NSW bankrupt sentenced following property disposal and making a false declaration

A New South Wales man has been sentenced to 18 months imprisonment after pleading guilty to 2 counts of disposing of property within 12 months of filing for bankruptcy. The court also took into account 1 count of making a false declaration.

This result follows an investigation by the Australian Financial Security Authority (AFSA).

Mr Joseph Abouchabake was convicted in the Downing Centre District Court, Sydney and sentenced to 18 months imprisonment for his offending to be released on recognisance after serving 6 months.

In handing down his judgment, District Court Judge Robert Newlinds SC highlighted the serious nature of breaches to the Bankruptcy Act 1966 (Cth).

“It is necessary that the general public understand breaches of the Bankruptcy Act will, if they come to the attention of the courts, be treated as serious crimes,” he said.

Mr Abouchabake was declared bankrupt in November 2018. In administering Mr Abouchabake’s estate, the Registered Trustee discovered that within 12 months prior to bankruptcy, Mr Abouchabake had disposed of the proceeds from the sale of a property and also made withdrawals from credit cards and disposed of the withdrawn amounts.

Mr Abouchabake subsequently made a false declaration on his Statement of Affairs by not declaring his previous bankruptcy and understating the total proceeds received from the sale of the property.

AFSA National Manager Education, Surveillance and Enforcement, Mr Neville Matthew, said taking action to deter bad behaviour is critical.

“AFSA is committed to acting against misuse to protect trust and confidence in the personal insolvency system,” Mr Matthew said.

“Under the Bankruptcy Act, it is an offence to dispose of property within 12 months of applying for bankruptcy with the intent to defraud creditors.”

“By failing to provide accurate information, Mr Abouchabake impaired the administration of his estate and disadvantaged the people and businesses who were owed money.”

The matter was prosecuted by the Commonwealth Director of Public Prosecutions on behalf of AFSA.

Suspected wrongdoing, criminal misconduct, dishonesty, or fraud in a personal insolvency can be reported to AFSA at Reporting a tip-off. Tip-offs can be made anonymously.

Sentencing information:

Mr Abouchabake pleaded guilty to 2 counts under the Bankruptcy Act 1966.

• Counts 1 – 2: Dispose of property within a period of 12 months after the disposal of that property a petition for bankruptcy was presented, contrary to subsection 266(3) of the Bankruptcy Act.

One count of knowingly making false declaration in statement of affairs contrary to subsection 267(2) of the Bankruptcy Act was also included on a schedule and considered in the overall sentence for counts 1 and 2.

An aggregate term of 18 months imprisonment was imposed, with the offender to be released on recognisance after serving 6 months.

You can read the full sentencing here: R v Abouchabake - NSW Caselaw