Andrew Eric Young is in jail after his $13m fraud conviction.
Andrew Eric Young is in jail after his $13m fraud conviction. File

After eight years, businessman convicted of $13m fraud

ANDREW Eric Young has spent the past eight years denying he de-frauded one of Australia's biggest banks and that he traded while insolvent but today the law caught up with him.

The 66-year-old former Sunshine Coast businessman showed no emotion as a Brisbane District Court jury convicted him on 19 charges related to failed whitegoods retail chain Kleenmaid.

Kleenmaid - founded by Young in 1980 - collapsed in 2009 with debts of around $100m.

It left around 6000 customers out-of-pocket by $26m after failing to supply them with purchased goods.

The major charges against Young were that he defrauded Westpac of $13m by dishonestly gaining a loan and that he traded while insolvent.

Commonwealth Prosecutor Lincoln Crowley showed the jury a raft of emails, corporate structure diagrams and financial records in a bid to prove that Young was a de facto director of Kleenmaid's offshoot company, Edis Service Logistics.

He said Young was a key decision-maker in the Kleenmaid companies including Edis.

Mr Crowley told the jury, Young failed to ensure the troubled company did not continue trading while insolvent and that he dishonestly incurred debts while a director of Edis.

The court heard there was an elaborate restructure of the business so Edis could be sold and to create an illusion the business was a separate firm to Kleenmaid.

In his defence, Young told the jury he should not be convicted because he had a positive belief the company would survive, even noting that he poured around $17.4m of his own money into the venture.

He  refuted the claim he was a director of the business, instead pointing the finger squarely at his co-accused - brother Bradley Wendell Young and co-director Gary Collier Armstrong.

"In this matter the prosecution has got it wrong, very very wrong," Young said.

"Control of Edis  was the responsibility directly of Bradley Wendall Young and Gary Collier Armstrong - full stop. They were the two directors of Edis."

Young's co-accused were dealt with in 2015 and 2016, with his brother copping nine years for his role and Armstrong receiving seven years.

First charged in 2012, it has been a long and arduous task for ASIC and the prosecution team, but Young will finally spend his first night in prison after he was remanded in custody to await sentencing.

The trial took around two months with the jury having no idea Young had faced two previous juries with each of those being sent home after their cases were aborted for various reasons.

Throughout this trial, Young sought to have the matter delayed.

As the trial was drawing to a close, he collapsed outside the courtroom and was ferried away by paramedics.

About halfway through this trial he said he had no faith in his legal team and asked for the barrister and lawyer to be relieved of their duties.

Shortly after he started self-representing he pleaded for a mistrial, saying he was unfit to represent himself.

"The action ASIC has taken against the former directors of Kleenmaid should send a clear message that where a director fails in their duty to prevent a company from incurring debts while it is insolvent, ASIC will take action, particularly where the director's conduct has been dishonest and to the detriment of creditors and consumers," said ASIC Commissioner John Price.

Young will be sentenced on February 7.

HOW THE CASE UNFOLDED:

Young was convicted of:

•    One count of fraud by dishonestly gaining loan facilities from Westpac in November 2007 totalling $13 million;

•   Two counts of criminal insolvent trading of debts of $3.5million relating to two additional loan facilities from Westpac in July 2008;

•    15 counts of criminal insolvent trading of debts amounting to more than $750,000 that were incurred from October 2008 to April 2009; and

•    A further count of fraud by dishonestly causing $330,000 to be removed from a Kleenmaid company bank account just prior to administrators being appointed and transferred to a bank account held by a company in which Young held an interest and from which he and his wife would benefit from the payment.  

TIME LINE OF EVENTS

1980: Kleenmaid founded by Andrew Young.

April, 2009: Administrators were appointed to the Kleenmaid group of companies with debts of $96m including owing customers $26m.

August, 2015: Gary Collyer Armstrong, pleaded guilty to one count of fraud and two counts of insolvent trading in relation to the collapse of Kleenmaid.

April 2016: A trial against Andrew Young and his brother Bradley Young commenced but the trial was discontinued against Andrew Young.  

August 12, 2016: Bradley Young sentenced to nine years for fraud and 3.5 years years for insolvent trading.  He is not eligible for parole until November, 2022, and has appealed his conviction and sentence. 

August, 2017: Andrew Young trial commenced but  discharged on however in October 2017.

January, 2020: Former director and founder of the Kleenmaid group of companies, Andrew Young was found guilty on 19 charges arising from the collapse of the national white goods distributor.



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