Recent prosecution: QLD man convicted for hiding and spending $140k

On 28 February 2020, Queensland man Mr Nicholas Gannon was sentenced in the Caboolture Magistrates Court after he pleaded guilty to two charges under Commonwealth bankruptcy law.

Mr Gannon filed for voluntary bankruptcy in May 2013, owing creditors more than $1.3 million.

During his bankruptcy Mr Gannon received over $150,000 as an inheritance. Commonwealth law requires bankrupt people to let their trustee know if they receive money or assets during bankruptcy.

Mr Gannon didn’t tell his bankruptcy trustee about the money, and instead made several cash withdrawals. He also transferred money to friends and made a number of large purchases including racing car parts, supplements and furniture.

In total, Mr Gannon spent almost $140,000 that could have otherwise been used to repay his creditors.

Australian Financial Security Authority (AFSA) Deputy Chief Executive, Gavin McCosker, explained that despite AFSA’s intelligence gathering and monitoring systems, the community is a vital source of information.

“Mr Gannon knew that he was required to let his bankruptcy trustee know if he received any funds or assets while bankrupt,” Mr McCosker said.

“However, he chose to not only attempt to hide the money that he had received, he also went out of his way to spend it.

“The existence of the money was only discovered in November 2017, thanks to a tip-off from the community.

“We encourage anyone who suspects wrongdoing by a bankrupt person to submit a tip-off – they are a vital source of intelligence and can make a real difference.

“More information about tip-offs, and the online submission form, is available on our website at afsa.gov.au/tip-off.”

As a result of AFSA’s investigation, Mr Gannon repaid over $150,000. A dividend can now be paid to those who were owed money.

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

Mr Gannon was sentenced to 12 months imprisonment on each of the two charges. He was released on a recognisance of $3,000 to be of good behaviour for two years. He was also ordered to pay court costs.

In sentencing, Magistrate Blanch took into account Mr Gannon’s guilty plea, the lack of relevant criminal history and the fact that he had repaid the entire amount by the court hearing in February 2020.

Mr Gannon has since been discharged from his bankruptcy, effective 8 May 2016.

Useful links:

Bankruptcy Act 1966 (Cth)

Mr Gannon pleaded guilty to:

  • Disposal of property after bankruptcy contrary to section 266(1) of the Bankruptcy Act 1966 (Cth), and
  • Failure to fully and truly disclose to the trustee all of his property and its value, contrary to section 265(1)(a) of the Bankruptcy Act 1966.