Joseph Papalia: Huge jail term for Ponzi scheme accountant who ripped million off his tight-knit community

An elderly Ponzi schemer, who ripped millions of dollars off family and life-long friends in their tight-knit South West Italian community, has been jailed for more than a decade. Joseph Papalia told his 41 victims a pack of lies to get them to hand over vast sums of money for investments that did not exist. Instead, he funnelled the cash into his failed retail clothing businesses in Perth. The accountant said he was importing goods from China and Hong Kong, claiming he had contracts lined up with BHP, Rio Tinto, Fortescue and Alcoa for work boots and high-vis apparel. The 75-year-old also said he had contracts with Harvey Beef and Multiplex for pallets, Super Cheap Autos for car seat covers and was the chief financial officer for the retail chain Thingz. He also told lies about importing building products, trading in the international money market, share market opportunities and buying clothing from liquidated entities. Among his promised lofty returns was 20 per cent over just one week. The betrayal of trust was breathtaking, with Papalia targeting his own family, including a cousin. Many of his victims had known him all of their lives, having grown up together in the Harvey area. In one case, the victim had lived on the same street. The father-of-two was often the accountant for entire families, attending their weddings and delivering eulogies. He even stole $171,000 from his godson. The connections went back a generation to migrant parents — one of Papalia’s victims described herself as “being like a daughter” to him. Multiple members of the Morabito family were deceived out of hundreds of thousands of dollars, including former Dockers footballer Anthony Morabito and his father Vincent, who is related to Papalia. Papalia talked others into parting with their superannuation, forcing them to delay their retirements. One elderly couple had to sell their home and is relying on Centrelink. Papalia made up outlandish excuses when creditors tried to get their money back, including claiming he had Hodgkin’s disease, his car had been stolen and his sister-in-law had a foot amputated. When he started being threatened, he begged a man for money to invest in sex toys, “crying on your hands and knees, begging”, District Court of WA Judge Carmel Barbagallo said on Friday. That victim lost $1.57 million. Papalia was convicted of stealing $9.6m but was initially accused of taking double that sum. Judge Barbagallo said his legitimate business started ailing during the 2008 financial crisis and worsened during the pandemic. He said he began making “stupid decisions” when health problems emerged and didn’t consider bankruptcy. “You thought you could trade your way out of financial trouble,” the judge said. “You got caught in a vicious cycle of robbing Peter to pay Paul.” She said the profound impact his crimes had on his victims — many of whom were vulnerable after the death of loved ones or marriage breakdowns — was “devastating” and “life destroying”. Most were elderly and not in a position to return to work after being financially ruined. “Years, decades, a lifetime of hard work. . . you stole family legacies,” Judge Barbagallo said. She accepted Papalia was remorseful and had wanted to plead guilty a lot sooner but had been given bad advice to stand trial by his previous defence counsel. He’d shown insight into his offending, telling a psychiatrist his victims would no doubt have “lost faith in humanity”, she said. Papalia was sentenced to 11 years and eight months’ jail. He will be eligible for parole after serving nine years and eight months, when he’s aged 81, given he has already served more than four years.