Lincoln accountant with £4.5m debt borrowed to fund gambling addiction

Lincoln accountant Russell Payne failed to disclose assets in the lead up to his bankruptcy, with £4.5 million of debt, investigators have found.

Mr Payne, who was head of Russell Payne & Co, was interviewed by the Insolvency Service Official Receiver after a Bankruptcy Order was made in June 2017. He failed to disclose that he had disposed of assets in the lead up to the order being made.

His full deficiency at the time he was declared bankrupt was £4,508,831.

He told interviewers that between 2009 and 2016 he had borrowed sums of money from various parties to fund building ventures, supplement his income, repay existing debts and fund his long-term gambling addiction.

In March 2017 he received £99,073 (after payment of tax, fees and a mortgage) in consideration for the sale of shares in a limited company of which he was a director.

Mr Payne used £58,000 of the proceeds to repay a debt to a relative, £10,000 to repay two creditors, and the remainder to pay for household expenses.

As a penalty for not disclosing the disposed of assets, The Insolvency Service has handed down eight years of restrictions from November 16 until 2025.

Bankrupts are normally discharged after 12 months.

Gerard O’Hare, an Official Receiver at the Insolvency Service said: “Where a bankrupt has taken undue risks with creditors’ money, he should not expect to do so without repercussions, particularly when others suffer financial loss as a result.

“A bankruptcy restriction in these circumstances will serve to provide creditors with a degree of protection, and it will also act as a deterrent to the bankrupt not to act in a similar manner in the future.”

Payne was struck off as a Chartered Accountant by the Institute of Chartered Accountants in England and Wales (ICAEW).

The company, which was one of the largest accounting firms in Lincoln, went into administration in February.

The firm, which had a £1.1 million turnover and 25 members of staff was taken over by Lincolnshire company Dexter and Sharpe.