VIDEO: The Accomplice

INTRODUCTION: Hi, my name is Angus Grigg and I’m an investigative reporter at Four Corners. Tonight’s Australian Story began as a podcast I made when I worked at the Australian Financial Review. It’s a tale of greed and betrayal and the lengths authorities had to go to, to crack the biggest insider trading case in the nation’s history. But it’s also a story of one of the young men involved in the crime and how he’s taking responsibility for his actions.

(News report)

Anchor: The Australian Federal Police has broken up a $7 million insider trading scam.

(News report)

AFP Asst Commissioner: If you're thinking of engaging in this sort of activity, think again.

PROF CLINTON FREE, DEPUTY DEAN, UNIVERSITY OF SYDNEY: It's the greatest white collar crime story in the history of Australia. There’s unbridled ambition of young men involved in an illegal enterprise.

(News Report)

Sky News anchor: We’re going to take you live now to Canberra following the arrest of two men on charges of insider trading.

ANGUS GRIGG, INVESTIGATIVE REPORTER: It wasn't just your typical vanilla insider trading investigation. This involved the corruption of a Commonwealth Government employee.

(News Report)

Sky News

AFP Asst Comm, Ian McCartney: Today in Melbourne and Canberra, the AFP and ASIC executed 8 warrants.

SNR CONSTABLE KYLIE STANDING, AUSTRALIAN FEDERAL POLICE: You see movies like, the Wolf of Wall Street, but to actually see it play out in front of you, I'm going to remember it for a while.

PROF CLINTON FREE, DEPUTY DEAN, UNIVERSITY OF SYDNEY: It's a story about two young men, Chris and Lukas, who, do something reckless and illegal and at its heart, it's a it's a human story about greed and almost Shakespearean deception.

CHRISTOPHER HILL: Do I still count Lukas as a friend? The day I left prison was the last time I saw him, so probably not.

The Accomplice.

ANGUS GRIGG, INVESTIGATIVE REPORTER: Just before dawn, the 9th of May 2014, authorities bang on the door at a flat in Canberra

CHRISTOPHER HILL: I thought there'd been a mistake, they’d gotten the wrong house. I was 24, and up until that point in my life I never had any interaction with law before. The AFP Officer in charge got me to read through the search warrant. As soon as I saw, you know my name, and Lukas's name. It was right at that point that I knew exactly what it was about.

SNR CONSTABLE KYLIE STANDING, AUSTRALIAN FEDERAL POLICE: Operation Leith was the code name that we gave the insider trading investigation, which involved Lukas Kamay, and his university friend Christopher Hill.

PROF CLINTON FREE, DEPUTY DEAN, UNIVERSITY OF SYDNEY: Chris' access to price-sensitive government information was essential to Lukas's plan to enrich himself.

SNR CONSTABLE KYLIE STANDING, AUSTRALIAN FEDERAL POLICE: In this case, he saw an easy option with Christopher Hill.

ANGUS GRIGG, INVESTIGATIVE REPORTER: Chris Hill, Christopher Hill, he's a bit of an everyman. He was a very sort of smart young guy, ‘effortlessly smart’, was how his friends described him.

CHRISTOPHER HILL: I spent most of my childhood growing up in Donvale, in the eastern suburbs of Melbourne. I was very academic at primary school, which carried on through to high school.

CRAIG MERRITT, FRIEND: Chris, he just sort of had a gift, doesn't really need to take a note or try all that hard, it just sort of comes to him. Quite frustrating for everyone else, but he’s very capable and very confident.

CHRISTOPHER HILL: Growing up I always wanted to get into the corporate finance sort of world, something in something in banking, something with money, numbers, maths just made really logical sense to me, it was very structured
and that's kind of the way my brain's wired and which is why I enjoyed it.

ANGUS GRIGG, INVESTIGATIVE REPORTER: Chris and Lukas meet at Monash University straight out of school when they were both doing the same degree, commerce and economics.

CHRISTOPHER HILL: You know, he was a different breed to me in the sense that he was so super driven and ambitious to the point where he was he just had to succeed.

ANGUS GRIGG, INVESTIGATIVE REPORTER: Chris probably had a bit too much fun and quickly realised that his marks weren't going to be good enough to win a place at one of the sort of top financial houses in the country. And so he ended up taking the government job with the Australian Bureau of Statistics or the ABS, as it's known. It's a massively Important government agency.

CHRISTOPHER HILL: After two to three years, I was promoted to a position where I was, you know, one of the people in charge of the labour force statistics in particular, everything, including employment rate, unemployment rate: the biggest economic indicators for the country.

CRAIG MERRITT, FRIEND: I think in the beginning, we all thought he was killing it, having a great time. And then after a while he started to get over the job a little bit.

ANGUS GRIGG, INVESTIGATIVE REPORTER: He was stuck in a rut and he wasn't necessarily looking for something else or looking for some excitement in his life. But when it came along, he was certainly happy to embrace it. Two years after Chris and Lukas had left university, a group of friends came together down on the Mornington Peninsula. You know, a reunion, if you like, for the weekend.

CHRISTOPHER HILL: I was just chatting with someone about, you know, that I just got a promotion and was now, you know, doing the Labour force figures. I Remember Lukas was there talking to someone else and he just spun around and said oh, you know, I can use those to make money or something like it was it was just a massive throwaway comment at the time. And that was the end of it. That was, it was nothing more than that.

ANGUS GRIGG, INVESTIGATIVE REPORTER: That's really what kicked it off, from my understanding, is that just this one throwaway line where Lukas says to Chris, wow, you know, I could use those numbers.

CRAIG MERRITT, FRIEND: I met Lukas a couple of times over at Chris's house.

(Video)

Lukas: You’re supposed to be directing me, not taking photos of me haha.

CRAIG MERRITT, FRIEND: Lukas was a very charismatic, enthusiastic guy. He seemed, you know, that he'd done quite well for himself. You know, he's obviously come from a good family, come from a bit of money, a bit of wealth.

PROF CLINTON FREE, DEPUTY DEAN, UNIVERSITY OF SYDNEY: I think for Chris, Lukas represented success. He had achieved the job that I think most people doing a commerce degree at that time in that place would have sought after working for a large international investment bank.

ANGUS GRIGG, INVESTIGATIVE REPORTER: Very shortly after he gets a job with National Australia Bank and he's promoted fairly quickly through the ranks of NAB. And as a, sort of 25 or 26-year-old, he's earning $200,000 a year. He's driving a BMW roadster. You know, here's a guy that is doing pretty well. 

CHRISTOPHER HILL: A couple of months after the party Lukas called me and we had a fairly brief chat about exactly what information I had access to at the ABS and also the fact that using that information, we could be very profitable, you know, through trading on the on the markets. We caught up in Melbourne at a pub and it was there that we discussed how I was going to get the information to him, you know, and we decided that we'd have mobile phones in in, that were registered in other people's names.  There wasn't a lot of thought put into the burner phones, one of us just sort of had it in the background back of our minds from, I don’t know, from TV or movies or just general, I don’t know.

ANGUS GRIGG, INVESTIGATIVE REPORTER:How this scheme worked was that Chris would access the data from his ABS computer, he’d write it on a piece of paper and put it in his pocket, he'd take it out of the building. He would ring Lukas on his burner phone and then basically as the sort of foreign exchange market works, it's all around expectations. So, if the data was stronger than expected, the Australian dollar would typically go up in that case. And so Lukas would buy the Australian dollar. And when it went up, he would sell it after that, and that's when he'd make a profit.

CHRISTOPHER HILL: So the plan was to hit a balance of $200,000 in Lukas's account. He would then pay tax on it, leaving us with $100,000 to be split in two or $50,000 each.

ANGUS GRIGG, INVESTIGATIVE REPORTER: On September 12, 2013, Lukas and Chris make their first trade. About 30 seconds before the labour force figures were released at 11:30 am on that day, Lukas goes and buys some contracts and then about sort of 26 seconds later he sells those contracts after the labour force figures have been released and he makes a profit of $13,500.

CHRISTOPHER HILL: It was like that that feeling of ok we've done it, we've achieved it. And yeah, there was you know, it was a good feeling.

Question: did you have any nagging doubts about what you guys were doing?
CHRISTOPHER HILL: Yes, very, yeah very initially. But after the first time, you know, when I gave him the second number and then the third and the fourth, it just I started not thinking twice about it. You know, when you make a decision over and over again with no negative consequences, you just, you stop thinking about what you're doing really.

ANGUS GRIGG, INVESTIGATIVE REPORTER: What Lukas didn't tell Chris was that he'd opened a sort of second secret account. And Lukas in his in his secret account he'd made $7,700. When you think about what Lukas did, basically at the first available opportunity, he betrayed Chris. And it was very clear from that point on that he wasn't going to stop at $200,000. Gradually as the months went on, his trades got bigger and bigger. So he's putting down more money and by the time we sort of get up to Christmas of that year, you know, he's setting off red flags everywhere.

JOEL MURPHY, FOUNDER, EIGHTCAP: Lukas Kamay very quickly became one of the biggest traders in Australia at the time. He definitely would have been in the top three of Pepperstone clients overall for volume. Pepperstone is a foreign exchange and derivatives broker that Lukas traded with. I was on the licence as a responsible manager at Pepperstone Group so anything compliance related was definitely going to fall to me.

ANGUS GRIGG, INVESTIGATIVE REPORTER: The first thing that sort of caught Joel's eye, if you like, was the fact that Lukas was winning all the time. I think in the first few months he won twenty-one times in a row.

JOEL MURPHY, FOUNDER, EIGHTCAP: Traders in our space, if they're above 50 per cent, if they're above 55 per cent, they're doing a really good job. I remember the moment when the red flags first went off.
I looked at three of the trades in a row and then just saw the fact that it was statistical data in each one, and then we could clearly see the pattern was the ABS. 

ANGUS GRIGG, INVESTIGATIVE REPORTER: Joel looked through Lukas's friends on
Facebook and one of those worked in Canberra. And so he looked up that person whose name was Christopher Hill.

JOEL MURPHY, FOUNDER, EIGHTCAP: And lo and behold, the first line of search had a Christopher Hill and the ABS. I started to laugh, right then and there I knew we had him.

ANGUS GRIGG, INVESTIGATIVE REPORTER: Joel picks up the phone to call ASIC.
The Australian Securities and Investments Commission

RAYMOND WASCHL, SENIOR INVESTIGATOR, ASIC: The complaint from Joel Murphy at Pepperstone was very compelling, to have that connection given to us gave us a head start on the investigation and this case was escalated almost immediately.

ANGUS GRIGG, INVESTIGATIVE REPORTER: What we know from ASIC is that it's actually really difficult to catch people who're committing insider trading so ASIC very quickly made a decision to bring in the AFP.

DETECTIVE SGT. DEAN WEALANDS, AUSTRALIAN FEDERAL POLICE: This case was a first for the AFP. We'd never we never undertaken a joint investigation with ASIC before and not one of this magnitude.

SNR CONSTABLE KYLIE STANDING, AUSTRALIAN FEDERAL POLICE: There was a sense of urgency for the investigation because it involved a possible corrupt Commonwealth official. So that's a high priority for the AFP.

ANGUS GRIGG, INVESTIGATIVE REPORTER: By November 2013 Lukas’s trading just got totally out of control. By January his profits had climbed above $270,000. And then by February, just a month after they were at $1.96 million and the key thing is that he wasn't telling Chris about it. So Chris still thought they were continuing, along with this very methodical plan of gradually making $200,000 in profits. Whereas Lukas had gone totally off the reservation by this point.

ANGUS GRIGG, INVESTIGATIVE REPORTER: The AFP really sort of brought a sort of almost organised crime focus to this investigation, so they had bugs installed in Lukas's car. They had bugs in his house.

SNR CONSTABLE KYLIE STANDING, AUSTRALIAN FEDERAL POLICE: We obviously suspected Chris was passing on information, but we had no evidence to substantiate it. Both Chris and Lukas were being very disciplined. They weren't contacting each other on their regular phones. They weren't meeting up in person. As time went on, we started to doubt ourselves and then there just reached a point where you went, Is he just lucky?

DETECTIVE SGT. DEAN WEALANDS, AUSTRALIAN FEDERAL POLICE: It was quite frustrating, to be honest, in terms of, not being able to, you know, really hone in on, on how that information sharing was occurring.

ANGUS GRIGG, INVESTIGATIVE REPORTER: On the 13th of March 2014, at 11:10am, police surveillance cameras within the NAB office captured Lukas taking his desk phone off the hook. He left his work station and the cameras picked him up, heading to the men's toilet. Over the next 25 minutes from a toilet cubicle at NAB, Lukas would make a giant trade that would essentially allow him to turn about one million dollars into $2.5 million. That massive trade that Lukas made pushed his profits, his secret profits above $6 million. That was 30 times more than he'd agreed to with Chris.

SNR CONSTABLE KYLIE STANDING, AUSTRALIAN FEDERAL POLICE: I'm a huge fan of the TV show The Block. And I remember one of the criminal investigators informed me that Lukas Kamay had been showing interest in purchasing one of the apartments.

What about the super Ks?!– wow! Wow! And then you girls set out, and then you take the lead.

LYSANDRA FRASER, FMR ‘BLOCK’ CONTESTANT: We held a night at the block in our apartment for all of the people that were interested in buying it, and Lukas, I guess, stood out to us because he was very young.

ALISA FRASER, FMR ‘BLOCK’ CONTESTANT: I remember thinking, oh, daddy and Mommy, are buying you an apartment! You're not old enough to buy yourself like a multimillion-dollar apartment.

LYSANDRA FRASER, FMR ‘BLOCK’ CONTESTANT: Yeah, he struck me as this young person that I guess wanted his five minutes of fame.

(The Block, Channel 9)

Auctioneer: Well good evening, ladies and gentlemen, welcome to the auction sale of apartment number three...

ALISA FRASER, FMR ‘BLOCK’ CONTESTANT: On the night of the auction he ended up bidding the highest, which was $2.375 million.

SNR CONSTABLE KYLIE STANDING, AUSTRALIAN FEDERAL POLICE: When I was watching The Block that night, it was a little bit surreal, yeah, it did appear that Lukas was taunting law enforcement. He was very confident that he wasn't going to get caught.

ANGUS GRIGG, INVESTIGATIVE REPORTER: For an organisation that goes after sort of mafia bosses and drug kingpins and things like that, you know it was a huge sort of deflating moment I think that they couldn't catch a couple of private school boys who were complete amateurs. Finally, when they thought all was lost, really, that they were never going to catch these guys, they caught a break in the investigation.

ANGUS GRIGG, INVESTIGATIVE REPORTER: It was the Anzac Day long weekend in 2014 and Chris had come down from Canberra to Melbourne and he'd planned to meet up with Lukas. But the big problem was that he'd forgotten his burner phone, so he had to contact Lukas on his regular phone. And that really was the first time that the AFP had actual recorded communication between Chris and Lukas.

Recorded conversation (ACTORS)

I’ll just give you dribs and drabs, you know, five grand five grand ten grand, and I’ll just load you all the way up.

DETECTIVE SGT. DEAN WEALANDS, AUSTRALIAN FEDERAL POLICE: I was highly surprised that that contact had occurred. It was the beginning of the end. On that weekend Lukas picks Chris up from his mate's place that he's staying at,
whilst sitting in the car Lukas provides Christopher with six and a half thousand dollars. And they sit there and have a conversation around what they have been up to and what they plan to do for the next couple of months.

Recorded conversation (ACTORS)

Lukas actor: No one knows, I'm doing this. I haven't told anyone to work. No one, not even my girlfriend knows about it. Not even my brother knows about it.

DETECTIVE SGT. DEAN WEALANDS, AUSTRALIAN FEDERAL POLICE: The conversation was actually quite amazing and I just couldn't believe that, you know, we'd actually got that golden nugget that you'd always kind of hope for in an investigation.

Recorded conversation (ACTORS)When you buy an investment property.

It’s not like it’s drug money.

SNR CONSTABLE KYLIE STANDING, AUSTRALIAN FEDERAL POLICE: It was quite exciting cos it was the first contact that we had between the two, everything that we'd suspected but couldn't prove was now starting to to come our way.

Recorded conversation (ACTORS)

Luke actor: Be mindful, I have the money in my bank account, I can earn interest on it, so I’m going to give you more than 50 per cent.

Have you kept a like that as well? You spend the money and your friends are like, what the fu… is all this moneyCHRIS ACTOR: No, I kept in my room. I put cash in my wallet when I go out. That's it.

DETECTIVE SGT. DEAN WEALANDS, AUSTRALIAN FEDERAL POLICE: I was excited, to say the least. It was it was a it was a game changer. It was a pivotal point in them in the investigation.

ANGUS GRIGG, INVESTIGATIVE REPORTER: The 9th of May 2014, authorities finally got the chance to go and kick in some doors with dawn raids in both Canberra and Melbourne.

RAYMOND WASCHL, SENIOR INVESTIGATOR, ASIC: I started searching through Lukas' drawers, and it just struck me that everything was so neat. I looked up and saw that there was a window open above Lukas's bed. And the sergeant who was in the in the room with me, he jumped on the bed and stuck his head out the window and said, there's a phone down on the ground down here.

ANGUS GRIGG, INVESTIGATIVE REPORTER: Sitting below is the crucial piece of evidence they're looking for, the burner phone. Lukas had heard the knock on the door and then he’d thrown the phone out the window. Problem was was a very good throw and it didn't go very far.

SNR CONSTABLE KYLIE STANDING, AUSTRALIAN FEDERAL POLICE: I do remember seeing Lukas when I entered the premises. It stood out in my memory because he seemed very calm, like almost unconcerned, wasn't upset, wasn't showing to me any signs of distress. Most people just realise ah, I've been caught, I'm in trouble and they fall to pieces. But he kept it together. It was then my job to go in and tell Lukas that we've restrained all his bank accounts and then also two properties which he owned and a BMW motor vehicle. It's the first time we've actually just seen him drop his head and show some type of, you know, concern or realisation that reality’s hit and that we've taken that away from you. Well, that's where it hits the hardest.

DETECTIVE SGT. DEAN WEALANDS, AUSTRALIAN FEDERAL POLICE: The betrayal of Lukas to his friend Chris was quite extraordinary. We expected to see an equal profit-sharing arrangement, but it was during the record of interview that Chris found out about the seven million dollars. I don't think he actually believed us.

CHRISTOPHER HILL: Yeah I just thought they were trying to trick me. I had no idea that he had opened another account and had also traded in that other account for himself. When I found out just how much money had been made and, you know, initially I was pretty pissed off because it just seemed so obvious to me that it was such a stupid amount of money that there's no way it wouldn't have gone undetected. My barrister, he just said flat out you'll definitely be going to prison. It was a pretty full-on moment.

ANGUS GRIGG, INVESTIGATIVE REPORTER: At the end of 2014 in the Victorian Supreme Court, both Lukas and Chris ended up pleading guilty to insider trading. Lukas took the stand, which was very unusual for someone pleading guilty and he essentially blamed it on Chris 

RAYMOND WASCHL, SENIOR INVESTIGATOR, ASIC: When it came to the question about how this all began, Lukas said that Chris had approached him.

ANGUS GRIGG, INVESTIGATIVE REPORTER: The judge was very scathing and ultimately, she came down on the determination that it was Lukas who came up with the scam.

JUSTICE HOLLINGWORTH:

The DPP is right to describe your conduct, Mr Kamay, as the worst instance of insider trading to have come before the courts in this country".

ANGUS GRIGG, INVESTIGATIVE REPORTER: Lukas was sentenced to seven years and three months jail with a non-parole period of four years and six months. Now, that was the longest sentence for insider trading in Australian history. When it came to Chris, he got a lesser sentence.

JUSTICE HOLLINGWORTH: Christopher Russell Hill, your total effective sentence is three years and three months imprisonment. Remove the prisoners please.

CHRISTOPHER HILL: Family and friends, I think they were obviously a bit shocked at the length, you know I was probably the only one who'd really kind of already accepted it.

CRAIG MERRITT, FRIEND: His dad let out this like guttural cry really for his parents who were just very good people, you never wanted to see them like that really, it was really hard.

PROF CLINTON FREE, DEPUTY DEAN, UNIVERSITY OF SYDNEY:I'm a professor at the University of Sydney Business School and my research is focussed on white collar crime and corporate governance. When I first met Chris, it was really in the context of an interview where we were getting him to reflect on the sorts of justifications and rationalisations that he was thinking through during his offending. The thing that struck me most about him was that he owned what he had done. It's hard to explain why Chris got involved. The amount in the scheme of things wasn't going to be life changing. And the risks were substantial. The consequences were extreme.

CHRISTOPHER HILL: I knew in the back of my mind that it's something I shouldn't be doing. But then I guess I kind of convinced myself that there was really no victim. It wasn't, you know, it wasn't coming directly out of someone's pocket or wallet or house.

SNR CONSTABLE KYLIE STANDING, AUSTRALIAN FEDERAL POLICE: Insider trading is definitely not a victimless crime. When you've got someone who is winning and making significant gains, there's always going to be someone that's on the losing side to that. And typically in these cases, it's going to be a global spanning bank or financial institution that backs the foreign exchange market. And they’re owned by shareholders, including your average mum and dad investor via their superannuation.

REPORTER QUESTION: Are you or were you sort of ashamed of what you did?

CHRIS: Um, I'm not going to say that I'm ashamed of what I did. I guess I'm disappointed to some extent. I definitely take full responsibility for, you know, for everything I've done. And I think that's why, you know, a lot of people found it so hard to accept why I was not so angry at Lukas. But I was a willing participant and and a willing participant over and over and over again.

ANGUS GRIGG, INVESTIGATIVE REPORTER: After two years in prison, Chris was released from Beechworth, and he talked about it is quite an emotional time really.

CHRISTOPHER HILL: My parents were waiting to pick me up and that was just, you know, just such a good car ride home. I started applying for jobs and I probably went through about 20 or 30 applications but I just didn't hear back from a single one. That was pretty hard because I'd gone from you know, I've come out, this is great back to kind of oh, and now I can't get work.

ANGUS GRIGG, INVESTIGATIVE REPORTER: Lukas got out of prison in 2019 after serving four and a half years of his sentence. I spoke to a number of Lukas's friends during the podcast. I think he's a fascinating character. I don't think he's the sort of bogeyman that he's portrayed in some senses. I think there's a lot of good in Lukas as well. he made a really terrible mistake very early in his life. And I think that, you know, he's paid a really huge price for that.  I've heard that he'd done an MBA while he was inside and he had become an advocate for prisoners rights and help people make good decisions when faced with lucrative temptations.

Towards the end of the podcast I got a call from Joel, the guy that was the compliance officer at Pepperstone who ultimately tipped off the police, and he wanted to meet up with Chris. And he felt quite affected by Chris's story.

(Podcast The Sure Thing)

CHRIS: if I can do something that benefits other people who may be in the same sort of position as I was in, if we can make them think twice about what they’re about to do..

JOEL MURPHY, FOUNDER, EIGHTCAP: I started to get a bit of a tinge of guilt because my involvement might have added some prison time to both their sentences. And that sort of really weighed on me. I really just wanted to have a beer with Chris and, and see things from the other side of the fence.

CHRISTOPHER HILL: Joel and I met up in Melbourne earlier this year and he mentioned that he had a couple of positions and asked if I'd be interested.

CRAIG MERRITT, FRIEND: I know that when he got his, his job, he was over the moon just to be working again to sort of a way that you feel like a member of society.

CHRISTOPHER HILL: I'm really enjoying the position and really enjoying the people the, the new challenges and yeah, I’m just thankful for the opportunity and looking forward to what's coming next.

JOEL MURPHY, FOUNDER, EIGHTCAP: Christopher is a risk analyst, so if there was any insider trading he's probably going to be the one that would uncover it. The job that he’s in is ironic, but he's definitely learnt his lesson and he doesn't want to go back and repeat the early 20s of his life again. I think he just wants to move forward and work hard, build his career and build his life. Yes, I do, I do trust Christopher Hill completely.