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Mukhesh Girdharlal Vagharia, a bankrupt, has been sentenced by Leicester Crown Court to 12 months imprisonment after pleading guilty to two counts of fraudulently removing property before and after his bankruptcy. Mr Vagharia’s conviction follows an investigation by The Insolvency Service and prosecution by the Department for Business Innovation and Skills (‘BIS’).
The investigation showed that between September 2007 and December 2007 Mr Vagharia, 53, of Leire Street, Leicester removed £63,000 in cash from three bank accounts to defraud the Official Receiver. Once a bankruptcy order is made, the bankrupt has a duty not to dispose of their assets other than for day-to-day living expenses.
Mr Vagharia ought to have been aware of his obligations as a bankrupt as the Official Receiver had been in contact with him and had reminded him of his duty not to dispose of his assets.
Having failed to attend a number of meetings with the Official Receiver in 2007, Mr Vagharia was ordered to appear at Leicester County Court in February 2008. After one adjournment, Mr Vagharia did attend court on 26 February 2008, where he disclosed details of his bank accounts.
The Official Receiver’s investigations uncovered cheques and deposits made out to Mr Vagharia. In mitigation, he claimed he had been asked to hold these on behalf of a Mr Chanduhbhai. The court did not accept the existence of any such person. Nor did Mr Vagharia provide any evidence to support his claims.
In sentencing Mr Vagharia, Leicester Crown Court accepted the Official Receiver’s evidence that this was a clear case of Mr Vagharia seeking to avoid paying his creditors. The judge ordered that the sentences are to run concurrently.
Glenn Wicks, Deputy Chief Investigation Officer at the Department for Business, Innovation and Skills said:
“The Insolvency Service and the Department for Business will take firm action when we find that undertakings given to protect the public and the business community have been breached. And, where directors knowingly allow their companies to trade whilst insolvent”
Ends
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Notes to editors
1. Mukhesh Girdharlal Vagharia of 29 Redcar Road, Leicester, was made bankrupt on 26 October 2007, following a petition presented by HMRC.
2. Once made bankrupt, a person’s assets come under the control of the Official Receiver, the bankrupt has a duty to not to dispose of their assets other than for normal day to day living expenses. The Official Receiver investigates the assets of the bankrupt with a view to recovering money to pay for creditors. The bankrupt’s duty commences with receipt of the petition and is a continuing duty.
3. Between 21 September and 23 October 2007 the defendant removed £36,000 from three bank accounts held in his name, £25,000 from one, £9,000 from another and £2000 from the third.. After the date of bankruptcy order, the 26 October 2007, he removed a further £27,000 from a single account ending on 5 December 2007 when he took out £7000. In total therefore the defendant removed £63,000 from bank accounts between 21 September and 5 December 2007.
4. Mr Vagharia pleaded guilty to two counts of removal of property contrary to Sections 354(2) of the Insolvency Act 1986.
Mukhesh Girdharlal Vagharia, a bankrupt, has been sentenced by Leicester Crown Court to 12 months imprisonment after pleading guilty to two counts of fraudulently removing property before and after his bankruptcy. Mr Vagharia’s conviction follows an investigation by The Insolvency Service and prosecution by the Department for Business Innovation and Skills (‘BIS’).
The investigation showed that between September 2007 and December 2007 Mr Vagharia, 53, of Leire Street, Leicester removed £63,000 in cash from three bank accounts to defraud the Official Receiver. Once a bankruptcy order is made, the bankrupt has a duty not to dispose of their assets other than for day-to-day living expenses.
Mr Vagharia ought to have been aware of his obligations as a bankrupt as the Official Receiver had been in contact with him and had reminded him of his duty not to dispose of his assets.
Having failed to attend a number of meetings with the Official Receiver in 2007, Mr Vagharia was ordered to appear at Leicester County Court in February 2008. After one adjournment, Mr Vagharia did attend court on 26 February 2008, where he disclosed details of his bank accounts.
The Official Receiver’s investigations uncovered cheques and deposits made out to Mr Vagharia. In mitigation, he claimed he had been asked to hold these on behalf of a Mr Chanduhbhai. The court did not accept the existence of any such person. Nor did Mr Vagharia provide any evidence to support his claims.
In sentencing Mr Vagharia, Leicester Crown Court accepted the Official Receiver’s evidence that this was a clear case of Mr Vagharia seeking to avoid paying his creditors. The judge ordered that the sentences are to run concurrently.
Glenn Wicks, Deputy Chief Investigation Officer at the Department for Business, Innovation and Skills said:
“The Insolvency Service and the Department for Business will take firm action when we find that undertakings given to protect the public and the business community have been breached. And, where directors knowingly allow their companies to trade whilst insolvent”
Ends
__________________________________________________ ____________
Notes to editors
1. Mukhesh Girdharlal Vagharia of 29 Redcar Road, Leicester, was made bankrupt on 26 October 2007, following a petition presented by HMRC.
2. Once made bankrupt, a person’s assets come under the control of the Official Receiver, the bankrupt has a duty to not to dispose of their assets other than for normal day to day living expenses. The Official Receiver investigates the assets of the bankrupt with a view to recovering money to pay for creditors. The bankrupt’s duty commences with receipt of the petition and is a continuing duty.
3. Between 21 September and 23 October 2007 the defendant removed £36,000 from three bank accounts held in his name, £25,000 from one, £9,000 from another and £2000 from the third.. After the date of bankruptcy order, the 26 October 2007, he removed a further £27,000 from a single account ending on 5 December 2007 when he took out £7000. In total therefore the defendant removed £63,000 from bank accounts between 21 September and 5 December 2007.
4. Mr Vagharia pleaded guilty to two counts of removal of property contrary to Sections 354(2) of the Insolvency Act 1986.
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