In a statement outlining the conviction that doubled as a warning to all Australians, the Australian Financial Security Authority (AFSA) has highlighted that “disposing of property within 12 months of going bankrupt and making a false declaration are offences under Commonwealth bankruptcy law”.
James Brendan Nash was sentenced to a 12-month community corrections order that includes 120 hours of community service after he pleaded guilty to disposing of more than 30,000 shares held in a private company six months before he declared bankruptcy in April 2015.
He also disposed of five ordinary shares from a separate company “that would have potentially yielded a significant dividend” in January 2015.
AFSA said Mr Nash failed to declare that he had sold, transferred or given away shares in a private company in his statement of affairs.
He also did not declare his previous holding of a company directorship position.
The “serious nature of the charges warranted action”, according to the magistrate presiding over the matter, despite Mr Nash’s low risk of reoffending and guilty pleas.
AFSA’s deputy chief executive, Gavin McCosker, has reiterated the serious nature of any and all efforts to defraud Australia’s personal insolvency system, considering the authority as “a firm and fair regulator”.
“We take enforcement action against those who have broken the law to maintain the public’s confidence in the personal insolvency system,” he commented.
Taking alleged breaches of bankruptcy law seriously, the deputy chief executive noted that AFSA will investigate any issues and work with the Commonwealth Director of Public Prosecutors to seek convictions where evidence of wrongdoing is found.
“It is important that people entering into bankruptcy are honest with their trustee and provide accurate information about their financial circumstances,” he warned.
Mr McCosker said a failure to declare the sale or disposal of shares prior to bankruptcy disadvantages genuine creditors.
“Not only is it unfair, it is also illegal,” he said.
