Mr Gregory Wayne
Davidson, lately of Clacton-on-Sea, was sentenced to 18 months
imprisonment this week (Tuesday 22 February) when he pleaded
guilty at Chelmsford Crown Court to obtaining money by deception,
putting his assets beyond the reach of his creditors and failing
to provide a satisfactory explanation for the same. The
prosecution by the Department for Business Innovation and Skills
followed a referral from The Insolvency Service.
Mr Davidson petitioned for his own bankruptcy on 20 July 2006
with debts exceeding £205,000. The initial routine investigation
by the Official Receiver into Mr Davidson’s financial affairs
leading up to the bankruptcy found that he could not provide a
satisfactory explanation for the transfer of £120,000 to a third
party at a time when he was insolvent and unable to pay his creditors.
The Official Receiver established that at the end of 2005 Mr
Davidson fraudulently applied for three loans. The first an
un-secured loan for £25,000 was paid directly into his account;
the second, a mortgage of £220,500 secured against his property in
Malvern Drive, Ilford, which after consolidation of other
mortgages resulted in a payment of £57,712 into his account and
the third, another mortgage of £119,930 that was also secured
against his property resulted in a payment of £44,931 into his
account. Due to the close proximity in time of the loan
applications a Land Registry search did not reveal the first
secured loan.
Mr Davidson then transferred the money, that he had obtained as a
result of fraudulent representations to the mortgage companies as
to his intention and ability to pay the loan, into his company
account and then via a number of transactions transferred £120,000
to who he claimed, was his ex-partner.
Commenting on the case Graham Horne, Senior Official Receiver for
The Insolvency Service said:
“People struggling with debt who want to benefit from the debt
relief arrangements offered by the insolvency regime must be
prepared to declare all of their assets or face the penalty
imposed on them. It is for the Official Receiver to decide which
assets should be sold for the benefit of the creditors and which
may be retained by the debtor.”
Ian West, Deputy Chief Investigation Officer for BIS said:
“The length of the sentence handed down to Mr Davidson sends a
clear and simple message - breaching bankruptcy laws and
fraudulent behaviour are serious matters that will not be
tolerated and anyone found guilty of these criminal offences can
expect a serious punishment.”
The charges Mr Davidson pleaded guilty to were:
On 17/01/06 Mr Davidson dishonestly obtained a money transfer of
£25,000 by deception, by falsely representing to Co-Operative Bank
PLC that he would repay the loan contrary to s15A Theft Act 1968;
On 20/01/06 he dishonestly obtained a money transfer of
£57,712.01 by deception, by falsely representing to GMAC Financial
Services that he would repay the loan contrary to s15A Theft Act
1968;
On 24/01/06 Mr Davidson dishonestly obtained a money transfer of
£44,931.85 by deception, by falsely representing to First Plus
Financial Group PLC that he would repay the loan contrary to s15A
Theft Act 1968;
Between 24/01/06 and 31/01/06, being in the five years preceding
bankruptcy, Mr Davidson fraudulently transferred £120,000 to
another contrary to s357(1) IA 1986;
Between 02/08/06 and 15/06/07 being a bankrupt and having been
required to do so by the Official Receiver failed without
reasonable excuse to provide a satisfactory explanation as to the
manner of the loss of a substantial part of his property, namely
£120,000 contrary to s354(3) IA 1986.
Mr Davidson was sentenced to an immediate custodial sentence: 18
months for each of the Theft Act offences; 6 months for the
fraudulent transfer; and 2 months for the failure to account. The
sentences will run concurrently. Confiscation processing are on-going.
Mr Davidson was made the subject of a Bankruptcy Restriction
Order in 2008 by Romford County Court, meaning that the
restrictions by which he must abide as a bankrupt have been
extended beyond the normal 12 months.
Notes to Editors
1. The Department for Business, Innovation and Skills prosecutes
a range of criminal insolvency cases in magistrates and Crown
courts across the country. Most of the cases are referred by The
Insolvency Service. 2. What is the role of the Official Receiver?
When a court has made an insolvency order (a personal bankruptcy
against an individual or a winding-up order against a company) the
Official Receiver, a civil servant of The Insolvency Service with
wide ranging statutory powers to obtain information, is
responsible for collecting and protecting any assets for the
benefit of creditors. When the Official Receiver thinks there is
cause to do so they can also investigate, in the public interest,
the conduct and financial affairs of the bankrupt for the period
leading up to the insolvency order being made. 3. What are
Bankruptcy Restrictions? These are restrictions set out in
insolvency law that the bankrupt is subject to until they are
discharged from bankruptcy – normally 12 months and include that
bankrupts:-must disclose their status to a credit provider if they
wish to get credit of more than £500;who carry on business in a
different name from the name in which they were made bankrupt,
they must disclose to those they wish to do business with the name
(or trading style) under which they were made bankrupt;may not act
as the director of a company nor take part in its promotion,
formation or management unless they have a court’s permission to
do so; may not act as an insolvency practitioner, or as the
receiver or manager of the property of a company on behalf of
debenture holders; may not be a Member of Parliament in England or
Wales. 4. What are Bankruptcy Restrictions Orders and Bankruptcy
Restrictions Undertakings? If the Official Receiver considers that
the conduct of a bankrupt has been dishonest or blameworthy in
some other way, he (or she) will report the facts to court and ask
for a Bankruptcy Restrictions Order (BRO) to be made. The court
will consider this report and any other evidence put before it,
and will decide whether it should make a BRO. If it does, the
bankrupt will be subject to certain restrictions for the period
stated in the order. This can be from 2 to 15 years. The bankrupt
may instead agree to a Bankruptcy Restrictions Undertaking (BRU)
which has the same effect as an order, but will mean that the
matter does not go to court. 5. The Insolvency Service administers
the insolvency regime, investigating all compulsory liquidations
and individual insolvencies (bankruptcies) through the Official
Receiver to establish why they became insolvent. The Service also
authorises and regulates the insolvency profession; deals with
disqualification of directors in corporate failures; assesses and
pays statutory entitlement to redundancy payments when an employer
cannot or will not pay employees; provides banking and investment
services for bankruptcy and liquidation estate funds; and advises
ministers and other government departments on insolvency law and
practice. Further information about the work of The Insolvency
Service is available from http://www.insolvency.gov.uk 6. Further
information about the work of The Insolvency Service is available
from http://www.insolvency.gov.uk Media Enquiries should be
directed to: Denise Rawls, Press Office Manager, Telephone 020
7674 6910 or Ade Daramy, Press Officer on 020 7596 6187
Contacts:
Ade Daramy
Phone: 020 7596 6187
ade.daramy@insolvency.gsi.gov.uk
Denise Rawls.
Phone: 020 7674 6910
denise.rawls@insolvency.gsi.gov.uk