The pre-insolvency advisors to telecommunications retailer Cap Coast Telecoms, which was wound up and liquidated in early 2015, have pleaded guilty to money laundering, according to the corporate regulator.
As reported by ARN in March, former Cap Coast Telecoms director Richard Ludwig was charged with money laundering and breaching director duties, allegedly with the help of pre-insolvency advisors Stephen O’Neill and John Narramore.
Ludwig was one of the directors of five Queensland Leading Edge Telecoms stores which were then part of the Cap Coast Telecoms group.
Now, according to the Australian Securities and Investments Commission (ASIC), both pre-insolvency advisors have pleaded guilty in the Brisbane District Court to one charge for dealing in the proceeds of crime.
The pleadings come after an ASIC investigation found that in 2014, Ludwig sought pre-insolvency advice from O’Neill and Narramore, of SME’s R Us, following a dispute his company was having with a creditor.
According to ASIC, the men advised Ludwig about an asset protection strategy that would involve the illegal removal of company assets so as to prevent creditors having access to those assets.
It is understood that between October 2014 and January 2015, O’Neill and Narramore issued fictitious invoices from companies under their control to Cap Coast Telecoms for purported services that were never provided.
“Ludwig dishonestly transferred a total of $743,050 from the bank account of Cap Coast Telecoms Pty Ltd to the bank accounts of the companies under O’Neill and Narramore control,” ASIC said. “O’Neill and Narramore subsequently transferred the funds to Ludwig or his associates.
“Once the funds were transferred, Cap Coast Telecoms was wound up in liquidation on 19 January 2015,” the regulator said.
At the time of Cap Coast Telecoms’ winding up and liquidation, the company owed creditors a total of $2,955,138.