Now forced its closure. Every asset the chairs, the filing cabinets, even the ink, will now be auctioned off so that creditors can be paid. Its a painful process for the former owner and his business partner. We walked out of there and locked the door for what for me was going to be the final time. And i gave her a hug and she sobbed, it was really deep, heartfelt sobbing. It was hideous. This has been everything to you. It has been everything to me. It was only three months ago but it was our life. We put everything into it. The pride that i felt suddenly turned to quite the opposite. To . Embarrassment. The embarrassment that everything i had worked for had been a failure. I had let everybody down, let my staff down, let my suppliers down, let my clients down. How much do you owe . Between me and my partner about £140,000, Something Like that. So, it is not millions, but it may as well be. In england and wales. For most people, bankruptcy is a shameful and a devastating process. They can lose everything and face starting again from scratch. But ive discovered thats not the case for everyone. In fact some of britains richest bankrupts are playing the system and using weaknesses in the bankruptcy process itself to their advantage. This is graham gillespie. A mining and property magnate, he went bankrupt in 2012 owing almost 13 million. Just days after, he drove this luxurious bentley to the prestigious Gleneagles Hotel in perthshire. Believing he was hiding assets, the authorities twice went to court to have mr gillespies bankruptcy extended whilst they tried to track them down. 0ne asset they wanted was this sought after Registration Plate worth £180,000. Mr gillespie claimed hed sold it to pay a gambling debt. Yet i filmed him with it just a few months ago, on a brand new bentley. We contacted mr gillespie but his lawyer said he didnt want to give us a statement. And heres another millionaire who went bankrupt, yet doesnt appear to be struggling financially either. This is barry hughes and his wife jacqueline. He made his money through boxing, private security and sports promotions. He declared himself bankrupt in 2014 after being hit with a £10 million tax bill. Yet for mr hughes this appears to have been nothing more than a financial blip. Despite claiming he has absolutely zero assets and, despite the fact his bankruptcy case remains open, his lavish lifestyle appears intact. I film him and his wife driving a line of luxury cars. Here he is in an audi 07. A bentley bentayga. And a rolls royce dawn convertible. Total value of the familys cars just under half a Million Pounds 7 and that doesnt include the cost of their very exclusive private Registration Plates. All of which i film being driven towards their weekend abode of late, in this exclusive gated community in perthshire. We contacted mr hughes but his legal team also said he didnt want to speak with us. In 2016, the latest full yearfigures available, more than 20,000 people went bankrupt across the uk, owing hundreds of millions to creditors up and down the country. So who makes sure that assets are declared honestly, creditors get paid what theyre owed and that people involved dontjust do it again . I went out on the road with an insolvency investigator, a man whose job it is to sort the simply failed from the deliberately fraudulent. Its not a crime to be bankrupt. Its not a problem to have debt but if you get to the stage where you cant pay off your creditors and your assets dont cover your income, bankruptcy appears to be the end of the line. Its like dying and being reborn again financially. Yet debts only get paid if and when assets are tracked down and sold. If they arent declared and cant be found, those owed money get nothing. Bankruptcy and insolvency is not a victimless crime. There are people out there who are either creditors, it may be, a tradesman, it may be a big company but they cant afford to lose money and very often when people go down in bankruptcy, they take other people with them. Nick barr and his wifejill run a successful sales business which operates across the uk. In 2013, he was introduced to a man called scott kidd who sold designer clocks from his leicestershire company. Plausible, very plausible. You would, you would 7 he was just one of your kind of a naturally decent guy on the phone. If you asked him a question, he gave you a straightforward answer. He was very, very plausible. Nick agreed to become a sales agent for mr kidd, selling his clocks to retailers around the country. But, within just a few months, there were problems. Customers started to get short deliveries. Then our payments started to dry up. And then you get a little kind of radar on your, your kind of head says hold on a minute, somethings not right. Nick was owed £4,000 and customers began to question his integrity. A phone call from another business owed money by mr kidd, led nick to discover a string of others who hadnt been paid either. Ian cover, and his wife annemarie run an electrical business in leicester. Two years ago, ian rewired mr kidds warehouse but was never fully paid. Its not uncommon to be chasing money. For any business its the bane of the daily or weekly exercise you know. But after months of being fobbed off, ian and annemarie decided to turn detective and investigate mr kidds past. What they discovered about him shocked them. Well, he was a bankrupt, he was a disqualified director and he was actually on license from prison. Yet he was signing compa nys cheques. Hed been sentenced in 2011 to six and a half years for doing exactly the same thing, and he was allowed to just come out and just carry on doing what he was doing. Mr kidd had beenjailed after trading fraudulently whilst bankrupt, running a string of companies leaving creditors more than a million out of pocket. Yet he was able to set up another company from his prison cell and when he was released on licence halfway through his sentence, he went to work for himself. Ian and annemarie eventually got what was owed to them. But nick remains upaid, still owed thousands. Well, i care because i lost money and i want other people to not be put in that position. Thats unfair. You know im a genuine business person. I work hard, i pay my taxes, i pay my vat. Its unfair that these people should get away with it. Mr kidd, bankrupt and in prison, had simply created his list of companies through Companies House, the governments registration service. All hed needed was a working email address. Those that help legitimate businesses get started, are critical of the governments lack of scrutiny. Companies house dont do any checks at all on the identity of individuals setting up companies. All you need to do is provide an application online. There are no checks carried out to verify the identity or even whether those individuals are genuine individuals, and they can come from anywhere in the world. And Companies House deal with how many . 42 is the latest figure of incorporations passing through the governments own service. That amounts to how many a year . 230,000 approximately, slightly more in fact. How many of them would have undergone checks . Absolutely none. None. None at all. The Companies House registration process relies on honesty. And its the same if your business fails. The bankruptcy process depends on people coming clean about what they can pay and what assets they have. The onus is on the bankrupt to tell the truth and they must tell the truth, thats the law. Whatever assets that you have are sold off by whats called the trustee in bankruptcy and your creditors are paid off. And thats why its important that when people go before the trustee in bankruptcy, they have to tell the truth. They have to say where their assets are so that the trustee can realise them. But as glenn knows all too well, thats not always the case. Meet alan yeomans. A derbyshire businessman who made his money in property before going bankrupt. During the process, he was asked what assets he had. Furniture valued at £300, he replied. A watch he valued at £30. Oh, and he lived in a green shed. The trustee in charge of his case believed him. It was only when police began to investigate mr yeomans for money laundering, that glenn wicks and his team were called in to re examine the case. You will remember that alan yeomans told the official receiver that he lived in a shed, in his mums back garden. Right, 0k. What i am going to show you is what he actually lives in. Oh, my gosh. And thats the shed. It is probably one of the biggest sheds ive ever seen. Inside this shed, a six bedroom mansion where investigators found a treasure trove of fine art and antique furniture. Its complete with its own disco and a gym. And behind a 6 foot oil painting, a secret door leading to another money maker. A cannabis farm. All of which he was jailed for. Well, to be fair to mr yeomans, he wasnt lying, he was living in a shed. Its misleading the official receiver at the very least to say he lived in a shed when in fact he called his property shedley manor. I cant quite believe the scale of it, and the audacity of it. He was sticking two fingers up to you guys and the system at every turn. This was ruthless fraud. This was a man who deliberately set out to defraud his creditors and did it until he got caught. Nobody says, let me go and see it. Let me check. Not on this occasion, no. Trustees always used to do that, or very often had the ability to do that, but now theres just so many bankruptcies and so much debt that they dont have the ability to every time go out and check what people are telling them. So, the process relies upon the honesty of the person being investigated. Making it a challenge for those whose job it is to get money back for the creditors. What are some of the tricks of the trade . People will give assets away, transferring property into relatives names or into company names. Creditors will be falsified and they will be paid so it looks as if legitimate debts are being paid. Income will be hidden, Bank Accounts will be hidden, jewellery will be hidden. You can often see a white line around the wrist where the watch has disappeared. So people hiding things. You get paid out of the pot. Is there a time when you have to call it a day because actually youre not convinced youre going to get that asset or realise the money . Yes. Of course theres a balance. Theres always a cost benefit analysis. Perhaps the funds are in an incredibly difficult regime for example and you just are not going to be able to get them. Well, then you just have to draw a line on it, write off the money that youve spent and move on to the next case. The incentive is therefore on the dishonest debtor to make it as complex as possible . Yes, but i mean theyre fraudsters. Thats what they want to do. They want to keep the money for themselves and not pay their creditors and not pay the government. For those who do get caught, they face the severest sanction possible . A bankruptcy restriction 0rder. For up to 15 years, youre banned from being a director, you cant form or manage a company, or get credit over £500. More than 1,200 bros have been imposed across the uk. Effectively forcing those who receive them to take a backseat in the business world. But what about those for whom the backseat simply wont do . The seaside town of dunoon, in argyllshire. Home to ferries, fish suppers and the finest radio show this side of, well, dunoon. Live and local. Come on in, pull up a chair. Itsjust me . Malcolm, on dcr 97. 4 fm and tune in radio. These are the dulcet tones of dj Malcolm Scott. Swearing gives you a sense of calm, control and well being. Every week, he entertains his loyal listeners with his modern classics. Lets have a bit of corner shop. Hellloooo. This is malcolm here, hello. He may sound like dunoons answer to Alan Partridge but hes actually kind of a big deal. Malcolm scott was a multi millionaire grain merchant. One of the biggest donors to the conservative party, he lent his private jet to some of its biggest figures. Former Prime MinisterDavid Cameron used it to fly from glasgow to gatwick and dundee to oxford. And mr scotts close friend William Hague also benefited. He used the plane a number of times, including to fly to the Ulster Unionist Party conference in belfast. This journey valued at almost £4,000. He was even the partys treasurer in scotland. In 2012, his Business Empire came crashing down and he was declared bankrupt with debts of more than £41 million. I think well finish at that. During the bankruptcy investigation, mr scott led the trustees on a very deceitful dance indeed. He hid a speedboat, wine collection, fishing rights, assets in the bahamas and even claimed a break in at his house, some items later found being sold at auction. He failed to account for the proceeds. And all the while he was trustee director of the crimestoppers charity. By 2015, the authorities had had enough and Malcolm Scott was hit with a lengthy bankruptcy restriction 0rder. Until 2021, hes banned from being a company director. From even forming a company. The thing is, ive been keeping a very close eye on mr scott and whatever hes doing, hes not taking a backseat in business. Every few weeks he travels from his home in the west coast of scotland to Northern Ireland. I watch as he visits Development Site after Development Site. All bought at auction and Malcolm Scott with the keys to them. Everywhere he goes, ifollow, including to a Solicitors Office in coleraine. What is he doing in there . I then watch as he heads to this Large Development in dervock, in county antrim. He greets the builder, surveys the site. He looks like hes the boss. Now, the paperwork for this Housing Company shows its owned by a man called alexander duncan. Its a Company Called sandnewco ltd . Hes listed as the director. When you look at the other companies that hes got, he makes board games. This is a housing development, and its a big one at that. I wonder whether Malcolm Scotts really the director of this company. Maybe not on paper, but i wonder whether hes a shadow director. Is he breaching his bankruptcy restriction 0rder . To try and find out, i arrange for a member of our Production Team to meet with Malcolm Scott. Hell go undercover, posing as a potential investor, to hear what mr scott says about the business. The important thing is you need to ask what the Company Structure is. After weeks of negotiations, mr scott finally agrees to a meeting in Northern Ireland at the dervock site. Hi. Hello. Malcolm . Nice to meet you. Not bad at all. Nice to meet you, youre looking well. He starts by explaining the structure of the company. Its sandy and myself. Under malcom scotts bro hes banned from managing a company or even giving the impression he is managing a company. Yet here he is stating hes the Decision Maker. So where does he rank in the Company Hierarchy . 0n the more corporate side of things, youve got bleep and then next one up. Me. You. Me, yes. And thats it, you are the head shed. Yes. Yes, thats it. Exactly. So a disgraced, dishonest and banned director appears to be running this housing development, acting as a shadow director and using a clean frontman for the paperwork. A direct breach of his bro. And, apparently, it doesnt just stop at dervock. And we have got a massive site in glasgow. Right. So, were going in for planning on that next year for 300 houses. Wow so, i can let you see that. An offer too good to pass up. And this is the site, in netherburn in central scotland. Its a big piece of land . 32 acres, 16 of which already have planning permission for housing. Malcolm scott arrives for a second meeting with our investor. How are you . Not bad, yourself . He outlines his plans for hundreds of homes. Youve got another 100 to 150 units in there. I see, right ok. And then another 100 there. Right, got you. Interestingly, the drawing mr scott shows us has the name of a Different Company on it. Instead of sandnewco 0ne ltd, as at dervock, this time its loch leven two. So is there a loch leven 0ne as well . Theres a loch leven one at galashiels. Right, and is that yours as well . Yes, yes. Yeah. How many have you got . Thats, well weve got four at the moment. If this is true, it would appear Malcolm Scott is a serial breacher of his bro. And why not . From what he says, the rewards are worth it. And so, with sales pitch complete and a Firm Handshake goodbye, Malcolm Scott drives off. Just a few days after our meeting and mr scotts visit to the solicitors in Northern Ireland begins to make sense. I find a new business on Companies House. Its registered address, the Solicitors Office. Its called northside residential. Its another property business. Now, this time, hes gone one step further. He lists himself as a person with significant control hes holding himself out as the Decision Maker in the company. I mean he says there is no one above him. Youre not allowed to be a director. Hes not a named director, but hes acting as if he were a director, or he is allowing someone to form the perception that he is a director. Let me show you this. We saw him go into a Solicitors Office and a few weeks later this company was formed. Any red flags there for you . Hes just formed a limited company. And hes a person with significant control. The bankruptcy restriction 0rder does not allow you to form a limited company. Thats what hes gone and done . Yeah. That is a breach of the terms of the bankruptcy restriction 0rder. Breaching a bro can lead to a jail sentence of up to two years. This is the head of the Government Agency in scotland which gave Malcolm Scott and others like him their bankruptcy restriction 0rders. For the rest of the uk, its the Insolvency Service which issues them. Who monitors bros . There is no positive monitoring of bros. We rely on creditors to take account of the fact that there is that Public Record of the red flag against these debtors and we would, of course, follow up any information about debtors breaching the terms of their bro directly. Nobody is monitoring them . Not proactively, no. Not actively . Yeah. Do you see the kind of weaknesses that im highlighting here . Its like tagging somebody with an electronic tag for bad behaviour but actually its not linked to anything, so whats the point . Well, i would disagree. The record is there, it is publicly available, its easily searchable and when the particular debtor tries to apply for credit that flag will clearly show. I ask him about Malcolm Scott and our evidence of him appearing to breach his bro. Leaving aside the particular case, if people are breaching their bros, yes, that is serious. Ill take away the evidence that youre prepared to provide us and well have a look at, look at the case and i cant say anything further than that. There is no suggestion of any wrongdoing on the part of the Solicitors Firm in Northern Ireland. Alexander duncan, the registered director of sandnewco 0ne ltd, told us that Malcolm Scott was an employee of the business, with no executive Decision Making authority. We asked Malcolm Scott for a statement and through his solicitor he denied acting as a director of any company. How effective do you think the system is currently . I think it could be a lot more effective. An independent trustee will have not only the specialism and the resource to be able to conduct complex investigations but also they are more flexible in terms of resourcing and the skills that they can bring to a case. The Insolvency Service, in your opinion, doesnt have that . I dont think any Government Organisation will be able to do that so flexibly and so quickly. So the unscrupulous become the untouchable . Sometimes thats true. There are serial fraudsters out there who, who are the clever ones and im convinced we dont know who they are. Its only the ones who make a mistake and leave a paper trail that allows us to investigate them and to bring them tojustice. My investigation has revealed a bankruptcy system fraught with problems. A lack of resourcing, regulation, a lack of monitoring and robust punitive measures. The government is quick to say that business is key to a healthy economy. But allowing the unscrupulous to flourish puts that at risk. Welcome to bbc news, broadcasting to viewers in north america and around the globe. My name is mike embley. Our top stories the president of south korea says he wants a lasting peace with the north after the two countries agreed to hold military talks. Flash floods and mudslides in Southern California leave at least 13 dead. A search is underway for survivors. We dug down and found a little baby. We got it out, got the mud out of its mouth. I hope its ok. 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