Kleenmaid founder sentenced to nine years imprisonment

Kleenmaid founder sentenced to nine years imprisonment

Andrew Young, a former director and founder of whitegoods distributor Kleenmaid, has been sentenced to nine years in jail for offences arising from the company's collapse more than a decade ago.

Young was found guilty of 20 breaches of the law by a jury for offences including fraud and insolvent trading after a 59-day trial.

His nine-year sentence with a non-parole period of four years is for the two convictions of fraud.

The 17 counts of insolvent trading mean Young has been sentenced to a total of three years imprisonment to commence from the parole eligibility date for the fraud.

After serving 12 months in prison he will be eligible for release upon paying a $500 fine and having two years of good behaviour.

Founded in 1980, Kleenmaid fell into administration in 2009 with consolidated debts amounting to approximately $96 million, which included $26 million in customer deposits that had been paid for appliances yet to be delivered.

Judge Deveraux SC said in sentencing that the crimes committed were of such a scale that imprisonment was appropriate in the circumstances.

"It would be obnoxious and naïve to consider these types of crimes victimless," says Deveraux.

"People in the community must be put on notice that dishonest will bring with it commensurate punishment."

Specifically, Young was found guilty of:

  • One count of fraud by dishonestly gaining loan facilities from Westpac in November totalling $13 million;
  • Two counts of criminal insolvent trading of debts of $3.5 million relating to two additional loan facilities obtained by Kleenmaid company EDIS Service Logistics;
  • Fifteen counts of criminal insolvent trading of debts amounting to more than $750,000 incurred during the period between October 2008 and April 2009;
  • And one count of fraud by dishonesty causing $330,000 to be withdrawn from a Kleenmaid company bank account two days prior to the appointment of administrators and transferred into a bank account that he and his wife could access.

Young's punishment follows an extensive investigation and legal process by the Australian Securities and Investment Commission (ASIC) that began in 2012.

Former directors of Kleenmaid group, including Young, Bradley Young, and Gary Armstrong first appeared in court in 2012 on criminal charges brought by ASIC.

Armstrong pleaded guilty to one count of fraud and two counts of insolvent trading on 24 August 2015 and was sentence to 5.5 years' jail.

Bradley Young was also sentenced to nine years' jail for his involvement in the collapse of Kleenmaid after being found guilty of one count of fraud totalling $13 million and 17 counts of insolvent trading of debts amounting to more than $4 million.

Andrew Young's trial initially commenced in August 2017 but was abandoned in October that year because of the accused's mental condition.

The Jury found that Young was acting as a "shadow director" of EDIS. Shadow directors can still be liable for breaches of the laws relating to directors' duties, even though they were never formally appointed as director sof the company, if they act as a director or give instructions to the appointed directors on how they should act.

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