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Pre-insolvency advisers lands in prison for money laundering

A former pre-insolvency adviser has been sentenced at Brisbane District Court to five years in prison with a non-parole period of 22 months, after pleading guilty to money laundering.

Pre-insolvency advisers lands in prison for money laundering
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  • Maja Garaca Djurdjevic
  • March 02, 2020
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An ASIC investigation found that in October 2014, Stephen O’Neill and John Narramore of SME’s R Us advised Richard Ludwig, a former director of Cap Coast Telecoms, to engage in activity that would involve the illegal removal of company assets to prevent creditors from accessing these assets.

Between October 2014 and January 2015, O’Neill and Narramore issued fictitious invoices from companies under their control to their client, Cap Coast Telecoms, and arranged for $743,050 to be transferred from Cap Coast Telecoms’ bank accounts to the bank accounts of companies under their control.

O’Neill and Narramore then transferred the funds to Mr Ludwig or his associates, following which Cap Coast Telecoms was wound up. At the time, it owed creditors $2,955,128.

In delivering the sentence, Judge Rosengren found that O’Neill’s offences were of a serious nature, and that he carried them out for financial gain. Judge Rosengren found that O’Neill understood the criminality of the offences and that the transactions were made to defeat creditor interests and to undermine the liquidator.

Following sentencing, ASIC commissioner John Price again emphasised ASIC’s commitment to ensuring creditors have access to company assets during insolvency proceedings.

“Companies in financial distress trust advisors to provide sound and ethical advice,” said Mr Price.

This outcome demonstrates that when pre-insolvency advisers provide illegal advice and facilitate criminal conduct, ASIC will act and the culprits will be jailed.  

Narramore, who also pleaded guilty, was sentenced to four and half years jail in November 2019 for his part in the criminal enterprise.

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

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