Before Richard Ludwig’s business went bankrupt, he and his pre-insolvency advisers smuggled over $ 740,000 out of the business.


A Gold Coast businessman is in custody awaiting conviction after following a plan to illegally strip his telecommunications company of money and assets before it goes bankrupt.

Richard Ludwig owned six Leading Edge Telecoms stores, which sold telephony and internet products as a Telstra reseller in central Queensland.

They suddenly closed weeks after Christmas in early 2015.

At first glance, it looked like it was another company on the brink of the wall after failing to pay its growing bills, and the collapse left dozens of employees jobless and millions of dollars owed to them. creditors.

But ABC’s 7.30 schedule may reveal that the reality was much different, as the collapse was expected for months to avoid paying creditors, based on illegal advice from two pre-insolvency advisers.

Richard Ludwig pleaded guilty to 11 counts in Brisbane District Court, including dealing with the proceeds of crime and breaching his manager’s duties by dishonestly using his post.

7.30 exclusively obtained emails between Ludwig and his advisers which exposed the secret plan.

Insolvency attorney Michael Hayter read the emails.

“These were the pre-insolvency counselors issuing fictitious bills of hundreds of thousands of dollars just before the business went into liquidation.

“The monies were then paid out to the companies of the pre-insolvency counselors and then found their way out the back door to the benefit of the manager.”


At the end of 2014, a few months before the liquidation of his company Cap Coast Telecoms, Richard Ludwig was in contact with the SME R Us, a company then offering what is called pre-insolvency advice.

Richard Ludwig was the sole director of Cap Coast Telecoms, which had six Leading Edge Telecoms stores in central Queensland.(Provided)

R Us of SME was led by Stephen O’Neill, a prolific adviser who was jailed in 2001 for robbing clients of his mortgage brokerage business.

The ABC has previously investigated and questioned Stephen O’Neill’s role in the collapse of another business.

In Queensland, O’Neill’s right-hand man was John Narramore.

On October 13, 2014, Narramore sent an email to Ludwig, with the subject titled: “Proposal”.

He presented a 12-point plan to help Ludwig avoid debt and taxes and protect his assets, and said the plan:

  • “Avoid $ 1.2 Million Debt to Leading Edge”
  • “Extract and assets protect $ 500,000 in cash”
  • “An asset protects the proceeds of $ 450,000 from sales of shares”
  • “Prepare and supervise the liquidation”
  • “Set up new structures so that you can move forward – without a direct link to you”

The plan represented savings of over $ 2 million and property asset protection of over $ 1 million.

“We have to give them bills / loans to protect the money to go out,” Narramore wrote.

In return, the advisers would receive a fee of $ 220,000.

Stephen O'Neill talks to Dan Oakes beside a car.
Stephen O’Neill was the director of PME R Us.(ABC News)

A few days later, Ludwig responded enthusiastically to Narramore and O’Neill:

“It has been… a huge eye-opener to meet you and I think we will be able to enjoy the fruits of our labor very soon!

“We are happy to move forward to the amount of 220K no matter if we end up failing.”

John Narramore and Stephen O’Neill caused false invoices to be sent to Richard Ludwig’s company, Cap Coast Telecoms, resulting in payments of over $ 740,000 to companies controlled by the advisers.

The money was then paid into various accounts controlled by Ludwig and his associates.

The collapse injured former employees

The news of this illegal scheme came as a shock to Kirsten Stanley, who was devastated when the Gladstone Leading Edge Telecoms store she worked in closed without warning.

Ms Stanley was in her mid-twenties and said she was told she was training to become a manager.

But in January 2015, she became one of dozens of workers who lost their jobs overnight.

Many have received the news by text.

Woman wearing a green shirt standing in front of a store front.
Kirsten was a former employee of the Leading Edge Telecoms store in Gladstone.(ABC News: Russel Talbot)

“It’s probably as stressful as you think it is,” she said at 7:30 am.

“These are the things that cross your mind. You wonder what happened, if you did something wrong, and the next thought is, ‘What am I going to do for a job? ? ‘”

7.30 can reveal that about a week before the stores closed, a massive order for products worth over $ 2 million – mostly for Apple’s latest iPhone – was placed by Richard Ludwig’s company with Telstra.

The order was placed using the account of another company he had an agreement with called Leading Edge Group.

The Leading Edge Group was an authorized Telstra dealer operating as Leading Edge Telecoms, and Richard Ludwig’s company, Cap Coast Telecoms, operated its six stores under the agreement.

Ms Stanley signed on for Gladstone deliveries and was shocked at the number of boxes collected.

An empty telecom store.
Six Leading Edge Telecoms stores in Queensland owned by Cap Coast Telecoms closed suddenly in early 2015. (Provided)

“I had never seen such a large order in the store before, so we were a little cautious about what to do,” she said.

“So we called the head office. Basically they explained to us that this was a confusion and a mistake on Telstra’s part, and not to open them, and that someone would be there to collect them in the next few days. “

When Cap Coast Telecoms went into liquidation, the main creditor was the Leading Edge group, which had debts of over $ 3.4 million.

Leading Edge Group declined to be interviewed but said in a statement:

“The Cape Coast case involved fraud on LEG and cost it over $ 2 million.

“LEG no longer operates in the telecommunications sector and therefore the events of the Cap Coast affair bear no relation to the current operations of LEG. “

Stricter enforcement is needed in the pre-insolvency industry

Swaab insolvency attorney Michael Hayter said harming creditors like Leading Edge Group was part of the plan being discussed by Richard Ludwig and pre-insolvency advisers.

“They were going to divest the business of its assets… take as much money out of the business as possible,” he said.

A man in a suit, seated at his desk with the blinds drawn.
Insolvency attorney Michael Hayter said Ludwig and his advisers’ ploy was “blatant”.(ABC News: Shaun Kingma)

Watchdog ASIC investigated the collapse of Cap Coast Telecoms after being warned by the liquidating company, Cor Cordis.

This led to prosecutions by the Commonwealth Director of Public Prosecutions, which resulted in prison terms of five and four and a half years respectively for Stephen O’Neill and John Narramore for trafficking in proceeds of crime.

7.30 contacted O’Neill’s legal representative for comment, but did not receive a response. John Narramore declined to comment.

Richard Ludwig also declined to comment ahead of his sentencing by Brisbane District Court next month.

While the liquidator was able to recover money from the Cap Coast Telecoms collapse, Cor Cordis told ABC there was $ 2.9 million outstanding.

The liquidation ended in December of last year and the company was written off.

John Winter is the head of Australia’s leading insolvency and restructuring body known as ARITA.

He said the case shows how bad the negative impact of pre-insolvency counselors telling company managers how to withdraw money and assets can be.

Man sitting in an office.
John Winter is the CEO of the Australian Restructuring Insolvency and Turnaround Association. (ABC News: Shaun Kingma)

“There are people who put their own livelihoods on the line to go and work in these places, or act as creditors to keep these businesses going, and all the time the trustees and their shady leaders are making plans to make money. these people’s money. “

Mr Winter said ASIC was to be commended for taking strong action in the matter, but too many rogue advisers had yet to be prosecuted.

“We have had concerns about a number of these very obvious practitioners of questionable remedy advice. This is a longstanding problem and it continues to grow,” he said.

“Picking a fruit or two on hand is not enough, there has to be a really aggressive application… especially as we come out of COVID, where a lot more people are going to be susceptible. “

ASIC declined to be interviewed, saying it would not comment on a case still in court.

In a statement, ASIC admitted that the pre-insolvency industry is largely unregulated, but said it will take legal action if necessary.

“When ASIC has proof that pre-insolvency counselors are complicit in the unlawful conduct of directors, they can be expected to also be investigated as principal offenders and charged with same crimes or similar crimes, “the statement said.

ASIC recommends that directors who wish to obtain pre-insolvency advice engage an accountant, lawyer or registered liquidator, and do due diligence on their background.

Former worker Kirsten Stanley said the injuries caused to residents of central Queensland by the collapse were significant.

“It would have hurt a lot of people,” she said.

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