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Thursday 19 February 2015

15-031MR Gold Coast chartered accountant sentenced following ASIC investigation

Mr Paul Anthony Scott was sentenced today in the Brisbane Magistrates Court to eight months imprisonment, to be served by way of an intensive correction order, following an ASIC investigation.

Mr Scott, a Chartered Accountant of Southport, Queensland, pleaded guilty to charges first laid in September 2014 of one count of lodging false documents with ASIC and one count of obstructing ASIC.

ASIC's investigation found that on 27 occasions between 1 July 2010 and 30 March 2013, Mr Scott lodged documents with ASIC, concerning seven companies, that contained false and misleading information. The misleading information related to the citing of a fictitious person as a company director in various documents.

Mr Scott was also charged with one count of obstructing ASIC. The charge related to evidence that Mr Scott and his former business partner, Mr Graeme Dwyer, lied about the existence of a fictitious director, Mr Edwards, during questioning by ASIC and took other steps to obstruct the investigation.

Mr Scott and Mr Dwyer ran a pre-appointment insolvency business on the Gold Coast between 2010 and 2012.

Mr Dwyer created a fictitious identity - known as Mr Gary Edwards - and provided those details to Mr Scott who used the fictitious Mr Edwards to:

  • lodge false and misleading documents appointing Mr Edwards as a company director;
  • replace a real person acting in the role of director with the fictitious identity , and backdating the director appointment by 18 months, and
  • create other false corporate records using the fictitious identity including taxation and employment records. 

Mr Scott also used the fictitious identity to facilitate deeds of company arrangement for debts owed by three companies in external administration (collectively known as the Glowclose Group).

Messrs Dwyer and Scott had previously provided pre-appointment insolvency advice to the directors of these companies and four other companies, including Local Kids Pty Ltd (ACN 116 378 931) (Local Kids).

Following ASIC intervention, the court terminated the deeds and appointed independent liquidators to the companies (see 12-211MR for further background).

The Commonwealth Director of Public Prosecutions prosecuted the matter.

Background

In December 2013, Graeme Dwyer was sentenced to six months imprisonment, suspended upon entering in a $1,000 recognisance to be of good behaviour for a period of 12 months (refer 13-356MR).

ASIC's investigation into allegations that Mr Edwards was fictional and that false documents had been lodged with ASIC arose after it received a report of misconduct lodged by the liquidator of Local Kids, Mr Bruce Carter of Ferrier Hodgson.

As part of its Strategic Outlook 2014-15, ASIC said it would conduct a proactive risk-based surveillance of liquidators and pre-insolvency advisers to identify business models of unregistered operators who provide pre-appointment insolvency advice, especially those aimed at facilitating illegal phoenix activity.

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Last updated: 23/03/2016 03:10