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Exeter bankrupt jailed for assets and benefit fraud

28 February 2012 16:30

Insolvency Service

Helen Louise Rush, a bankrupt from Exeter, Devon has been sentenced to six months in prison for a bankruptcy offence and benefit fraud after a joint prosecution by the Department for Business Innovation and Skills (BIS) and Exeter City Council, following an initial investigation by The Insolvency Service.

Ms Rush, 42, was convicted at Exeter Crown Court after pleading guilty to one count of failing to disclose property whilst bankrupt and two counts of making a false statement to obtain housing benefits. The sentence was suspended for 18 months.

The court heard that in 2006, Ms Rush received £100,000 from divorce proceedings, and used about £62,000 to buy a house for her and her new partner.

The court also heard that on being declared bankrupt in 2010, Ms Rush provided false information to the Official Receiver who was dealing with her case, by claiming she had not been involved in any divorce proceedings in the previous five years and failing to disclose her interest in the property she had bought and occupied, instead claiming to be renting it.

Ms Rush also failed to disclose her interest in the property, and that she had occupied the property with her new partner when she claimed housing benefit. This led to an overpayment of housing benefit of £27,000 over a three-and-a-half year period .

Commenting on the case, Deputy Chief Investigations Officer Liam Mannall from the Department for Business Innovation and Skills said:

“Helen Rush had a legal obligation to give honest and accurate information to the Official Receiver about her financial circumstances when applying for bankruptcy, but did not do so. She also claimed housing benefit when she should not have done so. She has now been convicted in a criminal court and narrowly escaped prison. This is a salutary reminder to all those in similar circumstances to be truthful about their situation or risk the self-induced ordeal which Ms Rush has put herself and her family through”.

Ends

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Notes to Editors

1. Ms Rush of Exeter in Devon was made bankrupt on a creditor’s petition on 21 January 2010 with an estimated deficiency of £24,401.

2. As a bankrupt Ms Rush was required by section 291 of the Insolvency Act 1986 to give the Official Receiver such inventory of her estate and such other information, and to attend on the Official Receiver at such times as the Official Receiver may reasonably require. Section 353 of the Insolvency Act 1986 makes it an offence to fail to disclose to the Official Receiver property within the bankrupt’s estate.

Section 112(1)(a) of the Social Security Administration Act 1992 makes it an offence to make a statement or representation that the maker of the statement knows to be false for the purpose of obtaining housing benefit.

3. In sentencing HHJ Wassall found that the offences crossed the custody threshold but suspended that sentence due to Ms Rush’s obvious distress and remorse. Ms Rush was of previous good character and in trying to make things right for her children had concealed the fact of the divorce settlement.

4. Ms Rush’s convictions of six months for the bankruptcy offence and the two months’ sentence for each of the housing benefit offences were suspended for 18 months, with the sentences to run concurrently.

5. Details of transactions:

On 30 June 2006, Ms Rush and her then husband reached a final financial settlement in their divorce proceedings.

As a result on 07 August 2006, £84,550 was transferred into Ms Rush’s new partner’s solely-held account and on 17 August 2006 a further £15,632 was transferred, totalling £100,183.

On 07 August 2006, £35,021 was transferred out of the account to Dunn & Baker. On 22 August,2006, another £26,586.63 was transferred which Ms Rush later explained was used for the purchase, legal fees and stamp duty for a property in which she and her partner resided.

6. Timeline of significant events:

23 November 2011 - First hearing adjourned for legal aid application.

21 December 2011 - Adjourned hearing where Ms Rush entered guilty pleas to Exeter City Council’s charges, and Department for Business Innovation and Skills (BIS)’s charges are added to proceedings.

27 January 2012 - Adjourned hearing where Ms Rush entered guilty pleas to the BIS offence.

26 February 2012 - Crown Court sentencing.

7. Offences:

On 21 October 2007, at Exeter, for the purpose of obtaining housing benefit for yourself, you made a statement or representation which you knew to be false, namely that you completed and signed an Application Form for Housing Benefit and Council Tax Benefit declaring that the information given was true and complete when you had failed to disclose all the required information, in particular, that you were owed approximately £60,000 by Laurence Taylor; and

On 21 October 2007, at Exeter, for the purpose of obtaining housing benefit for yourself you made a statement or representation which you knew to be false, namely that you completed and signed an Application Form for Housing Benefit and Council Tax Benefit declaring that the information given was true and complete when you had failed to disclose all the required information, in particular, that you had occupied the property 15 Old Rydon Ley, Exeter with Laurence Taylor prior to 1 October 2007,

both contrary to section 112(1)(a) of the Social Security Administration Act 1992.

Between 20 January 2010 and 24 November 2010, being a bankrupt, you did not to the best of your knowledge and belief, disclose all property comprised in your estate to the Official Receiver, in that you failed to disclose your equitable interest in the property at 15 Old Rydon Ley, Exeter EX2 7UA

contrary to section 353(1)(a) and 350(6) Insolvency Act 1986.

8. The Insolvency Service administers the insolvency regime investigating all compulsory liquidations and individual insolvencies (bankruptcies) through the Official Receiver to establish why they became insolvent. The Service also authorises and regulates the insolvency profession; deals with disqualification of directors in corporate failures; assesses and pays statutory entitlement to redundancy payments when an employer cannot or will not pay employees; provides banking and investment services for bankruptcy and liquidation estate funds; and advises ministers and other government departments on insolvency law and practice. Further information about the work of The Insolvency Service is available from www.bis.gov.uk/insolvency

9. Department for Business Innovation and Skills (BIS)’s mission is to build a Dynamic and Competitive UK economy, in particular by creating the conditions for business success and promoting an open global economy. The Criminal Investigations and Prosecutions team contributes to this aim by taking action to deter fraud and to regulate the market. We investigate and prosecute a range of offences, primarily relating to personal or company insolvencies. Further information about the work of the Criminal Investigations and Prosecutions team is available at http://www.bis.gov.uk/policies/business-law/criminal-investigations

10. Insolvency Service Media Enquiries should be directed to:

Kathryn Montague, Media Relations Manager on 020 7674 6910 or

Ade Daramy, Press Officer on 020 7596 6187

11. Housing Benefit and Exeter City Council related enquiries:

Steve Upsher on 01392 265103

Ins12/Coms/009

Contact Information

Ade Daramy
Name
Ade Daramy
Job Title
Mr
Division
Insolvency Service
Phone
020 7596 6187
Fax
Mobile
Email
ade.daramy@insolvency.gsi.gov.uk