He says he “categorically made it known” to Mr Adler, “in a cafe somewhere,” he had been bankrupt since 2012, before asking Mr Adler in February 2018 to lend him $50,000 to put towards a car wash business in which he held a 50 per cent interest.
“What Mr Kaftel was doing was holding himself out as someone solvent … someone with an equitable interest in an asset,” crown prosecutor Tom Jones said in closing submissions on Friday.
Mr Adler, a money lender, agreed to lend him half the desired amount and drew up a monthly repayment schedule with a two per cent interest rate.
He was not the first businessman Mr Kaftel had approached for a loan or investment in a car wash business without declaring his bankruptcy status.
In November 2017 he pleaded guilty in the local court to borrowing large sums of money from two other men in 2013 and 2015.
“You would have thought that in February 2018, only three months after entering these pleas of guilty … the need to comply with his obligations under the Bankruptcy Act would have been front and centre,” Mr Jones said.
“You would have thought the accused would have made clear to Mr Adler … in 20-point font, bold capital letters that he was an undischarged bankrupt.”
He pointed to contemporaneous emails between the men, in which “not a single word written” by either man suggested Mr Adler was made aware of Mr Kaftel’s status.
In one such email Mr Kaftel asked Mr Adler to buy him a $42,000 car due to his inability to get credit, to which Mr Adler replied: “I was not aware that you had a bad credit rating.”
Mr Jones said it was “simply not credible” that a professional money lender would enter into an agreement with someone he knew to be bankrupt.
Mr Kaftel did not give evidence in person, but a February 2019 interview he gave to the Australian Financial Security Authority was played to the court, in which he accused Mr Adler of trying to exact “revenge.”
“He claims I have embarrassed him in front of his board, and he is very annoyed and peed off with me … it’s his way of getting his revenge back.”
Mr Adler was the only witness called before the trial. It comes 15 years after he was sent to prison for two years on four counts of dishonesty related to his time as a company director.
Defence counsel Bruce Levet targeted his criminal past, saying it was proof Mr Adler was “not what one would describe as an honest man,” and said recently Mr Adler had been “a little economic with the truth.”
“In correspondence [Mr Adler] talks about the board … his credit committee. Who were they? His wife, his accountant,” Mr Levet said in closing submissions.
The case is not about whether the money was lent, repaid or Mr Kaftel was an undisclosed bankrupt. Nor is it about whether Mr Kaftel is “a nice guy”, “a good businessman,” or an “ethical businessman,” Mr Levet told the jury.
“It’s about one thing, and one thing only, whether Mr Kaftel had informed Mr Adler at the time of obtaining credit that he was an undischarged bankrupt,” he said.
“Why is it a professional money lender did not do the very basic thing of a credit check, before he parted with just under $25,000.”
He put it to the jury that there was “no point” doing a credit check.
“Why? Because Mr Adler knew.”
The trial before Judge David Arnott SC continues on Monday.
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Lucy Cormack is a crime reporter with The Sydney Morning Herald.