EXCLUSIVE: Kleenmaid Director Tipped To Plead Guilty Trial Due Next Week
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The Kleenmaid fraud trial that that was due to start next week in the Queensland District Court is tipped to be adjourned with insiders telling ChannelNews that one of the accused in the $100M appliance Company collapsed has this week cut a deal and is set to plead guilty.

Three former directors of the Queensland based Kleenmaid

Group were set to stand trial on Monday, they were facing 20 criminal charges,

including a $13 million fraud against Westpac following the collapse of Kleenmaid.

At the time Kleenmaid operated 22 stores (including 15

franchise stores), and employed over 200 staff, more than 10,000 people were

left with debts as a result of the collapse.

6000 Kleenmaid customers lost over $28.5 million alone,

among them were hundreds who had purchased faulty products and when they went

to claim on their warranty found that the warranty claims were worthless.

Police charged the directors Bradley Young, Andrew Young and

Gary Armstrong with 18 charges of insolvent trading.

Brad left and Andrew Young right,facing several years in jail if found guilty.

ChannelNews understands that lawyers representing Armstrong

have made an offer to the Commonwealth Director Of Prosecutions, that is now

being assessed.

Shortly after the collapse of the Company the Australian

Securities and Investments Commission mounted a major investigation, they later

claimed that Andrew Young and Gary Armstrong, dishonestly withdrew more than $300,000

from the company’s bank accounts two days before it was placed in

administration.

Creditors of the company were angry about the collapse, and

in April 2009 a group confronted Andrew Young armed with a sledgehammer, in the

hours after it was placed in administration.

The mob at the time claimed that they had been robbed

of deposits that they had been placed on Kleenmaid products.

Kleenmaid was placed in administration in 2009, in 2012 the

directors were charged with 18 counts of insolvent trading the charges related

to debts of more than $4 million which occurred after the Company became funds deficient.

All of the directors were committed to stand trial in the

District Court on March 31, 2014 by the Maroochydore Magistrates Court,

Brothers Andrew and Bradley Young who members of the Mormon

Church told ChannelNews at the time of the collapse that they were confident

that they could rescue the business.

ChannelNews has since discovered that Brad Young via his

wife Shelly Young is now running a shoe business called Frau. The business has a

store in Chatswood Chase NSW selling what they claim is Italian shoes.

Back in 2010 Linda Young, the wife of Andrew Young,

registered as a director of four separate companies.

Company records show the four companies were registered to a

light commercial park at 127 Sugar Rd, Maroochydore.

According to ASIC records, Linda Young is the sole director

of Sunny Coast Holdings and Stockton Nominees, while Shelley Young the wife of

Bradley Young is the sole director of Randolf Holdings and Mortimer.

All four companies were registered on February 25 2010.

Each of the four businesses share the same shareholder,

Gayle Hanpson, who has a registered address on the NSW north coast.

The person involved in setting up these businesses for the

Young’s was Wayne John Wessels.

In April 2014 ASIC suspended the registration of Wayne John

Wessels, the former auditor Kleenmaid, following a successful application to

the disciplinary body, the Companies Auditors and Liquidators Disciplinary

Board (CALDB).

The suspension started on 29 November 2013 and is for three

years.

ASIC alleged, and the CALDB found, Mr Wessels failed to

carry out and perform adequately and properly his duties as lead auditor of

Kleenmaid’s financial report for the year ended 30 June 2008.

Specifically, the CALDB found, among other things, Mr

Wessels should have brought a higher degree of professional scepticism to his

consideration of Kleenmaid management’s assumption of the company’s going

concern and that there were deficiencies in the standard of his evidence and

documentation of audit work done.

The new business ventures come after Andrew and Linda Young

were forced to sell their luxury riverfront Maroochydore unit for $1.5 million some $275,000 less than what Linda Young paid for it in 2007.

Soon after the company’s collapse, the intellectual property

was bought by Sydney private equity firm Compass Capital Partners.

Both Bradley and Andrew Young face lengthy jail terms if

convicted of fraud and insolvent trading charges. Time in prison could stretch

to six years.

The Young’s have hired barrister John Rivett, who

represented jailed former Queensland MP Gordon Nuttall who was recently

released from prison.

Armstrong has separate legal representation.

Each of the criminal insolvent trading charges under section 588G(3) of the Corporations Act 2001 carries a maximum penalty of $200,000 or imprisonment for five years or both.

The two fraud charges under section 408C of the Queensland Criminal Code carry a maximum penalty of imprisonment for 12 years.