Businessman sentenced to suspended jail term for making false IVA representations
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A jury at Manchester Crown Court has convicted a businessman of making false representations in an individual voluntary arrangement (IVA) proposal following a private prosecution brought by one of his many creditors.
Andrew John Camilleri, 37, was given a 12-month jail sentence suspended for two years and fined £10,000 by Judge Field QC.
The prosecution was brought by Alan Richard Blinkhorn who was represented by Andrew Marshall of Edmonds Marshall McMahon, specialist solicitors in private prosecutions.
It was the prosecution case that, between February 18 and March 17, 2011, Camilleri made a series of false representations in his IVA proposal, which he later presented to his creditors for approval.
If the IVA Proposal had been approved by his creditors, it would have wiped out all of Camilleri’s debts – in excess of £9m – and given him a clean slate whilst leaving his creditors with a pittance.
In 2007/08, Camilleri persuaded various creditors to part with their money to finance his developing property empire.
He asked for bridging loans on a short-term basis, (for a matter of weeks), and offered his creditors security against the properties he was buying.
Instead of repaying the money and interest under the bridging loans, Camilleri convinced his creditor to instead release further funds, and roll up their interest they were due, for Camilleri to buy more properties.
Camilleri put new deals to his creditor on a constant basis, until one day, he was to tell them that, in fact, there was no security against the properties for their loans, which had all been mortgaged up to the hilt in debt.
Camilleri’s creditors then pursued bankruptcy proceedings, but in order to stave off the threat of bankruptcy, on February 18, 2011 he prepared an IVA proposal, pretending to set out his total assets and debts, and presented it to his creditors for their approval on the March 17, 2011.
He stated in his IVA proposal that he had no assets of any value for the benefit of his creditors, but that his cousin would lend him £100,000 that could be used to pay towards his debts.
Camilleri stated that his total unsecured creditors were owed about £5.7m, and so they would get 1.29 pence in the pound. In practice, accepting this offer would mean that one of his creditors would get £29,025 to cancel the debt of £2.25m that Camilleri owed.
In fact, Camilleri had not declared the totality of his debts in the IVA proposal, which were substantially more than £5.7mi.
For example, Camilleri declared one of his unsecured creditors, Rooftop Mortgages, as being owed only £160,000, when the accurate figure was £100,000 more, at £269,519.44.
Had Camilleri’s creditors accepted the IVA proposal, they would not have seen the 1.29 pence that Camilleri had promised them.
In respect of his assets, Camilleri declared in his IVA Proposal that he owned 100% of the shares in Fresh Start Living Ltd that had nominal value.
In fact, Camilleri was not the registered owner of the shares, and it was the prosecution’s position that the company was plainly not of “nominal value”.
The prosecution produced evidence showing that Fresh Start Living had more than £1.125m in one of its bank accounts only months after Camilleri had presented his IVA Proposal.
Evidence also showed that during the year 2011, Fresh Start Living’s fixed asset register recorded it as owning a Maserati Quattroporte, an Aston Martin DB9, an Aston Martin V8, an Audi S8, and a number of Mercedes vehicles and vans.
Camilleri declined to call any evidence and left the jurisdiction for Switzerland on the last day of trial, before the jury returned its verdict.
Blinkhorn said: “‘I have only ever sought to ensure Camilleri was brought to account properly for his actions; that has finally occurred. The IVA proposal was a sham and I am grateful to the courts we have had to pass through for taking the trouble to understand the issues and dealing with them properly.”
Andrew Marshall, partner at Edmonds Marshall McMahon said: “Mr Blinkhorn came to Edmonds Marshall McMahon due to our expertise in conducting private prosecutions.
“This was an elaborate deception that Andrew Camilleri maintained in order to mislead his creditors to give himself a clean slate, leaving his creditors with a pittance.
“This has been a challenging and time-consuming prosecution. It has been an incredibly difficult journey for Mr Blinkhorn, who has spent years trying to get the justice he and Mr Camilleri’s other creditors deserves. He faced constant challenges from a man who may have considered he was untouchable.
“With the number of individuals in the UK declaring insolvency increasing for the second year running to levels not seen since the post-2008 recession and more and more people turning to IVA Proposals to avoid bankruptcy, they are advised to approach the process honestly and transparently.”