Media release: Salvatore Sgherza fined for withdrawing funds and incurring debt before filing for bankruptcy

Mr Salvatore Sgherza, also known as Sam, was sentenced in the Adelaide Magistrates Court on 6 August 2019, after pleading guilty to four charges under the Commonwealth Bankruptcy Act in June 2019.

Mr Sgherza pleaded guilty to making cash withdrawals totalling more than $270,000 from his bank accounts, and incurring over $40,000 in credit card debt, in the months prior to filing for voluntary bankruptcy. Based on his circumstances at the time, Mr Sgherza had no reasonable expectation that he would be able to repay the debts.

Mr Sgherza told his bankruptcy trustee that he used some of the money to fund a holiday to Queensland.

Mr Sgherza also pleaded guilty to making a false declaration in his Statement of Affairs form filed with the Australian Financial Security Authority (AFSA), the Australian Government’s personal insolvency regulator, and not fully and truly disclosing information about his financial affairs to his bankruptcy trustee.

During his bankruptcy, which spanned August 2012 to August 2015, Mr Sgherza failed to provide information to his trustee about his ownership and sale of three luxury vehicles, a Ferrari, Aston Martin, and Maserati, and how the sale proceeds were used. He also failed to provide information about bank transactions identified by the trustee.

His Honour, Magistrate D.H.B. McLeod, imposed a $2,500 fine against each of Mr Sgherza’s four convictions.

In sentencing, Magistrate McLeod noted Mr Sgherza’s lack of criminal history, the impact of changing economic conditions on the value of his assets, and his early guilty pleas.

Magistrate McLeod also stated that Mr Sgherza had worked hard to try to settle his debts and avoid bankruptcy.

Gemma Denton, Director of AFSA Enforcement explained that AFSA is a fair, but firm regulator.

“We support informed decision-making among some of the most vulnerable in our community and enable those with unmanageable debts to obtain relief,” Ms Denton said.

“However, when serious misconduct is identified, we investigate and work with the Commonwealth Director of Public Prosecutions to prosecute those who do not comply with the law.

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

Timeline of events:

February 2012

A civil judgment for more than $3.7 million was granted against Mr Sgherza in the Supreme Court of South Australia.

June/July 2012

Mr Sgherza met with his future bankruptcy trustee and stated he was insolvent and could not pay the debt. He was advised in general terms about bankruptcy.

July/August 2012

Mr Sgherza made eight cash withdrawals totalling more than $270,000 from his bank accounts. He also contracted 37 credit card debts totalling more than $40,000, without any expectation of being able to pay those debts.

Mr Sgherza filed for voluntary bankruptcy on 30 August 2012.

August 2015

Mr Sgherza was discharged from his bankruptcy on 31 August 2015.

June 2016

The Commonwealth Director of Public Prosecutions filed criminal charges against Mr Sgherza, related to breaches of legislation administered by AFSA.

June 2019

Mr Sgherza entered a plea of guilty to all charges in the Adelaide Magistrates Court.

August 2019

Mr Sgherza was sentenced in the Adelaide Magistrates Court. His Honour, Magistrate D.H.B. McLeod, imposed a $2,500 fine against each of the four convictions.

Useful links:

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.

Statement of Affairs

Form required as part of bankruptcy process.

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