his utility was torched last Sunday night - with his laptop full of betting and banking records inside it, as a bemused Supreme Court judge heard this week. Mr Vlahos supposedly studied psychology and possibly accountancy and fancied himself a mathematician, so it was no surprise he worked the angles and talked a good game. Those who knew him then are shocked by what's happened to their old teammate this week - but not denying it's possible. Bill always had the gift of the gab and left an impression he was passing through on the way to something better. The fact he came down from town to play for Toora for money showed he was making the most of his chances to turn a dollar, even then. Country clubs would "sling" players who might be flat out getting a game for nothing in the better amateur sides. Mr Vlahos was handy enough to play both football and cricket, and knowing his way around the social side of country and suburban clubs would prove useful years later, when he combined his hobbies of making money, playing with figures and buying and betting on horses. Sports-minded people who fancied the idea of a share in a horse or a punting syndicate - but who aren't bloodstock or betting experts - are ideal clients for a canny syndicator who can press the right buttons. Because he worked in a psychology practice, Mr Vlahos was a student of human nature. He understood people's weaknesses. As a punter with a mathematical bent he was a student of form and figures and the laws of probability and percentages that bookies use to "make a book." Tellingly, perhaps, by 2001 (and probably earlier) he was involved in punting websites touting tips and systems: at least, he was providing "testimonials" to one that is still online. It's gushy, glib and probably garbage, boasting of a long-shot winner that supposedly had him shouting the bar afterwards. Bill Vlahos (right) at the Pillar Of Hercules sale at Caulfield racecourse. Such bottom-feeder stuff is not what you might expect a supposedly respected psychologist to be doing. It seems a long way from his multi-million-dollar punting scheme and his more public arm, the BC3 Thoroughbreds bloodstock enterprise, both now collapsed. Then again, maybe it isn't so different. Touting is a bit like prostitution - whether in the penthouse or the outhouse, the price doesn't alter the profession. THE days are gone when rascally reporters could create nicknames for those they wrote about. It's a pity, as Bill Vlahos is crying out for a nickname. It would add something to the colourless racing identity in the middle of the most entertaining racing caper since The Sting. He is nearly as mysterious as the ill-fated John Friedrich, mastermind of the huge National Safety Council hoax that transfixed Australia in 1989. "Dollar Bill" wouldn't be a bad name for Mr Vlahos, though it's hard to catch all his skills: a combination of psychology, mathematics, accounting and a rebranded version of the old-fashioned mixture of snake oil and horse manure that's always been around racecourses. It seems Mr Vlahos understood the power of illusion and the idea that a sucker is born every minute, and there's no law against that. Racehorse trainers and advertising agencies have been doing it for years. So have magicians. There used to be one around town who did the circuit of children's birthday parties with his top hat and tame white dove. His pet trick was to borrow a $10 note from a parent in the audience, flick it around grandly and (hey presto) produce two $10 notes. He'd hand one back to the donor with a flourish and make the other one vanish as easily as it had appeared. Police inspect the torched utility belonging to Bill Vlahos. The difference between the kids' magician and Mr Vlahos is that Dollar Bill was better at selling the illusion: apparently he can persuade adults it's real. First he makes money appear - then he makes even more of it disappear. And not one lonely $10 bill, either: a truckload of them. Magic, indeed. Eventually, of course, some people who watch magicians start to see through the smoke and mirrors. The cracks in Dollar Bill's act appeared early this year, around the time he started suggesting he might have to pay a record price of, say, $5 million for Black Caviar's half-brother. He then made the prediction come true, running up the horse's price to that exact figure at the Sydney Easter Yearling Sales. The sale made headlines and rode the massive wave of public interest in Black Caviar after her incomparable string of wins. But while the public marvelled, in racing circles the crazily inflated price raised eyebrows. Racing insiders asked each other why anyone would pay well over the odds - maybe $2 million over - for a horse that every expert except Mr Vlahos's veterinary surgeon had crossed off as too risky because X-rays of his knees suggested he might not stand up to racing. Young horses can often prove experts wrong, and grow up to race despite apparent faults, but buyers spending millions want perfection, especially in a colt bought as a stallion prospect. Buyers except Bill Vlahos and BC3 Thoroughbreds, seemingly. In fact, Mr Vlahos seemed keen to make a splash no matter what it cost - in fact, the bigger the better. After he made the winning bid to top relieved-looking underbidder Adam Sangster, he turned on the French champagne in a marquee full of new best friends celebrating buying the most overpriced set of legs in Australian sports history. Including Buddy Franklin going to the Swans. The party after the $5 million purchase reminded some racing people of the rapid rise and fatal fall of the Kiwi conman Mike Bastion in the late 1990s. Bill Vlahos interviewed after he bought lot 200 for $2.6 million at the Australian Inglis yearling sales at Newmarket, Sydney. "Bastie" was a hard-partying stockmarket racketeer with expensive tastes in horseflesh as well as all the other sorts. He persuaded some of the shrewdest brains and biggest names in racing to part with large sums because (he guaranteed) he could get them big returns on the stock market. Naturally, he "proved" his scheme's soundness to sceptics by paying such big percentages on investments in the first few months that they couldn't resist offering him more money - and told friends and relatives about the party boy who just wanted to make them rich. Some suggest Bastion had a captive audience because a few successful racing people had spare cash (from betting, "slings" and horse dealing) that they wanted to invest away from the sharp eyes of the tax man. Other investors just had black money, origin unknown. Bastion spent fearlessly and paid a few high-profile clients big dividends so that they became unofficial agents for his scam. What he had working for him was that although his "investors" knew every aspect of race betting markets, they didn't understand the stock market the way they thought he did. Legend has it only the hard-living jockey Greg Hall and a grumpy trainer got their money out before Bastion fell, jumped or was thrown from a sixth-floor ledge in Hong Kong in 2000. Several hundred attended his funeral in Melbourne, most of them owed part of the $35 million that had vanished before "Bastie" left the building. Greg Hall was no Rhodes Scholar but he grew up knowing about rorts. He insisted on getting his money out of the scheme, figuring no one could buy as many expensive yearlings as Bastion did "and not go broke." The amazing thing is that so many smart business people didn't draw the same conclusion about Bill Vlahos several years. Some were warned but ignored it. If it seems too good to be true ... it is. PROBABLY the first time the public heard Mr Vlahos's name was in Melbourne Cup week of 2007. He was the main shareholder in a supposed syndicate behind a bid of $1.8 million for Pillar of Hercules, the promising colt authorities decided was illegally controlled by brothers of jailed druglord Tony Mokbel. Buying the Mokbel horse set the pattern of Mr Vlahos's future bloodstock "investment." Pillar of Hercules won only two races and $250,000 in 28 starts and then failed at stud, was gelded and faded into obscurity as a nine-year-old. He had won about an eighth of his cost, and training expenses chewed up a lot of that modest return. But the inevitable heavy losses that come from buying yearlings didn't worry Mr Vlahos. He had already started the punting syndicate he called The Edge. It was the secretive half of his two enterprises, the other being the unregistered bloodstock syndication business known as BC3 Thoroughbreds. No one who buys expensive yearlings thinks it is a money-making proposition - at least not for long. BC3 kept buying young horses and hiring the staff and leasing the property to handle them. When the operation moved to Peter Sidwell's luxurious training complex at Sutton Grange, near Bendigo, Mr Vlahos paid $25,000 a month in rent. Add the cost of staff salaries, horse feed and veterinary bills, on top of steep yearling prices, and it was a machine for torching money. A racing figure familiar with the daily operation at Sutton Grange calculated BC3 spent up to $50 million in less than three years, which suggests that over six years it spent $100 million. The horse-buying habit was obviously being fed by the "punting club," which kept recruiting new members as word spread of its magical ability to make huge quarterly returns. Most investors are shy about confessing how much they put into the club. Some are embarrassed to be seen as suckers. Others might not want everyone to know how much loose cash they once had lying around. But some are so angry and bewildered they have contacted the Herald Sun to vent their feelings. Many are "mum and dad" investors, especially in the Yarrawonga and Cobram district, where Mr Vlahos's wife Joanne grew up. One middle-aged policeman told me he'd cashed his long service leave for $10,000 to put in the club. He was talked into it by two other police officers, now devastated because they were owed more than $500,000 in principal and "dividends." At the top end are business people who have dropped huge sums on both racehorse shares and the punting club. One Bellarine Peninsula retiree thought he had a tenth share of the $5 million colt until it was revealed this week that because the horse wasn't paid for, it has not been registered in anyone's name. That investor - and another like him in Adelaide, among others - has probably lost $500,000 on the horse with no name. That's not counting what they have put into other horses and into the punting club. There are hundreds or even thousands more unhappy customers - but how many and how much each of them handed over to Dollar Bill might never be known. The affair took a darker turn last Monday as news broke of the alleged assault of Mr Vlahos and torching of his ute. A man described as "bikie muscle" accompanied an agitated investor to a city mortgage broker's office. After a confrontation with a former AFL player who spruiks mortgages, they left. So did the mortgage broker, visibly shaken. He picked up his wife from their inner-suburban address and went into hiding. Other mortgage brokers at the firm deny any involvement but are clearly concerned about the perception that any of them encouraged homeowners to mortgage their houses for cash to put into the punter's club. One source close to Avondale Heights Football Club - where dozens of members were reportedly recruited to the punting club by a former coach - says some are angry because they believe the former AFL player "got his money out" the week before the story broke. There are many unanswered questions. One is, why didn't someone speak up earlier, before so many victims jumped on a bandwagon headed for a cliff? The fact is, at least two people did sound the alarm. IN 2009 one of the few Melbourne barristers with a close knowledge of racing spoke to a well-known bookmaker about Bill Vlahos's mysterious punters' club. Like others who understood betting markets, they were puzzled because the figures they had heard about The Edge didn't add up. At the time, the club's pool of money was already tens of millions and growing fast. Businessmen who knew the bookmaker had asked his advice about putting money into the club. He diplomatically advised caution, and he wasn't the only bookie around who hinted to curious friends to steer clear. The system, as explained by Vlahos followers, was that the syndicate backed horses in selected Sydney and Melbourne races every week. Mr Vlahos allocated ratings for horses in those races and "made a book" on each race. If his picks came up at longer odds than he rated their chances, he would supposedly back them for huge money. At the start of 2009 the size of the club's "bank" meant he could theoretically bet at least $500,000 across two meetings, which could mean up to $70,000 for each of the chosen races. But as the pool ballooned with "mug" money that year and the next, the supposed betting leapt to $2.5 million on race day. The system seemed almost plausible - except for one huge hole. When the bookie and the barrister (and other wise heads) studied the syndicate's purported betting charts, it was obvious the horses Mr Vlahos said he was backing rarely shortened in the market. It was clear to anyone with betting knowledge that if, say, $50,000 was bet on a 10-1 shot, the spectre of a $500,000 payout would force bookmakers to "lay off" (back the same horse) to offset the potential loss. And that would force the horse's price down to at least 7- or 8-1. It wasn't happening. It wasn't happening because the money simply wasn't going on, despite The Edge betting sheets claiming massive bets and astonishing returns of up to 110 per cent a year. Apart from some stray bets (mostly losing), the system was a phantom. The bookmaker revealed his suspicions to the Sunday Herald Sun, which ran a story in March 2010 saying a "swindler" had taken large sums from people who could not get their money back. Mr Vlahos was not named but threatened to sue, so the bookmaker did not pursue it. He has now been vindicated. Mr Vlahos's subsequent claim to be betting overseas was laughable, according to several bookmakers. Big offshore betting outfits ignore Australian racing apart from feature races during carnivals. The idea that Mr Vlahos bet with an unknown bookmaker in the Middle East was ridiculous. In late 2009 the concerned barrister called Racing Victoria's integrity chief, Dayle Brown, and warned him against the punting scheme. "I said, 'You need to do something because it will end up the biggest scandal in racing if something's not done'," he recalled yesterday. It looks as if he was right. As investigators rake over the debris of the scheme, looking for assets, questions hang over The Edge. Did Bill Vlahos act alone or did other, perhaps more sinister figures, use him as a front for their activities, such as laundering money? Were his "group leaders" paid incentives to find more investors? But the biggest question of all is this: was all the money spent in Australia - or were millions siphoned to a haven offshore? Until that's answered, we won't know if Dollar Bill was just a hollow dill or a magician.