David Murphy, founder of Debt Wipeout, has been ruled unfit to stand trial and unlikely to regain fitness within the next 12 months, according to a recent hearing in the NSW District Court, ASIC reported.
Murphy was charged on April 26, 2022, with four counts of engaging in dishonest conduct while operating a financial services business and three counts of making false statements. ASIC alleged that Murphy falsely claimed to discharge consumers' debts through advertising the Debt Wipeout business on billboards, websites, and in person. This claim, made in exchange for upfront payments, was an assertion he could not fulfill.
The case was forwarded to the NSW District Court following concerns about Murphy's fitness to stand trial.
Judge Sophia Beckett, relying on medical evidence from the Crown, concluded Murphy's unfitness for trial. Despite this, a prima facie case has been established for each offense charged.
Under section 20BC(5) of the Crimes Act 1914 (Cth), Beckett ordered Murphy’s release with conditions. These include receiving recommended medical treatment and refraining from providing any financial services or advice, including through websites or social media.
ASIC initiated an investigation into Murphy following consumer reports. The regulatory body then referred a criminal brief to the Commonwealth director of public prosecutions, resulting in charges.
Previous Federal Court orders had restrained Murphy and other parties from certain business activities related to debt discharge.
ASIC had previously obtained Federal Court orders against Murphy and others, prohibiting specific business activities related to debt discharge. Additional orders were secured in April 2021, restraining parties associated with Murphy from engaging in certain activities.
For the ASIC media release, click here.
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