Seven-time bankrupt jailed over fraudulent debts

On 26 May 2020 Western Australian man, John Derek Overton, was convicted in the Perth District Court after pleading guilty to 17 charges under Commonwealth bankruptcy law.

He was sentenced to two years and two months imprisonment.

Mr Overton, previously known as John Derek Elvey, is a multiple-time bankrupt with a history of starting companies, accumulating debt and then declaring bankruptcy when the debts need to be paid.

In February 2016, Mr Overton (as Mr Elvey) declared bankruptcy for the seventh time after submitting his Statement of Affairs to the Australian Financial Security Authority (AFSA).

After his bankruptcy was accepted, Mr Overton relocated from Queensland to Western Australia and registered a new business as an undischarged bankrupt under the false name of David Overton. In registering the business, he also unfairly implicated another employee – registering her as a Director of the newly-formed company without her knowledge or permission.

Between June 2016 and July 2017, Mr Overton fraudulently incurred more than $100,000 in debts and liabilities while bankrupt. On behalf of his business, PDC Services Australia, he sought lines of credit from 14 businesses across Western Australia – many of whom remain unpaid.

His Statement of Affairs was later found to have contained several false declarations relating to his relationship status, income, creditors and more. He also failed to declare several of his previous bankruptcies.

In sentencing, Judge Lemonis noted that Mr Overton’s past bankruptcies increased the seriousness of the offending, and recommended that he seek counselling while imprisoned to prevent reoffending.

AFSA Deputy Chief Executive, Gavin McCosker, highlighted the seriousness of these actions.

“Honesty is a key pillar of Australia’s personal insolvency system,” Mr McCosker said.

“Unfortunately, there are some individuals who choose to wilfully misuse bankruptcy laws, to the detriment of other individuals and their businesses.

“AFSA is a firm and fair regulator. We take allegations of misuse seriously and investigate accordingly.

“Where we find evidence of wrongdoing, we work with the Commonwealth Director of Public Prosecutions to seek convictions.

“Mr Overton’s disregard for Commonwealth bankruptcy law was so blatant that Judge Lemonis felt imprisonment was the only option. Hopefully this sentence serves as a warning to others who may be considering committing similar crimes.”

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Charges and sentence:

Mr Overton pleaded guilty to seventeen charges under the Bankruptcy Act 1966 (Cth).

He was sentenced to two years and two months imprisonment and will be eligible for release on a recognizance in April 2021.

Useful links:

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. 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.