FRAUDULENT BANKRUPT

Hokitika Guardian, 22 March 1924, Page 4

FRAUDULENT BANKRUPT

STRANGE MODE OF LIVING. Herbert Pearson, who for some time traded in Manchester as a wholesale provision merchant, was heavily sentenced at the sessions in that city for a series of offences against the Bankruptcy Act and for obtaining money by false pretences from one ot the many travellers whom ho engaged in the course of his business.

He was charged on various counts with obtaining money fraudulently from several travellers, and pleaded guilty to one count only. This plea was accepted. Ho pleaded guilty of obtaining credit from Thomas Stapler and another to the extent of £4722, without disclosing the fact that he was an undischarged bankrupt. He also

admitted having omitted certain creditors from his preliminary statement to the Official Receiver, having made false entries in a ledger, and having failed to keep proper books of account. Air N. La.ski, who appeared for the prosecution, quoted from the Official Receiver’s report, which stated that the accused, who had failed in tho Manchester Court in 1910, and agaiu in December, 1922, had traded in tho name of his six-vear-old son, J. H. Pearson. Ho had never obtained bis discharge from the 1916 bankruptcy. To the present proceedings the debtor, at his first interview with the Official Receiver, stated that he had received £2OOO from seven persons whom he had engaged as travellers at salaries of from £4 to £5 a week and expenses, and that he had repaid £ll6O. This statement had proved quite erroneous. An amended statement of affairs disclosed 13 unsecured creditors with debts aggregating £2802, but tin's also was inadequate, as a subsequent account showed 24 creditors for money lent and invested whose- total advances amounted to £6500 with repayments amounting to £2208, though the repayments figure was an over statement, and the advances an understatement.

Throughout the proceedings the debtor had systematically concealed liabilities until they had been brought to bis notice by the Official Receiver, and it was by no means certain that the whole of the debtor’s liabilities had been disclosed even then. It .would seem that in 1920, 1921, and 1022, 2G men were engaged by the debtor as travellers on the condition that they advanced him a sum of money, the total amount advanced being 0(1900. The bankrupt had a small, unprofitable business, and did not claim to have made any profits at any time therefrom after deducting business expenses, but in the opinion of the Official Receiver there was no justification for the engagement of so large a number of men. There was no adequate demand for their services, and their engagement was a mere device to secure the moneys paid by them to the bankrupt. The Official Receiver’s opinion was that for the three years prior to the receiving order the bankrupt had been living on the advances made by his travellers.

A police inspector said that tho prisoner for the past four years had been living a life of fraud, and had previously been cautioned by tbo police. Twenty-six men had been defrauded, in some eases the amount was as much as £SOO and they wore in the main ex-service men who had parted with all the money they had got a.s the result of their war service.

Mr M’Keever, on behalf of Pearson, said that the prisoner had been in business in Manchester for 18 years, and no complaint in that time had apparently been made against him. This was the first time he had got into trouble. He had repaid the travellers by way of wages between £7OO and £3OO. "

The Recorder, Mr A. J. Ashton, K.C., said he took a serious view of the c-ase. Upon the charge of false pretences the sentence would be three years’ penal servitude, and on the bankruptcy offences 12 months’ hard labour, tbo sentences to run concurrently.