Banned Accountant knowingly assisted client to defraud creditors.
Paul James Manley, from County West Services Ltd, an accountancy firm based in Hammersmith has received a 12-year disqualification from being a director for helping a client defraud its creditors.
In August 2017, West County Commercial Services Ltd entered into a creditors voluntary liquidation which triggered an investigation by the Insolvency Service. During the investigation, it was found that Mr Manley had helped one of his clients defraud creditors of more than £1.65 million.
The client in question was Inn Take (UK) Ltd, which was a company that ran pubs on a short-term basis but went into liquidation in 2011. Two of its directors, William Dene Lyall and Joseph Harthan had received a directors’ ban following the liquidation.
On 27 October 2016, the High Court of Justice ruled in favour of Inn Take’s liquidator that parties, including County West Commercial Services, assisted Inn Take in defrauding its creditors.
The fraud itself involved an outsourcing company appointed to deal with the utility companies of Inn Take. Between April 2010 and February 2011 over £1.65 million was paid to them via an account controlled by County West Services Ltd.
However, the High Court ruled that this money was taken from Inn Take and Mr Manley was fully aware of what was taking place “for no consideration on the pretext that they would pay creditors who were never, in fact, paid”.
On 11 December 2018, the Secretary of State for Business, Energy and Industrial Strategy accepted a disqualification undertaking from Paul James Manley, after he did not dispute that he caused County West Commercial Services to be a knowing party to the carrying on of a client’s business with the intent to defraud creditors. His ban is effective from 1 January 2019 and lasts for 12 years.
David Brooks, Chief Investigator for the Insolvency Service, said: In this serious case, Paul Manley operated his company’s client account as an “informal escrow” facility without proper regulatory permissions and with full knowledge of the reputations of the individuals concerned.
Isobel Brett, Director, Bretts Business Recovery, said ‘The client is not always right, and while they should be eager to please, better service would be given by doing the right thing not necessarily what the client has asked for. Accountants and other advisers should be very wary of allowing client firms to pass funds through accounts that they control and should always comply with anti-money laundering regulations’.