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A pre-insolvency adviser, registered trustee and a bankrupt person have now had their offices searched by the Australian Federal Police following suspicion of fraudulent activity.
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AFP executes search warrants on insolvency adviser, trustee
05 March 2021
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9 minute read
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The suspected fraud was uncovered after the Australian Financial Security Authority (AFSA) first commenced an investigation in July 2020 into allegations that a bankrupt person made a false declaration in their Statement of Affairs, made false statements in official documents submitted in relation to the bankruptcy, and disposed property before the start of the bankruptcy.
During the bankruptcy, a registered trustee and a pre-insolvency adviser were alleged to have helped the bankrupt person to manipulate the outcome of a creditors’ meeting, leading to the annulment of the bankruptcy.
AFSA’s investigation also found that some debts claimed appeared to be illegitimate.
Following the findings, the AFSA, accompanied by members of the Australian Federal Police, and the Queensland Police Service executed three warrants across Brisbane, Gold Coast and the Sunshine Coast, seizing records from the registered trustee’s office, the pre-insolvency adviser’s office and the debtor’s premises.
AFSA’s deputy chief executive, Gavin McCosker, said any attempt to undermine the personal insolvency system would be dealt with firmly by the regulator.
“Manipulating the outcome of a creditors’ meeting is a method that has been used by dodgy insolvency advisers before,” Mr McCosker said.
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“In this circumstance, the alleged actions of those involved — the person who was bankrupt, the trustee and the adviser — have had a significant impact on genuine creditors, greatly reducing the funds available to them.
“Our personal insolvency system relies on the integrity of all involved, from leaders in the profession to those simply seeking a fresh start after declaring bankruptcy.”
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