A Central Coast business owner, Shaun Clapham, has pleaded guilty to two charges under Commonwealth bankruptcy law in the Gosford local court.
The charges relate to lodging an untrue document, with the intent to defraud formal bankruptcy proceedings.
Mr Clapham, the sole director of SLD Constructions Pty Ltd, lodged false proof of debt documents in the bankruptcy of an acquaintance. By lodging proof of debt documents, Mr Clapham was claiming to be one of the bankrupt’s creditors, which would give him a voting right in how the bankruptcy was handled.
Mr Clapham lodged the proof of debt documents with the assistance of a financial advisory firm.
The debt, in the form of an unpaid invoice for $5,300, was for construction work at a property in Wamberal, on the NSW Central Coast. Both Mr Clapham and the bankrupt claimed that drainage works, fencing and repairs to retaining walls had taken place.
An investigation by the Federal personal insolvency regulator, the Australian Financial Security Authority (AFSA), found that the property was in fact a vacant lot. Following the investigation, the false proof of debt claims were withdrawn.
On 12 November 2019 Mr Clapham was convicted and ordered to enter into a recognizance – with $1,000 as security – that he would be of good behaviour for 18 months.
AFSA Director of Enforcement, Gemma Denton, stressed the importance of honesty when participating in the bankruptcy process.
“While bankruptcy can be an overwhelming process for individuals, it is crucial that all dealings between trustees, creditors and debtors are honest and factual,” Ms Denton said.
“Deliberately misleading the bankruptcy process is a serious offence and must be treated as such.”
“Had the false proof of debt claims been accepted, Mr Clapham may have been able to exercise voting rights and drastically changed the outcome of the bankruptcy – to the detriment of genuine creditors.”
“Our investigation of the bankrupt and the advisor involved continues.”
“AFSA encourages people who have information about potential fraud in the personal insolvency system to submit a tip-off on our website.”
Mr Clapham was convicted of two charges under s263(1)(d) of the Bankruptcy Act 1966 (Cth).
In 2018-19, 96 persons were prosecuted for a total of 145 charges during the year. Of those charges, 11 were withdrawn, 122 proven with conviction, 4 proven without conviction, 7 were dismissed and 1 not proven.