Chapter 2 - The Insolvency Service

Chapter 2
83 Disqualification Orders were made ranging from 12 months to 12
years; and
106 defendants were ordered to pay total prosecution costs of
£208,030.71.
* Note - some of these amounts of compensation are to be paid out of some
of the confiscation orders made: to be specific, £213,844.21 worth of
confiscation is to be paid as compensation.
Case Study
A bankrupt who preyed on ailing companies and defrauded creditors on a
massive scale is now serving 4 years in prison following a series of
investigations. He has also been disqualified from being a company director
for the maximum 15 Years. The bankrupt who had a total of 94 companies
wound up by The Service, persuaded directors to take him on as an
insolvency expert and so called ‘white knight’ in ‘credit resistance’
strategies. In some instances he set up a shell company and generated false
invoices to make that shell company the main creditor of the ailing business.
The firm would then go into liquidation, with most of the assets transfering to
the shell company- now the main creditor. But instead of transferring the
assets back to the company owners as promised, the bankrupt charged
extortionate fees to claim back the hidden money.
Hotline
The Service operates a 24/7 Hotline, which allows members of the public to
provide our Criminal Allegations Team with information about individuals who
may be managing limited companies whilst disqualified, or committing any
other offence in relation to an insolvency.
In 2005-06 the Hotline received 301 calls of which 135 resulted in reports
alleging possible offences being submitted to the prosecuting authority
compared with 98 in 2004-05.
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