MWP Transport gains freezing orders in $5m case


Pace Group CFO and his companies involved after admission of theft

MWP Transport gains freezing orders in $5m case
The case is being heard in the Supreme Court of NSW

 

A transport company has gained a freezing order on its group’s CFO and a number of his firms after an admission of theft of more than $5 million.

Michael Kent was an employee of the Pace Group from 2001 and since 2006 acted to the group through the third defendant, Deduce Financials.

The order was sought in the New South Wales Supreme Court by MWP Transport, which provides transport services for the group.

Kent admitted to Pace Group director Paul Pace in mid-February that he had been stealing from the company for the past five years, with at least $5,882,967.86 taken since January 2015 and further amounts misappropriated earlier, although the precise amount is not yet known.

The weeks either side of March 1 were taken up with negotiations with one of Kent’s firms, TTA Investment Holdings, owned jointly with another man.

On March 8, Kent and his companies made undertakings were not to dispose of any of their assets and not to destroy any of their financial records.

This was agreed on the basis that it did not prevent Kent paying up to $2,000 a week on ordinary living expenses: he and his wife, a co-defendant on whom there was no evidence she knew of the theft, paying any "reasonable legal fees"; and the defendants dealing with or disposing of assets in the ordinary and proper course of business, including the payment of business expenses properly incurred, such as tax.

TTA was found to have received $230,500 and the freezing order for that firm was amended to that amount.

While the Kents argued that two companies should avoid being frozen due to the possibility of incriminating themselves, the argument was not accepted.

"The evidence is that the first defendant engaged in a large and deliberate fraud over an extended period of time," the judge’s ruling reads.

"Although he confessed to that fraud without being prompted and has cooperated with the plaintiffs since that time, there is reason to believe that he has not been completely frank in relation to his conduct.

In particular the judge highlighted that:

  • Kent underestimated the extent to which he misappropriated the plaintiffs’ funds. The evidence suggests that the fraud has been continuing for a period of 10 years, not the five years disclosed. In addition, there is evidence that Kent misappropriated money from MWP Transport, although he did not disclose that fact to the plaintiffs
  • On February 23, Kent met with the plaintiffs’ accountant and disclosed he and his wife owned three major assets but did not reveal a fourth
  • there is evidence Kent deleted the Outlook data file from his work computer before returning it to the plaintiffs
  • there is evidence that Kent asked an associate not to provide bank statements to the plaintiffs’ accountant.

Also of concern was that Kent has become "less cooperative in recent times by, for example, refusing to attend further meetings" with the accountant.

"To some extent, Mr Kent’s behaviour might be explained by the fact that he will likely face criminal charges and that neither he nor his wife would wish to incriminate themselves or incriminate themselves further," the ruling reads.

"However, that does not alter the fact that on his own admission, Mr Kent has misappropriated large sums of money over an extended period of time."

The case is ongoing.

 

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