The Analysis News & Opinions
Bankruptcy restrictions for gambler over friend’s money
A London resident who persuaded a friend to invest £280,000 in property before squandering it on gambling has accepted 12 years of additional bankruptcy restrictions. In July 2017, Shahriar Farrokhzadeh (42),
from Barnet, North London, asked an associate to invest £280,000 in a property deal with him. The money was to enable Mr Farrokhzadeh to buy a property worth £2.3m at a discounted price before selling it on for a profit. Mr Farrokhzadeh promised his friend
more than £60,000 profit in return for the investment and that he would be repaid in under two months. The associate transferred £280,000
and in return, Mr Farrokhzadeh signed a promissory note for £343,000, covering the amount invested and projected profit returns, along with promises of being repaid in full by the end of August. Over the following three months, however,
Mr Farrokhzadeh continually delayed paying back the investment while informing his associate that the purchase and sale of the property had been completed.
In reality, Mr Farrokhzadeh did not
purchase the property and instead squandered the £280,000 on gambling and other lifestyle expenses.
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www.CCRMagazine.com While delaying repaying the investment
from his associate, Mr Farrokhzadeh tried to elicit additional funds from him saying he had another investment opportunity. Following a petition by one of Mr
Farrokhzadeh’s creditors, he was ordered bankrupt by the courts in April 2019 with liabilities of just under £4m. Bankruptcy restrictions are usually lifted
after 12 months but due to the seriousness of Mr Farrokhzadeh’s actions, the Official Receiver pursued extended restrictions to prevent him causing any further harm to other creditors. The secretary of state accepted a
bankruptcy restriction undertaking from Mr Farrokhzadeh on 19 September 2019. For 12 years, he is restricted from borrowing more than £500 without disclosing his bankrupt status, or act as a company director without the court’s permission, among other restrictions. Alan Draycott, deputy official receiver,
said: “Mr Farrokhzadeh secured thousands of pounds from his friend in good faith but frittered it away. In interviews with the Official Receiver, he could not even recall exactly what he had done with all the money.
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