A former company director involved in the collapse of the Kleenmaid appliances business will spend at least six years in jail in one of the toughest punishments handed to a white-collar criminal in Australia.
Bradley Wendell Young was sentenced to nine years prison after a jury in the Brisbane district court convicted him of fraud over a $13m bank loan and criminal insolvent trading of debts of more than $4.2m.
Judge Brad Farr, in sentencing Young last Friday, said he “showed a callous disregard for the fortunes of those affected by your behaviour in risking other people’s money in extraordinary amounts”.
Young was a key player in the collapse of Kleenmaid, which the court heard owed $96m, including $26m in customer deposits for appliances they had not received, when administrators took control in 2009.
John Price, the commissioner of the Australian Securities and Investments Commission, said the ruling was a warning to rogue directors and companies.
“This is a strong endorsement of Asic’s case, highlighting the severity with which such behaviour should be viewed and should send a signal to all directors and companies that we will pursue them through the courts when they break the law,” Price said in a statement on Monday.
Young’s sentence, which includes eligibility for parole no earlier than November 2022, dwarfs punishments handed down in previous high profile prosecutions.
Alan Bond served four years of a seven-year sentence for siphoning $1.2bn from Bell Resources, while Rodney Adler served just under three years over the collapse of insurer HIH.
The longest known jail sentence for corporate crime in Australia was for Robin Sarah Greenburg, who in 1992 was given 17 years for stealing about $3m from investors in Western Women’s Financial Services.
During a 71-day trial the court heard that Young proposed a plan for a Kleenmaid group company called EDIS Service Logistics to obtain a $13m Westpac loan to buy inventory from the group’s main trading company Orchard KM.
This was despite knowing about the “dramatic loss-making and indebtedness of the Kleenmaid group”, Asic said.
Prosecutors argued that Young and fellow director Gary Collyer Armstrong failed to tell Westpac that EDIS and Orchard KM did not trade at arm’s-length and concealed Orchard KM’s “serious debt position”.
Young was convicted of one count of fraud over the $13m loan and 17 counts of criminal insolvent trading between July 2008 and April 2009.
Farr said in sentencing that insolvent trading “can wreak havoc on a business community”.
Armstrong, who testified against Young, previously pleaded guilty to fraud and criminal insolvent trading and was sentenced to seven years’ jail last October. He will be eligible for parole in February 2018.
The founder of Kleenmaid, Young’s older brother Andrew, is due face charges in a trial with a date yet to be set.
