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Feb 29, 2024 1 tweets 11 min read Read on X
Exclusive Brethren school in $80 million money laundering scandal.
Gareth Hales of Unispace, son of Exclusive Brethren (Plymouth Brethren Christian Church) leader Bruce D. Hales conspired with OneSchool Global to bilk charity funds and evade tax.
The OneSchool/Unispace scandal involves a complex scheme where a very large sum of money - estimated to be at least $80,000,000 - donated by members of the Plymouth Brethren Christian Church (PBCC) to the PBCC school charity (OneSchool Global) was stolen by Gareth and Charles Hales, sons of the PBCC's spiritual leader, Bruce D Hales. This scandal came to light when Steve Simmons, a former trustee of a OneSchool Global campus in Auckland, New Zealand, shared his story on social media.

Steve, who had served as a trustee for many years, possesses an abundance of emails and other records from that time to support his story. The transactions involved in the theft were deliberately complex and occurred over an extended period. Steve presented detailed evidence of these transactions, though the amount of information can make it challenging for the average listener to fully understand what happened and how.

This article is a summary of the entire scheme and will omit many details. It will be divided into four parts:

The game - how the theft was carried out

What happened in Auckland

Subsequent events at other campuses worldwide

The sale of Unispace and its replacement

The game - how it was done

To better understand the story, it's helpful to grasp the various players and processes involved in the abstract. There are three key players:

the Donor, who provides the money;

the Charity, the legitimate recipient of the money;

and the Operator, who manipulates the other players to steal as much money as possible for themselves.

The essential factor is that the Operator always remains in control. The game begins when the Operator establishes the Charity, which is officially registered and appears legitimate, convincing the donors to contribute funds. Initially, the money is used for its intended purpose, and the Charity achieves impressive results to showcase to the donors. This stage continues for several years, during which both the charity and the donations increase in size.

In the second stage of the game, the Charity accumulates enough income to fulfil all its objectives. However, this information is concealed from the Donor, who is subjected to ongoing marketing efforts to encourage them to donate more and more money. As a result, the Charity amasses significant cash reserves without any designated use for these funds.

The Operator now faces the challenge of transferring this surplus to their own pocket without arousing suspicion from the Donor or the government. This marks the third stage of the game.
The Operator accomplishes this by establishing legitimate, for-profit businesses and selling goods and services to the Charity at significantly inflated prices. In order to compel the Charity trustees to purchase overpriced goods from his own businesses and control the Charity, the Operator must exert strong influence over the trustees. If the scheme succeeds, both the Operator and the Charity will possess a complete set of seemingly authentic documentation for all their transactions, which will be sufficient to satisfy tax inspectors.
This practice is a well-known form of money laundering, where profits generated from criminal activities, such as fraud in this case, are disguised as legitimate trade transactions.

The fraudulent nature of the relationship between the parties involved can be demonstrated by three factors:

Conflicts of interest: The Operator wields control or influence over both the Charity and the Donor.

Single-source contracts: The Charity is always compelled to buy exclusively from the Operator, instead of obtaining competitive bids.

Cost-benefit analysis: The Charity incurs disproportionately high costs relative to the benefits it receives.

It should be noted that governments offer significant tax deductions for charitable contributions, making them a donor as well. Approximately 30% of the amount the Operator procures is stolen from the government and, consequently, from the general public.

What happened in Auckland

The PBCC schooling system was established in the 1990s and rapidly expanded globally under the guidance of PBCC leader Bruce Hales, providing a comprehensive curriculum for PBCC children. The operation of the schools was financed through a combination of tax-deductible donations from PBCC members and government subsidies. At the time of the incident in Auckland, there were approximately 9,000 children attending PBCC schools, with the largest numbers in the UK, New Zealand, Australia, Canada, and the USA.

For the sake of simplicity, I will refer to the PBCC school trust as OneSchool Global (OSG). During the events in Auckland, the local trust was known as the Hillsborough Education Trust, but all PBCC education trusts globally were rebranded as OneSchool while this ordeal was ongoing. The key players in Auckland were as follows:

The Donor: The Auckland brethren (PBCC members) and their businesses, as well as the NZ Government.

The Charity: OneSchool Global, the PBCC schooling system catering to Brethren children.

The Operator: Gareth and Charles Hales, who served as directors of the global construction company Unispace and were the sons of Bruce D Hales, the global PBCC leader. Local Unispace Directors were also in on the scheme.

In 2013, the Auckland OSG trustees received formal notification that their campus's senior school had been selected as one of three locations for piloting a new Learning Centre. This initiative originated from the PBCC's HQ in Sydney, Australia, where PBCC leader Bruce Hales and his sons reside. Unispace, which is Gareth and Charles Hales's business, would undertake the project. The trustees were informed that the estimated cost for the project would be around $320,000.

The message conveying this information came from Neville Simmons, who served as both a Unispace director, an OSG trustee, and the de facto leader of the Auckland congregation of the church. Notably, Neville requested that this message not be recorded in the trust minutes.

However, when Unispace presented the invoice at an early stage of the project, it amounted to $647,000 instead of the $320,000 quoted verbally by Neville Simmons.

Steve Simmons was outraged and sought an independent estimate from a quantity surveyor for the work. The estimate came out to be only $180,000. Steve also reviewed the costs for individual line items on the Unispace invoice, such as carpet, chairs, and the fire-alarm system. He discovered that all of these were charged at approximately three times the commercial rate. For instance, the students' chairs were priced at about $1700 each.

As the trustee responsible for finance, Steve strongly objected, insisting that alternative quotes should be obtained. However, his objection was met with public humiliation. Neville and another trustee, Greg Mason, who was Neville's brother-in-law and fellow church leader, angrily dressed Steve down in front of the entire trust for a duration of about half an hour. They accused Steve of disloyalty to PBCC leadership and claimed that Bruce Hales, the global leader of PBCC, was furious.

Despite Steve's objections, his concerns were dismissed, and the other trustees aligned themselves with the directions from "Sydney". Unispace completed the work, and the charity paid them the full $650,000, diverting at least $450,000 of charitable funds, which were originally intended for the Brethrens' children, into the pockets of the Hales family and their business associates.

A couple of years later, a new directive regarding education was issued by PBCC HQ in Sydney. The junior schools were required to adopt an open plan, moving away from the individual classroom system. The project involved removing walls, installing structural beams, and converting the space into a single large room. Unispace was once again assigned the task, requesting a payment of approximately $35,000 from the Auckland trust solely for providing a quotation. The quotation arrived, totalling around $1.3 million, along with a demand for approval within two days.

Since the Trust had depleted its funds by this point, Steve managed to convince the trustees that they should undertake the work themselves, utilizing volunteer labour from the local congregation. The project was successfully completed for a cost of about $35,000, the same amount they had paid Unispace merely for the quotation fee.The quotation fee was never refunded.

Shortly after this incident, Steve was forced off the school trust. He continued to raise concerns with leading Auckland brethren about Unispace's exorbitant overcharging and misappropriation of charitable funds. Consequently, Steve was "shut-up" in 2020 and "withdrawn from" in 2022. These two stages denote excommunication from the PBCC.
"Shut-up" meant that Steve could no longer attend Church services and had to live, eat, and sleep separately from his wife and children. "Withdrawn from" entailed a complete physical and spiritual severance from the church and its members, with no social contact permitted. Naturally, these circumstances led to complete estrangement from parents and children and results in marital divorce.

Steve was not the only PBCC member in New Zealand concerned about the monopoly of Unispace. Mike Powell, a highly-qualified PBCC accountant from Hamilton, apparently also expressed serious concerns about conflicts of interest and breaches of tax and charity law in the relationship between Unispace and OneSchool in a letter to Bruce Hales.

However, Mike was forced to withdraw his email under threat of excommunication. The Hamilton congregation was called together for a special administrative "Assembly Meeting" to withdraw from him. The congregation waited for a long time while the PBCC priests pressured Mike to sign a retraction of his allegations and a non-disclosure agreement (NDA). Eventually, Mike caved under the pressure, the congregation was dismissed, and Mike remained in the PBCC, unable to speak out.

The Unispace grift extended beyond school campuses. In an incident in Auckland, the New Zealand national headquarters for OneSchool Global rented a whole floor of an upscale office building owned by church leader Peter Bishop. During the office setup, Neville Simmons had the partially completed installation ripped out and replaced by a very expensive and luxurious interior by Unispace, of which he was a director. Both the cost of the Unispace fit-out and the ongoing rent to Peter Bishop were charged to the charity, OSG, and paid for with funds donated by the Brethren for children's education.

What happened globally

The Auckland Learning Centre and two similar learning centers in NSW, Australia - the Illawarra Campus in Darkes Forest and the Sydney campus in Oatlands, were pilot projects for a new teaching approach in OSG. The plan was for senior students to spend much of their time working autonomously in an open-plan setting rather than being taught by traditional teachers in a classroom. To implement this new system worldwide, every OSG campus would need to construct a new Learning Centre with special desks, furniture, and computer systems.

The two other pilot learning centers in Australia were also constructed by Unispace at a cost similar to the Auckland project. Once these pilot projects were deemed successful, all 120 or so OSG campuses globally were instructed to follow suit. While the exact details of every case are unknown, according to Steve Simmons, the following occurred:

"A month or two after our Learning Centre was finished, Bruce Hales travelled to the UK for several big education strategy meetings. Senior trustees from around the world were present. During one of these meetings, Bruce explicitly stated that every Learning Centre project at each campus worldwide should be exclusively assigned to Unispace.
Essentially, he ordered his followers from across the globe to give his company (or perhaps his sons' company) millions of dollars' worth of projects at significantly inflated prices. Then he returned to the UK a few months later for another major education meeting. At the meeting, a few senior trustees from our campus were present, although I can't recall the specific names. Whoever it was, they provided our trust with an overview of what had been discussed during their trip. I distinctly remember them sharing about some brothers in the UK who had dared to seek quotes from companies other than Unispace. It is worth noting that Unispace's pricing was exorbitant, and it would have been much easier to find much cheaper options elsewhere. Nevertheless, the point that was emphasized to our trust, possibly directed at me, was that 'the brothers who did that could consider themselves lucky to still be in fellowship.'"

If we multiply the $450,000 that Unispace took from each pilot project by the 120 campuses worldwide, the total comes to $54 million. This figure is solely for the Learning Centres. If we also consider the Junior School projects, the national HQ office renovations, and the potential construction of entirely new campuses in some locations, the overall amount of money channelled from the brethren, through OneSchool Global and Unispace, into the pockets of the Hales family, could easily reach around $80 million. All of this occurred in a span of approximately six years, from 2014 to 2020.

To put this into perspective, stealing $80 million is equivalent to taking $1,450 from each PBCC member, $250,000 from each congregation, or nearly $8,500 from every OSG student.

How Unispace was sold and what replaced it.

In March 2021, Unispace was sold to PAG Asia Capital for $300 million. The value of a business is typically calculated as a multiple of its annual profits. Therefore, the six years of highly profitable work for OneSchool Global that preceded the sale likely greatly increased Unispace's sale price. However, it is unclear whether PAG Asia Capital was aware that the loyalty of OneSchool Global to Unispace was coerced rather than a free market decision. It seems probable that Gareth and Charles Hales significantly multiplied their gains through what is known as a "pump and dump" scheme, where the value of a business is artificially inflated through contrived transactions before its sale.

One division of Unispace, Unispace Health (later rebranded as Santé Global), remained under the ownership of the Hales brothers and became the largest recipient of Covid PPE contracts from the UK Conservative government's illegal VIP lane single-source procurement process. This totalled £680 million (NZ$1.4 billion). An investigation conducted by anti-corruption whistleblower the Good Law Project revealed that the Unispace contracts were facilitated by Cabinet Minister Michael Gove. Freedom of Information requests showed that a "founder" of Unispace, whose name has been redacted, spoke to Gove and subsequently sent an email outlining their offer later that day, expressing prayers for Gove and the Conservative party during a challenging time.

The sale of Unispace may appear to have left the Hales family without a means to exploit OneSchool Global's income. However, this is not the case. When the office fitout division of Unispace was sold, many employees transitioned to other large businesses within the Brethren network operating in the same market. A number of these businesses are connected to the Hales family and are now competing with Unispace, potentially violating the terms of the sale. These businesses can continue to coercively obtain contracts from OneSchool Global and funnel the proceeds back to the leading Hales family within the Plymouth Brethren Christian Church (PBCC). Furthermore, by distributing the operation across multiple businesses, the common factor of Hales control is less apparent, making the scam more difficult to detect.

Another important point to note is that OneSchool Global is just one of many entities from which the Hales can extract profits within the PBCC "ecosystem". A significant portion of funding for OneSchool Global flows through the Universal Business Team (UBT), the finance arm of the PBCC. UBT provides phones, computers, accounting, consultancy, legal insurance, and conference services for all 55,000 brethren and their 3,000 businesses globally. Additionally, there is Campus&Co, a global members-only supermarket chain owned by UBT, which aims to capture the majority of PBCC members' and businesses' grocery spending. Furthermore, there is OneMedifund, which provides health insurance for all members and various other initiatives that purportedly donate all profits to OneSchool Global.

Each of these enterprises can be exploited using the same process as was employed at the OneSchool Global Auckland campus. They are all ultimately controlled by the Hales family, and if instructed to purchase goods and services from a specified supplier, they would do so unquestioningly. It is highly likely that the Hales family receives kickbacks from phone and computer manufacturers for directing captive customers their way.

One intriguing aspect is that Campus&Co is specifically mandated to purchase all its wines and spirits from a business called Vendimia, a for-profit corporation owned by prominent PBCC members. The purpose behind this strict limitation is unclear, unless it is intended to divert profits to the PBCC leadership.

#oneschoolglobal
#garethhales
#plymouthbrethrenchristianchurchImage

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