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Six months for bankrupt for removing monies from bank

Six months for bankrupt for removing monies from bank

Martin Wright, a bankrupt, has been jailed for six months after pleading guilty to two counts of removing money from his accounts to avoid the funds being used to repay debts. He was sentenced at Chelmsford Crown Court.

The conviction follows an initial investigation by The Insolvency Service and a full criminal investigation and prosecution by the Department for Business Innovation and Skills (BIS).

Mr Wright, 60, incurred a debt to Tendring District Council of £17,864.50, due to overpayment of housing and council tax benefits. The council wrote to Mr Wright requesting he repay this debt. Mr Wright could easily afford to do this, since in August 2009 he sold a property for £560,000 and received £327,376.55 proceeds from the sale.

However, Wright did not repay the debt but instead began removing money from his accounts. In the three weeks after he sold the property he withdrew £111,637.57, almost all of this amount in cash.

Due to his continued refusal to pay the debt, Mr Wright was made bankrupt by order of the court on 15 March 2010. By this date the remainder of the proceeds of sale, a total of £215,738.98, had been removed from his accounts but no payments had been made to the council.

The Insolvency Service reported Mr Wright’s conduct to the department for Business Innovation & Skills (BIS) to undertake Investigations and consider criminal proceedings. This resulted in Mr Wright pleading guilty on 27 November 2012 to two counts of removing money from his accounts to avoid funds being used to repay a benefits debt contrary to sections 357(3) and 350(6) of the Insolvency Act 1986.

Section 357(3) of the Insolvency Act 1986 makes it an offence for an individual to remove property after or within two months before an order or judgment for the payment of money is obtained against them, which remains unsatisfied at the date of bankruptcy.

Mr Wright was sentenced to six months immediate imprisonment on both counts, to run concurrently. In sentencing HHJ Gratwicke said that Mr Wright had a deliberate intent to deceive and avoid repaying money that he had illegally received. He said that Mr Wright was clearly a totally dishonest individual, prepared to take any step and that the only sentence could be imprisonment.

Deputy Chief Investigation Officer Ian West from the Department for Business Innovation and Skills (BIS) said: “The Department for Business takes very seriously those cases where debtors dishonestly dispose of assets and go bankrupt to avoid paying their creditors.

BIS investigate and prosecute a range of offences, primarily relating to personal or company insolvencies. They will only deal with complaints received from the Insolvency Service, Companies House and Companies Investigation Branch.

About The Author

Mark Hodgson is the Managing Director of Tremark Associates, one of the UK’s leading providers of investigative services. Mark has 30 years experience in private Investigations and the commercial debt recovery industries. He is Vice President of the Association of British Investigators, a member of the World Association of Detectives, The Institute of Credit Management and an associate member of R3 -The Association of Business Recovery Profession.