The $10m tax bill splitting the Ibrahim brothers


For three decades, Sydney has regarded the House of Ibrahim with fear and fascination.

Now, for the first time, we take you inside the private world of this complicated family thanks to an enormous cache of surveillance material tendered to a NSW court.

There are more than 880 phone calls and texts that were covertly recorded by police over more than a year, revealing the truth about feuds, grudges and family lore, including the secret tunnel under patriarch John Ibrahim's Eastern Suburbs mansion.

There are hundreds of police photos taken inside Ibrahim homes during police raids, and an even larger collection of surveillance photos taken by police tailing family members and associates through the city's streets.

The material sheds new light on the family's networks, reaching beyond brothers John, Fadi, Michael and Sam to the far reaches of entertainment, night-life, property and crime.

On their private calls, the brothers and their associates detail their rivalries and power struggles, as well as moments of "us against the world" camaraderie and black humour.

On his way to cementing his status as the King of the Cross, nightclub boss John Ibrahim faced down bikies, killers, thugs and crooked cops.

But in recent years, the person that threatened to bring Ibrahim to his knees was a nerd who is good with numbers.

By 2017, the government's financial boffins had sent Ibrahim to the wall financially by hitting him with a multimillion-dollar tax debt.

The bill was for unpaid land tax and a "backlag" of other taxes, John said in calls that were tapped by police.

Michael Ibrahim was captured in one call tendered in his criminal proceedings saying the bill was $10 million but was negotiated down to $4 million.

The amount changed again because in a July 2017 call, John told his younger brother Fadi he had paid back $6.9 million of the debt but still had to cough up $100,000 a month for the next eight months.

John also told Fadi he was living on credit card debt to stay afloat and that his American Express card had blown out to $180,000 in the red.

The debt put John under severe financial strain.


Notoriously secretive, Ibrahim has spent decades trying manage the tension between guarding his financial secrets while nurturing a carefully managed public profile.

The public fascination with Ibrahim has grown exponentially since he released his autobiography in 2017 and the 2010 instalment of the TV series Underbelly immortalised his rise to power on the Kings Cross scene.

John Ibrahim is heard on police tapes tendered to court discussing his massive tax debt. Picture: Dylan Robinson
John Ibrahim is heard on police tapes tendered to court discussing his massive tax debt. Picture: Dylan Robinson


An even less welcome by-product of fame for Ibrahim has been scrutiny from government authorities like the tax office and the police.

When police raided John's Dover Heights mansion in August 2017, they made a discovery that shed further light on his financial affairs.

It was a single page document featuring a complex diagram that outlined the structural blueprint of John's financial affairs.

This included an intricate web of companies and their directors, family and business trusts, plus millions of dollars worth of loans and properties.

John's tax debt came at a time when he was already financially squeezed.

He had taken out millions of dollars worth of loans to invest in property. To avoid disaster, he was forced to take emergency over drafts and loans.

This included a loan from Fadi, which caused tension between the brothers.

Fadi complained bitterly to his accountant that by borrowing hundreds of thousands of dollars against his own mortgage to bail out John, he was now in a financially precarious position.

Fadi Ibrahim was recorded on calls tendered to court asking John to repay him money he had lent him.
Fadi Ibrahim was recorded on calls tendered to court asking John to repay him money he had lent him.

In one call, Fadi told the accountant he wanted to put a caveat on John's Dover Heights mansion.

Before John came knocking, Fadi had already borrowed heavily against the Dover Heights mansion he bought for $4.08 million in 2013 to lend to other people, he said in calls.

After taking out another loan for John, Fadi was struggling to meet his own financial commitments.

John is believed to have been hit with the original tax bill in the years leading up to 2017, which related to land tax and other unpaid taxes.

By July 2017, Fadi had major financial problem looming.

He was set to lose money he had previously sunk into a property. To avoid this he needed to make a payment to secure the mortgage.

But with the loans to John and others, Fadi said in calls that he couldn't draw down his mortgage any further to cover the payment.

He had to put the hard word on John.

On July 21, 2017, Fadi woke John up with a phone call. With an apologetic tone, he asked for $200,000 of his money back.

Fadi attempted to soften the blow by opening the call with good news. This was that Fadi's mate from American Express might be able to extend John's line of credit.

But then Fadi had to get to the real reason for the call.

"Another thing, John. Please brother, I need to settle on this mortgage by Monday. Can I get that 200 back?" Fadi said.

John blocked him.

"I haven't got it in my account, Fadi," John said.

Fadi dropped the price. Could John return $100,000?

The answer was still no.

"I owe a hundred and f***king eighty grand on my credit, why do you think I'm bringing up my Amex? I owe 180 grand on my Amex," John said.

Fadi persisted. He explained he had planned to borrow on his mortgage but was now too stretched.

John wouldn't budge.

"I know, I'm f**ked too, brah. I've got no money in my account. I paid it all to tax. I'm paying 100 grand every month for the next eight months," John replied.

Fadi asked if John could borrow from someone else.

John replied: "Yeah. Let me see if … I'm telling ya, I've got no money in my account. I'll have to get it from someone like I got it from you."

"Let's start asking around who's got money to lend us, someone will find it," John said.

"I've got no money in my accounts and I'm trying to get a five hundred thousand overdraft now on my house so I can f**king pay the rest of this crap off, including the money I owe you," he said.

Fadi said he thought John's tax problems had ended.

"Haven't you paid it all?" Fadi said. "I thought you paid it all off?"

John said he was still in the red.

"I paid it all … I've paid $6.9 million in two years," John said.

Fadi interrupted and said: "I thought it was only three."

"No," John replied. "And then I had two years backlog and they've just hit me with a f**ked land tax and the backlog all at once."

Showing some solidarity, Fadi said: "I'm gonna get a big tax bill this year too man, don't worry. But not that much."

John Ibrahim's Dover Heights mansion.
John Ibrahim's Dover Heights mansion.

Fadi's tiptoeing display of emotions with John was different to what he showed in his phone calls to his accountant Bahia Nasser, which were also tapped by police.

In a call to Ms Nasser on April 27, 2017, the accountant chastised Fadi for lending John the funds, asking "Where's all his money?"

"He's got none," Fadi replied. "He had to pay it to the tax office. And he's a f**kwit. He's overcapitalised. He's bought too much stuff. Now he's overcapitalised … I don't give a shit," he said.

"At the end of the day it's secured on his (Dover Heights) property, isn't?"

In a call on April 20, 2017, Fadi had Ms Nasser draw up a loan agreement between him and John.

" … I want (the loan agreement) with John Ibrahim," Fadi said in that call.

"I just loaned him $400,000 right …'cause that way I can put a caveat on his property," he said, adding that he was referring to John's Dover Heights home.

An explanation for John's financial situation could possibly be traced back to spending spree on property that started in 2012.

By 2016, John and his associated companies had outlaid about $26 million on properties, including Redfern's the Norfolk Hotel plus three adjoining properties on Bayswater Rd in Potts Point, according to property records.

Earlier in the April 27 call, Ms Nasser asked Fadi: "Why did you give him the money? And where did you get the money to give him?"

When Fadi said, "I borrowed it off my home loan", Ms Nasser snapped back: "OK, so you haven't learnt."

"What am I supposed to do?" Fadi retorted. "They've got me in a corner."

Ms Nasser said: "But you don't even have a f**king relationship with him … How does he have you in a corner?"

"Trust me, they've got me in a f**king corner, man," Fadi replied. "He goes to me - he's got some tax bill. He goes 'Mate, just help me out'."

Fadi explained that John insisted that the interest he would pay to him would be better than a prolonged debt to the tax office.

Michael Ibrahim was heard on phone calls tendered to court telling friends about his brother John’s financial troubles.
Michael Ibrahim was heard on phone calls tendered to court telling friends about his brother John’s financial troubles.

"He goes 'I'd rather just pay it off you'," Fadi said.

Gossip of John's debts leaked outside the walls of the Ibrahim family - thanks to their younger sibling.

On April 6, 2017, Michael Ibrahim was recorded on a tendered police phone tap telling family associate Youssef Sande about John's financial troubles.

The trouble was that John got hit with a $10 million tax bill.

Michael said in the call: "They wanted $10 million and then he negotiated it down to $4 (million)."

Mr Sande spoke about his own family's tax problems and Michael gave him more about John's situation.

Michael told Mr Sande that John got "inheritance" and lent it out, leading to the tax man to come knocking.

"Yeah brother, I know a lot about it because my brother went through it," Michael said. "My brother was telling me about all the shit that happened to him.

He continued: "So Fadi's all right. John's been f**ked."

"I think they got John 'cause he used … like he got an inheritance and they said, nah, it's not an inheritance, it's a f**kwage, you know what I mean.

"Yeah it's f**king ugly. It's ugly," Michael said. "You've got to have the actual paperwork if you lend someone money to show them paying back the interest rate and all this kind of shit to … justify it like."

Michael said he wasn't going to fall into the same trap.

"F**k that, bro. I'm going straight … I'm not doing nothing shonky no more. You know what I mean," Michael said. "So now my biggest problem's going to be tax, not the police. I don't give a f**k about the police."

Michael didn't mention he was involved in smuggling almost two tonnes of drugs into Australia plus hundreds of thousands of illegal cigarettes.

When police raided Michael's house in August 2017 they found a document that showed he had also lent $500,000 to John.

The loan was from Michael's company, Kent Street Holdings, to John's, Edge Point Holdings, with an annual interest rate of four per cent, the document said.

The origins of the money Michael was loaning remains a mystery. It is also unclear if the loan went ahead given the document was not dated.

The document featured signatures under John and Michael's names, was witnessed by Potts Point accountant Marlon Fraser and was certified by a justice of the peace.

Fadi Ibrahim's accountant Bahia Nasser.
Fadi Ibrahim's accountant Bahia Nasser.