Five-time bankrupt Mardirian jailed: Failed to disclose bankruptcy while borrowing $1.9m

Today, Mr Kervope (Ken) Mardirian was sentenced in the County Court of Victoria to three years and nine months’ imprisonment. Mr Mardirian pleaded guilty to three charges under Commonwealth bankruptcy laws, for obtaining almost $2 million in credit without informing the lender that he was an undischarged bankrupt.

Mr Mardirian is currently serving a prison sentence for unrelated fraud offences. Between November 2014 and April 2015, Mr Mardirian borrowed more than $1.9 million from a woman he was in a relationship with, claiming the funds would be used for investing in business ventures. He also borrowed $17,000 from a small business owner in November 2013.

The offences occurred during Mr Mardirian’s fourth bankruptcy, which commenced on 24 July 2012. He was declared bankrupt for a fifth time on 3 May 2018 and remains an undischarged bankrupt.

After several requests for the money to be repaid, the woman received a total of $143,100 in small payments over a period of time. The small business owner received the full amount of $17,000 after repeated requests.

Mr Mardirian, one of very few multi-time bankrupts, failed to disclose his bankruptcy status to either party prior to obtaining the loans, as required by law.

An investigation by the Australian Financial Security Authority (AFSA) found that the money loaned to Mr Mardirian was mostly transferred to Crown Casino accounts, or was withdrawn in cash.

The matter was prosecuted by the Commonwealth Director of Public Prosecutions.

After pleading guilty to the three offences, Mr Mardirian was sentenced to three years and nine months in jail from today, served in parallel with his existing sentence. He will be eligible for parole after serving two years and six months in jail.

He was also ordered to repay the woman he had the relationship with more than $1,796,000.

In sentencing, Judge Murphy stated that Mr Mardirian’s conduct as an undischarged bankrupt was unacceptable and an egregious breach of trust. His Honour took into account Mr Mardirian’s criminal history, including previous fraud-related offences, as relevant to his moral culpability. His Honour further stated that general deterrence was very important, that such behaviour ought to be denounced and that specific deterrence was salient.

The Director of AFSA’s Enforcement team, Ms Gemma Denton, explained the seriousness of the offences.

“Someone who has become bankrupt must make a considered effort to meet their legal obligations,” Ms Denton said.

“This includes informing others of their bankruptcy when borrowing money, or obtaining goods and services from them over a prescribed amount.

“Mr Mardirian’s failure to disclose his bankruptcy to those lending him significant amounts of money is a concern to AFSA as the personal insolvency regulator. The obligation of a bankrupt person to inform others of their bankruptcy status in these circumstances allows them to make informed decisions.

“We worked closely with the Commonwealth Director of Public Prosecutions to pursue this conviction. AFSA remains committed to investigating and prosecuting those who wilfully do not meet their requirements under bankruptcy laws.”

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Useful links:

Bankruptcy Act 1966 (Cth)

Mr Mardirian pleaded guilty to three charges under section 269(1)(a) of the Bankruptcy Act 1966 (Cth).

AFSA Enforcement snap-shot 2018-19

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.

Media contact:

Please email media [at] afsa.gov.au or phone 0408 105 665.