Untrustworthy advice has real consequences for Queensland couple imprisoned for serious bankruptcy offences
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The Australian Financial Security Authority (AFSA) is warning members of the public to be wary of red flags and promises that are too good to be true, as dodgy pre-insolvency advisors look to benefit from people facing financial difficulty.
Deliberate misconduct and non-compliance, sometimes as a result of dodgy advice, can result in individuals committing crimes.
In July 2022, a Queensland couple faced Brisbane District Court charged with several offences under the Bankruptcy Act, following an investigation by AFSA.
Property developers Neale Francis Kretschmann and Christine Anne Kretschmann were facing bankruptcy in late 2011. To avoid losing control and ownership of their property, the couple made several false declarations which prevented their estate being administered effectively. They also disposed of property to defraud their creditors before and during their bankruptcies, which commenced in June 2012.
The couple were found guilty and each sentenced to two years’ imprisonment. They will serve a minimum of three months and will be subject to a two-year good behaviour bond upon release.
While no charges were laid against any other individuals, some of the fraudulent behaviour was driven by untrustworthy advice. During AFSA’s investigation, the couple were given the opportunity to disclose their affairs and provide information about the advice they’d received – but they declined.
AFSA’s Chief Executive, Tim Beresford, reinforced the importance of integrity and transparency when navigating bankruptcy.
'We understand that experiencing financial difficulty can be stressful, but those who deliberately misuse the system will be held accountable.'
'Complying with your legal obligations and cooperating with your trustees will provide the best outcome for your financial situation.’
'Be wary of anyone promising a quick way out of your financial difficulties.'
AFSA recently released a report, Untrustworthy Advisors: A hidden scourge in Australia’s personal insolvency system, highlighting the prevalence of, and consequences of dealing with, untrustworthy advisors.
The report illustrates how individuals in vulnerable and stressful positions, can take untrustworthy advice and find themselves in bankruptcy, but also potentially facing criminal prosecution by the Commonwealth Director of Public Prosecutions.
‘If you believe you’ve taken untrustworthy advice, contact us and cooperate in giving evidence against the advisor,’ Mr Beresford said.
‘In this case, the individuals decided not to provide any further information – leaving them to pay a heavy price for the dodgy advice they acted on.’
More information about untrustworthy advisors, including the red flags to look for and information on where to get trustworthy insolvency advice, is available on the AFSA website: afsa.gov.au/untrustworthyadvisors