Search warrants executed as trustee, pre-insolvency advisor and debtor suspected of fraud

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Yesterday, the Australian Financial Security Authority, accompanied by members of the Australian Federal Police (AFP) and the Queensland Police Service, executed three warrants in relation to suspected fraudulent activity by a registered trustee, an insolvency advisor and a bankrupt person.

Premises across Brisbane, Gold Coast and Sunshine Coast were searched, with records seized from the registered trustee’s office, the pre-insolvency advisor’s office and the debtor’s premises.

In July 2020, AFSA commenced an investigation into allegations that the person who was bankrupt made a false declaration in their Statement of Affairs, made false statements in official documents submitted in relation to the bankruptcy, and disposed of property before the start of the bankruptcy.

During the bankruptcy, a registered trustee and a pre-insolvency advisor are alleged to have helped the bankrupt person to manipulate the outcome of a creditors’ meeting, leading to the annulment of the bankruptcy. AFSA’s investigation indicate some debts claimed appear to be illegitimate.

AFSA’s Deputy Chief Executive Gavin McCosker highlighted the importance of honesty in all dealings with the personal insolvency system.

‘Manipulating the outcome of a creditors’ meetings is a method that has been used by dodgy insolvency advisors before,’ Mr McCosker said.

‘In this circumstance, the alleged actions of those involved – the person who was bankrupt, the trustee and the advisor – have had a significant impact on genuine creditors, greatly reducing the funds available to them.

‘Our personal insolvency system relies on the integrity of all involved, from leaders in the profession to those simply seeking a fresh start after declaring bankruptcy.

‘Any attempts to undermine the system, and use it unfairly, must be treated seriously to maintain trust.’

AFSA’s investigation in the matter is ongoing.

In addition to the warrants executed in relation to this alleged fraudulent activity, AFSA staff, accompanied by registered trustee Mr Innis Cull of Pitcher Partners, yesterday executed a Section 77AA notice at a Tweed Heads property for an unrelated bankruptcy.

The power was exercised following a pattern of non-compliance by the bankrupt person.

‘Section 77AA notices provide the Official Receiver with full access to records relevant to any personal insolvency administration,’ Mr McCosker said.

‘This information will enable the trustee of the bankrupt estate to progress investigations into the individual’s financial affairs.

‘Yesterday’s activities are examples of our commitment to use the full range of Inspector-General and Official Receiver powers to investigate allegations of non-compliance.’

More information about AFSA’s focus on untrustworthy advisors, including tips on how to identify dodgy advice, is available at