Former Kleenmaid director jailed for nine years
UPDATE 3.30PM: FORMER Kleenmaid director Bradley Wendell Young has been sentenced to nine years jail.
He will be eligible for parole on November 5, 2022 after he has served six years and three months.
Judge Brad Farr said Young had no criminal history but that was not unusual for people involved in "white-collar offending".
He said he sentenced on the basis Young was "one of the prime movers" in a $13 million fraud against Westpac bank.
Judge Farr said Kleenmaid had $96 million consolidated debt and an $86 million balance sheet deficient after the offending.
He said Young was well aware of the "dramatic loss making" before the company sought money from Westpac.
"You were well aware of your duty not to trade while insolvent," he said.
Judge Farr said shifting the working capital meant the risk was shifted to creditors.
He said flow-on effects meant creditors could not pay their creditors and such actions could "wreak havoc on a business community".
But Judge Farr acknowledged Young had financial difficulties personally in the wake of the Kleenmaid collapse, including bankruptcy.
"You have suffered financial ruin as a result of the Kleenmaid collapse," he said.
Young's barrister Chris Minnery said his client was "enormously optimistic" and he thought he was acting to save his company.
But Judge Farr said while there might have been some blind optimism, Young had shown "callous disregard for those affected by his behaviour" given the company's financial position.
He said Young had risked other people's money and his actions had the potential to cause significant financial hardship to others.
EARLIER: THE judge sentencing former Kleenmaid director Bradley Wendell Young says "Blind Freddy could see this company was insolvent".
"I had no difficulty whatsoever concluding your client was, at all relevant times, aware of the true financial position," Judge Brad Farr said.
"To suggest otherwise flies in the face of the evidence."
Young, 49, was found guilty last Friday after a trial of defrauding Westpac through a $13-million loan and 17 offences of operating Kleenmaid while it was insolvent.
Judge Farr is expected to sentence Young shortly for his dishonesty in the lead-up to Kleenmaid's collapse.
Kleenmaid owed Westpac Bank about $28 million when it collapsed in April 2009.
The focus of the ASIC investigation that led to the trial centred on the solvency of the Kleenmaid Group and a corporate restructure undertaken in September 2007.
ASIC alleges the Kleenmaid Group continued to trade despite becoming insolvent from March 2008.
Commonwealth prosecutor Michael Woodford told Brisbane District Court the scale of Deloitte's investigation was enormous and ASIC's subsequent investigation was of epic proportions.
He said Young's commercial dishonesty was protracted and sustained, noting the insolvent trading continued while Young was clearly in charge of a sinking ship.
Mr Woodford said staff and contractors had been asked to forego wages so it was clear the company's financial situation was dire.
"(Young) was one of the prime movers of the offending," he said.
"The Crown put its case to the jury that he knew full well that Edis (one arm of the Kleenmaid group) was insolvent when it incurred those debts.
"He knew full well what the financial circumstances were and, why wouldn't he, he was the managing director of the company."
Mr Woodford said defence suggestions Young did not receive the fruits of the dishonest acts was a disconnect with reality because his family was a 50% shareholder of the Kleenmaid group.
He said the sophistication was substantial, with many months between an idea to restructure the business and a dishonest loan application.
Mr Woodford said Young was involved in directorship changes, new systems for customers and other moves to "strengthen the false picture" and prey on the good will of the banks.
He said these moves secured them $3.5 million just seven months after fraudulently seeking a $13 million loan to help with other debts.
Mr Woodford said the delay in accepting the business was insolvent meant a larger number of creditors were affected and a larger amount of money was lost.
He said the lost money was never recovered.
Defence barrister Chris Minnery said his client was a father of five who had been involved heavily in the community through his local church.
He provided 61 references attesting to Young's good character.
"The present offending is an aberration and out of character," he said of the fraud and insolvent trading offences.
Mr Minnery said his client was not seeking personal gain and the fraud occurred during efforts to save the company.
He argued the fraud and insolvent trading was not sophisticated, and that his client delegated responsibility for the loans to Mr Armstrong.
Mr Minnery said his client was not focused on the financial position of the business.
Judge Farr said delegation did not dissolve Young's responsibility for the offences.
Young has served seven days in custody since the verdicts were delivered last Friday.
Former Kleenmaid director Gary Collyer Armstrong has already been sentenced to seven years jail after pleading guilty to his role in the collapse of the national whitegoods distributor.
He is not eligible for parole until February 2, 2018. He is appealing his sentence.
Andrew Eric Young, who initially sat alongside his brother when the trial began in April, still has fraud and insolvency charges pending.
Andrew Young's trial could not proceed because he did not have representation properly prepared to take on his case.
- ARM NEWSDESK