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Bankrupt goes to prison over 'secret' bank account

Thursday, 14th March 2013

Michael Gerald Sheehy of Exeter was made bankrupt on 31 August 2010 with debts of £58,128.97 but at the time he was made bankrupt he failed to inform the Official Receiver (OR) that he still had money in a bank account, despite being informed of his duty to do so. By the time the OR found out about the 'secret' bank account, Mr Sheehy had removed rather a lot of money.

Mr Sheey pleaded guilty to three counts of removing money from his accounts and one count of failing to disclose these funds to the Official Receiver of The Insolvency Service and was sentenced to 12 months imprisonment on each count to run concurrently.

The secret bank account

From his secret bank account Mr Sheehy removed £3,500 in the two months prior to a County Court Judgement (CCJ) being obtained by HMRC. He removed a further £21,800 after the judgment had been obtained, but before his bankruptcy order and the final £12,300 he removed after the order was made. This is a total of £37,600.

Deputy Chief Investigation Officer Liam Mannall from the Department for Business Innovation and Skills said:

“The sentence should serve as a reminder to those considering such actions that the consequences are severe. The Department for Business Innovation and Skills will pursue and prosecute those who flout insolvency law by denying creditors access to payment for debts due.”

A Bankrupt’s responsibility

A bankrupt is required to provide information to the Official Receiver (OR) and his trustee in bankruptcy to allow his property to be collected and realised for the benefit of his creditors. It is an offence not to disclose property to the OR or trustee and not to mention things which are relevant to his affairs.

The press release from Insolvency Service covering the details of the offences can be found here

The honest bankrupt

Mike Thomas head and founder of DebtWizard.com said: "Those consumers who are honest and cooperative need not worry about going to jail. The vast majority of consumers who eventually go bankrupt are genuine individuals who are treated with respect and support by The Insolvency Service and go through bankruptcy without any repercussions. However cases like this send a clear warning to those who deliberately set out to cheat the system."

Further reading on how previous bankrupts have gone to prison.

Bankrupt goes to prison for hiding £23,000

Bankrupt faces prison and blames loan sharks for missing £50,000

Bankrupt estate agent gets nabbed for undervaluing his house and gambling away the profits

You can follow Mike on twitter by using @debtwizard



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