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Monday, 11 August 2008

Bankruptcy Breach - Sole Trader imprisonment

This is an interesting case because it highlights the little known provisions in the Insolvency Act preventing bankrupts from taking credit without disclosing that they are in fact undischarged bankrupts. Thanks to Business Credit News for sending me this.

"From DBERR - Kent kitchen fitter jailed for bankruptcy offences

A Kent-based kitchen fitter who took nearly £30,000 in deposits from customers but failed to complete their kitchens has been jailed for bankruptcy offences after prosecution by the Department for Business.

Lincoln McLean, 51, of Canterbury, was jailed for two years for offences against the Insolvency Act which prevents bankrupt people taking deposits for work.The court heard McLean accepted deposits from customers, promising them a new or refurbished kitchen, but then took the money and never completed the work.

Business Minister, Pat McFadden said:"We are determined to crack down on cheats like these who profit by deception. Honest people who have handed over money have suffered as a result."This prosecution sends a clear message to would-be fraudsters that they won't get away with it.

"McLean was sentenced on 01 August, 2008 in Canterbury Crown Court and received a total of two years imprisonment on 5 counts contrary to s360((1)(a) and Schedule 10 Insolvency Act 1986 (12 months on counts 1, 3 and 4 and 12 months consecutive on counts 6 and 7, as listed on the indictment.

I suppose it begs the question did the customers ever check out this guy's references? Or did they not ask for any before handing over their cash?

* This case refers to money taken from five customers, for a total of £29,630.* Mr McLean's prosecution and subsequent sentencing resulted from complaints received by the Official Receiver in Croydon, who then referred the matter to the prosecuting authorities.* As an undischarged bankrupt, McLean was not entitled to accept deposits as he thereby obtained credit, in breach of S360 of the Insolvency Act 1986.


  1. Very easy to make comments like

    "I suppose it begs the question did the customers ever check out this guy's references? Or did they not ask for any before handing over their cash?"

    Mr Mclean is a very clever conman and what they have actually prosecuted him for is just the tip of the iceberg. Just a few of his victims alone have lost more than the stated sum.

    He also uses a network of henchmen to 'warn' people about telling the world about his fraudulent dealings.

    The fact that they could only prosecute him for Bankruptcy breach is a testimony as to the ineffectiveness of our laws to deal with people such as Lincoln Mclean.

    I believe that a lot of people conned did check references with the one person who’s kitchen he did install correctly.

    But as said previously Mr Mclean is a very clever conman who gradually reels you in.

    Easy also to say “I wouldn’t get caught like that” ….. Caveat emptor!

  2. Thanks for your comment.

    As it says “it begs the question”! If the buyer was not sure why would they allow themselves to be “reeled in”?

    I have always thought if something seems off, it generally is off. So given the fact they all had the choice to deal with him or not, perhaps more will regret not using their nose or their gut instincts..

    Anyway easy to be smart on the sidelines! If what you say is correct he obviously got what was coming to him.

    The key here for my work, is the fact that most people don’t know that Insolvency Act has criminal prosecution remedies built in, so this entry was written to warn honest traders not to make the same mistakes.


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