A baker had his identity stolen and was unwittingly convicted of corporations offences after falling into the clutches of a syndicate allegedly at the centre of a massive tax evasion scam, a court has been told.

The baker was one of a number of vulnerable people — including homeless people and drug addicts — who were used by the scheme's alleged mastermind as "dummy" directors, installed to allow business owners to cheat the tax office and other creditors of more than $100 million.

The revelations came in the first day of marathon public hearings into the activities of former bankrupt and struck-off accountant Philip Whiteman, who is accused of being behind the scheme.

The alleged scheme involved stripping businesses of their cash and assets in order to cheat the tax office and other creditors, then starting them up under a different name. The dummy directors are installed to shield the real directors from liquidators, creditors and the Australian Securities and Investments Commission (ASIC).

The practice is estimated to cost the Australian economy more than $5 billion a year and has been made possible by gaping holes in the regulatory system.

Phillip Whiteman in October 2017 during a raid by the ATO. ( Supplied )

The public examinations — believed to be the largest carried out by a liquidator in Australia — will run for months and will see Mr Whiteman and 44 of his associates, employees and alleged victims forced to answer questions about his operations.

The first witness was Geelong baker Barry Santoro, who in 2015 was struggling to keep his business afloat and had fallen into arrears with his rent.

Mr Santoro's solicitor referred him to an associate of Mr Whiteman's — a disgraced liquidator and former bankrupt called Andrew Dunner, who was convicted last year of rorting the Federal Government's employee entitlement guarantee scheme.

Mr Santoro told the court Dunner offered to negotiate with his landlord over the outstanding rent, but then told him that the negotiations had been unsuccessful and that Mr Santoro now owed fees to Mr Whiteman's company.

Geelong baker Barry Santoro leaves the Federal Court in Melbourne with his wife. ( ABC News: Scott Jewell )

Dunner allegedly told Mr Santoro he could work the fees off by acting as a director of two companies: a horse training business and an Indian restaurant.

Mr Santoro agreed and gave Dunner his driver's licence details. He also signed some undated documents at Dunner's behest.

Later Mr Santoro began to receive fines and other correspondence in relation to more companies, which Dunner allegedly told him to ignore.

However, Mr Santoro was charged by ASIC over his failure to provide books and records for one of the companies of which he was an unwitting director.

Mr Santoro told the court he was unaware he had been charged. Instead, a lawyer working for Mr Whiteman appeared in court claiming she represented Mr Santoro, and pleaded guilty on his behalf, expecting the baker to receive a slap on the wrist.

Mr Santoro was convicted and fined thousands of dollars.

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The court was then shown email correspondence seized during raids on Mr Whiteman's offices in which his panicked employees discuss how to try and stop the ASIC legal proceedings.

Ben Gibson, a barrister for accounting firm Pitcher Partners, which is carrying out the examinations on behalf of the ATO, also showed Mr Santoro a number of corporate documents purportedly signed by him, and which Mr Santoro said were forgeries.

The court was also shown a number of documents lodged with ASIC by Queensland liquidator Travis Pullen, who wound up one of the companies Mr Santoro was allegedly appointed director of without his knowledge.

In one of the documents, Mr Pullen said he was appointed to liquidate the company by the director — Mr Santoro — but Mr Santoro told the court he had never spoken to Mr Pullen.

The court was shown a letter from Mr Pullen to Pitcher Partners in which he acknowledges that there were "strong signs" that a dummy director was being used in that case.

Homeless man unwittingly made company director

The ABC first revealed the activities of Phillip Whiteman in 2016, reporting the case of Christopher Somogyi, a homeless man who was made the director of a number of Mr Whiteman's clients' businesses without his knowledge.

Christopher Somogyi, leaving the Federal Court, was installed as a dummy director of multiple companies by Phillip Whiteman. ( ABC News: Scott Jewell )

Mr Somogyi gave evidence on Monday that he been hit with more than $6 million in director penalty notices and other fines as a result, and that his Centrelink payments had been repeatedly cut off because of the mistaken belief that he was the genuine director of these companies.

Mr Somogyi said he received penalty notices as recently as March, despite the ABC reporting more than 18 months previously that his identity had been used to sign him up as the director of companies without his knowledge.

Mr Somogyi was also shown documents seized in the raids on Whiteman's offices with his purported signature on them, and told the court that his signature was clearly forged.

A third witness, Kevin Verapen, said he had come into contact with Whiteman when his former partner worked for him, and that Whiteman had asked if he was interested in an "opportunity", which involved acting as a director of a number of companies that were going through "restructuring".

When asked by Mr Gibson whether he felt uneasy about the offer, Mr Verapen replied: "He presented himself as very knowledgeable. He reassured me. He said he'd been doing it for a very long time, and I just trusted that he was aboveboard."