Frank McGrath, 63, of Belton Hill, Fulwood, Preston, who was previously jailed for laundering money for a drug smuggler, was made bankrupt at Preston County Court, in a case that could lead to an insolvency order for hundreds of thousands of pounds.
But today, an unfazed Mr McGrath told the Evening Post he was “extremely optimistic” about the future.
The £40,000 petition was made by businessman Bob Haugh, 72, from St Annes – who today said a further £160,000 was expected to be added to the order in respect of his costs for the case, which has been ongoing since 2011.
Mr McGrath, who was deputy leader of Preston Council between 1982 and 1990, was locked up in March 2010 at Manchester Crown Court after being found guilty of money laundering for heroin smuggler Silvano Turchet, an Italian pilot who flew Class A drugs into an airfield in Shropshire in 2006.
The former teacher, who has four children, was ordered to pay £925,000 within six months at the same court in April 2011, after a judge ruled that was the amount of his ‘benefit’ from the crime. Extra time was added to his jail term after he did not pay enough money back in time.
Petitioner Mr Haugh said: “Judge Anson made a bankruptcy order and I have a meeting with the insolvency practitioner today.
“This has been a long, long, journey that has cost me a lot of money and emotional turmoil. I’m a 72-year-old man and he has put me and my family through a lot of trauma.”
His solicitor, Damian Cadman-Jones, of Smith and Wells Solicitors, said: “The original debt was for just over £20,000 but Mr McGrath has fought tooth and nail at every step so the court has made various additional cost orders. He is not to be underestimated.
“Mr McGrath previously instigated proceedings against my client and it’s likely costs of a further £160,000 from those will be added to his order, and possibly more costs relating to other creditors.
“His reaction in court was one of disbelief – he has boasted no creditor would ever make him bankrupt but it’s finally happened.”
Speaking from his Fulwood home, Mr McGrath said: “The judge had to make the order on the basis of information and facts before him and there are no grounds to appeal. It arises from a judgement I had from 2011. I couldn’t satisfy that debt because I had to give priority to the previous confiscation order and so I’m technically insolvent. My assets, as they are, will be realised to pay my debts.
“I was released from prison in June 2013, and I have always maintained by innocence in respect of those criminal charges.
“I have reported some concerns to the Criminal Cases Review Commission, who have advised me they will be looking into the matter and will contact me early next year.
“So whilst this has been a challenging period, I remain extremely optimistic about the future. I’m fortunate to have supportive family and friends.”