A former business liquidator has been sentenced to seven year’s jail time after he was found to have committed three counts of fraud during the liquidation of a company in 2017.
As part of an investigation by the Australian Securities and Investments Commission (ASIC), the Queensland-based liquidator was sentenced on Friday after it was found he had redirected nearly $1,000,000 worth of funds from an external administration bank account into his own bank account.
Those funds were then used by the liquidator for his own personal use.
The company under administration at the time was property development company Neolido, which wound up in 2005, and had the liquidator appointed in 2010. The liquidator’s registration was suspended in 2018 pending the ASIC investigation into the missing $800,000.
Earlier this year, the liquidator’s registration was cancelled, and a disciplinary committee also ruled all other registered liquidators must not allow the committed liquidator to carry out any liquidation duties on their behalf for the next eight years. The charged liquidator pleaded guilty to all three counts of fraud.
“Liquidators must act honestly in the protection and administration of other people’s money. ASIC will continue to act against dishonest conduct and hold offenders to account,” ASIC Commissioner John Price said in a statement.
Upon sentencing the liquidator, Brisbane District Court Judge Farr said he had “committed a significant breach of trust as a court-appointed liquidator”, and, when referring to the liquidator’s own financial position, was “uniquely positioned to know what legitimate avenues were available in [his] circumstances but chose not to choose those options”.
ASIC takes action against dodgy liquidators regularly for flouting the rules, including a case in 2013 where a liquidator had his registration cancelled after he was sentenced to two year’s jail for lying to authorities about traffic offences. At the time, Price said honesty was an “essential trait for liquidators as gatekeepers in the financial services industry”.