The old trick of the trade of issuing post dated cheques has evolved with internet banking.

A local business man in Rockhampton was very well versed with this concept and proceeded to rip off a number of local suppliers in the vicinity of $80,000 to stock his business.

It all came apart when one of his suppliers lodged a creditor’s petition with the court for a debt he had accrued in the amount of about $26,000. Worrells was then appointed to his bankrupt estate.

The bankrupt went about his myriad of steel related businesses in providing steel construction material to bicycles. With little or no capital and/or credit standing he quite innovatively went about ‘manufacturing’ his own credit. He negotiated or perhaps simply offered to pay his trade creditors with an online transfer or bpay payment. He would then set up the transfer for a future date, take a copy of this and then on the scheduled day provide a copy of this to the supplier. Unbeknownst to them, the transfer had already been cancelled or would simply bounce from lack of available funds. This went on for some time, thanks to the good natured suppliers that went on in the vein of supplying in good faith.

In this case the bankrupt tried the scheme in a regional city around which word quickly spread. Several local creditors caught out by the bankrupts scam reported the bankrupt to local police at around the time of his bankruptcy. We have been assisting the police with their enquiries and identifying creditors impacted. The bankrupt was recently arrested and charged with 36 counts of fraud.

The man behind the bankruptcy action and ensuing criminal investigations knew he had no chance of recovering a penny from this man, but put his money behind the pursuit of truth and justice.

Unfortunately he and all the other creditors are correct in believing that they won’t be compensated as there are zero assets in the estate. Sub-contractors to the bankrupt’s businesses have also been left in his wake without remuneration.

As trustee, Worrells have submitted a’ Offence Referral Report’ to the Australian Financial Securities Authority (AFSA) which outlines his failure and negligence in disclosing the full extent of his creditors on his Statement of Affairs. If found guilty, the offence carries a possible imprisonment term of up to12 months. We have also lodged with AFSA an objection to discharge to extend his bankruptcy term to 8 years.

Suppliers should stand by a policy of no cash in their account = no stock.