NSW bankrupt convicted of making false declarations

On 14 January 2020, Mr Lenridge Rosemeyer was convicted in the Gosford Local Court after pleading guilty to three charges under Commonwealth bankruptcy law.

He was ordered to enter a recognizance – with $1,000 as security – that he would be of good behaviour for 18 months.

The charges related to purposely making false declarations with the intent to defraud formal bankruptcy proceedings.

Mr Rosemeyer became bankrupt in July 2015 and lodged a Statement of Affairs which listed three unsecured creditors - Pearl Property, NAB and SLD Constructions Pty Ltd.

Mr Shaun Alexander Clapham, as the sole director of SLD Constructions, lodged a proof of debt statement in Mr Rosemeyer’s bankruptcy, claiming that he was owed money for construction work at a property in Wamberal. Both Mr Clapham and Mr Rosemeyer claimed that drainage works, fencing and repairs to retaining walls had taken place at the property.

An investigation by the Australian Financial Security Authority (AFSA) found that the property was a vacant lot, and that no work had ever taken place. The false proof of debt claims were subsequently withdrawn in August 2017.

By lodging false proof of debt claims, Mr Clapham attempted to gain voting rights in Mr Rosemeyer’s bankruptcy, which could have unfairly disadvantaged genuine creditors.

Mr Clapham, who was convicted under Commonwealth bankruptcy law in November 2019, was also sentenced to an 18-month good behaviour recognizance.

Both cases were prosecuted by the Commonwealth Director of Public Prosecutions on behalf of AFSA.

In sentencing Mr Rosemeyer, Magistrate Railton emphasised that the seriousness of the charges meant that a conviction was needed, and noted that matters of these type are important for general deterrence.

AFSA Deputy Chief Executive, Gavin McCosker, explained that AFSA is a firm and fair regulator.

“AFSA takes any efforts to deliberately defraud the bankruptcy system seriously,” Mr McCosker said.

“But despite AFSA’s best monitoring and intelligence gathering activities, fraud is not easy to uncover without the assistance of others. Identifying fraud is everyone’s responsibility.

“As I’ve said previously, everyone can play their part in supporting the integrity of the personal insolvency system by speaking up and reporting suspected fraud.

“In this instance two acquaintances, with the assistance of a financial advisor, have attempted to defraud genuine creditors.

“This behaviour is unacceptable and can negatively impact the community’s confidence in the personal insolvency system.

“AFSA continues to make enquiries into the conduct of the financial advisor.”

- Ends -

Charges:

Bankruptcy Act 1966 (Cth)

Mr Rosemeyer pleaded guilty to three charges under the Bankruptcy Act 1966 (Cth):

 Count

Offence

Description

Maximum Penalty

1

1 x s 267(2) of the Bankruptcy Act 1966 (Cth)

Signing a declaration contained within a Statement of Affairs, knowing that declaration to be false.

Imprisonment for 1 year.

2

1 x s 263(1)(d) of the Bankruptcy Act 1966 (Cth) and s 11.2 of the Criminal Code Act 1995 (Cth)

Aiding, abetting, counselling or procuring SHAUN ALEXANDER CLAPHAM to lodge a proof of debt that was untrue in any particular, with intent to defraud in any proceedings in a bankruptcy.

Imprisonment for 5 years.

3

1 x s 265(1)(g) of the Bankruptcy Act 1966 (Cth)

Failing to inform the trustee that a proof of debt lodged in proceedings of his bankruptcy was false.

Imprisonment for 1 year.

Useful links:

Related conviction: Shaun Alexander Clapham

Mr Clapham pleaded guilty to two charges under Commonwealth bankruptcy law in the Gosford Local Court in November 2019.

The charges related to lodging an untrue document, with the intent to defraud, in the formal bankruptcy proceedings of Mr Rosemeyer.

Personal Insolvency Compliance Report

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.

Pleasingly 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.