A former Australian MasterChef contestant turned mining company chief executive is in court, alleged to have embezzled over $US7 million ($A7.5 million) to pay for his lavish lifestyle.
Aaron Thomas appeared on the first season of MasterChef when he was 21, before becoming chief executive of United Kingdom mining company Oakmont Trading.
Thomas is alleged to have embezzled more than $US7 million from the company between 2010 and 2013, spending the money on a high-class lifestyle for himself and his girlfriend.
An investigation by Oakmont, assisted by forensic accountants, resulted in the suit being filed in the New York Supreme Court on Monday against Thomas and his Brazilian fiancée Thaiana Rodrigues.
Get daily business news.
The latest stories, funding information, and expert advice. Free to sign up.
The cook turned mining executive is said to have spent the money on private jets, designer watches and a $US171,000 Tiffany’s engagement ring.
The pair is also alleged to have rented a $US14,500 a month apartment in Manhattan with company cash.
They also took luxury holidays, with the suit revealing Thomas supposedly spent $US30,000 of Oakmont funds on a chartered yacht and private jet during a holiday in the Caribbean. A further $US53,000 was spent on a luxury vacation to Australia and $US91,000 was spent on a Las Vegas trip.
The Oakmont board fired Thomas in January this year and has since launched legal action against him in the UK and in the US. He’s been charged with breaching his fiduciary duties, fraud, unjust enrichment and conversion.
Thomas originally founded the company, which focuses on iron ore and owns operations in Brazil, in 2010.
Speaking to the New York Post, Thomas said the lawsuit was an attempt by the board to take hold of his remaining shares, and he pledged to file a countersuit.
Thomas appeared on the first Australian season of MasterChef in 2009, but was eliminated after losing a test to fellow contestants Sandra Morena and Julie Goodwin, who went on the win the show.
At the time, Thomas’s overconfidence was said to be his downfall, as he failed to taste the paella he was cooking and did not achieve the right balance of spices.
Warfield and Associates chief executive Brett Warfield told SmartCompany maintaining lifestyle standards is a common motivator of fraud.
“Research from our Million Dollar Fraud report found enhancing lifestyle was the underlying factor for every one in three million-dollar frauds,” he says.
“The only motivating factor which was more prevalent was gambling. Across frauds of all monetary value, this is pretty consistent, although a desire to improve one’s lifestyle often comes ahead of gambling.”
Warfield says company directors and chief executives sometimes take advantage of the responsibility given to them.
“What I’ve seen is if someone is doing a very good job for the company, is making them money and is getting along well with the board, they’re often given a lot of latitude in how they run the company,” he says.
“This can sometimes lead to them taking advantage of corporate governance and if they get away with it they start to feel like the company is theirs.”
Warfield says this is just another instance of “someone going off the rails”.
“The embezzling will often start small and then grow exponentially. They will get arrogant, lazy and often do it in several ways,” he says.
“Some of them even start to brag about their purchases and holidays, this is the real warning sign, particularly if it doesn’t make sense when viewed in line with how much they’re earning.”