On 2 June 2020 Northern Territory man, Bernard Paul Dawson, was convicted in the Darwin Magistrates’ Court after he pleaded guilty to four charges under Commonwealth bankruptcy law.
Mr Dawson was prosecuted after he removed and disposed of over $100,000 just prior to his court-ordered bankruptcy. He also provided false information to his bankruptcy trustee, and failed to disclose his income and assets.
In October 2011, Mr Dawson withdrew $115,000 on the same day that a Creditor’s Petition was filed in the Darwin Federal Court. He later told his bankruptcy trustee that he spent the money on himself to maintain his lifestyle.
When entering bankruptcy, individuals are required to correctly complete a Statement of Affairs, which is filed with the Australian Financial Security Authority (AFSA).
AFSA found that Mr Dawson’s Statement of Affairs was missing important information about his creditors, bank accounts in his name, vehicles that he owned, and more. Mr Dawson also failed to disclose information about his income and living expenses to his bankruptcy trustee.
AFSA Deputy Chief Executive, Gavin McCosker, welcomed the conviction.
“The community must have confidence in the personal insolvency system for it to operate effectively,” Mr McCosker said.
“AFSA takes allegations of law-breaking very seriously. Where there is evidence of misuse, AFSA investigates and seek convictions to protect the integrity of the personal insolvency system.
“Mr Dawson’s actions have disadvantaged genuine creditors and reduced the likelihood that they will ever be repaid. Mr Dawson’s behaviour was not only dishonest, it was also illegal.”
The case was prosecuted by the Commonwealth Director of Public Prosecutions following a referral of a brief of evidence by AFSA.
Mr Dawson was made bankrupt by a court order in November 2011, after failing to respond to a Bankruptcy Notice. Mr Dawson was discharged from his bankruptcy on 24 December 2019.
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Charges and sentence:
Mr Dawson pleaded guilty to four charges under the Bankruptcy Act 1966 (Cth).
He was sentenced to four months imprisonment, wholly suspended on a condition that he be of good behaviour for 12 months.
In 2018-19, AFSA received nearly 2,000 referrals of alleged misconduct. We analysed each referral and found that 744 warranted further investigation. We referred 115 of these matters to the Commonwealth Director of Public Prosecutions.
In total, 96 individuals were prosecuted for offences under the Bankruptcy Act. Our prosecutions attracted wide-ranging penalties, from fines to imprisonment. The number of prosecutions decreased in 2018-19, down from 137 in the previous year. The overall value of proven fraud also dropped, down from $5.5 million in 2017-18 to $4.6 million.