Major retailer run by convicted fraudster collapses owing $1m, ‘no refunds’ for customers

The business belonging to a man twice named Young Australian of the Year, and who was later convicted of fraud, has collapsed with debts exceeding $1 million.

The business belonging to a man twice named Young Australian of the Year, and who was later convicted of fraud, has collapsed with debts exceeding $1 million.

Earlier this month, the NSW Supreme Court ordered Braaap Motorcycles Pty Ltd into liquidation.

Braaap was a motorbike distributor that sold brand new or used bikes, or leased them, and shipped all over the country, with headquarters in the Melbourne suburb of Carrum Downs. A social media page where past or current customers discuss their Braaap-branded bikes has more than 5000 members.

One of Braaap’s major selling points was its lifetime warranty offer and that was one of the reasons Queenslanders Liam Leonard and his wife decided to buy a motorbike from the retailer at the end of 2022.

With news of the liquidation, Mr Leonard told news.com.au: “We would like to know how to go about claiming for a paid lifetime warranty”.

Braaap owes 121 unsecured creditors at least $1.074 million, according to the appointed liquidators, Edwin Narayan and Graeme Ward of insolvency firm Mackay Goodwin in a report sent on Friday which news.com.au has obtained.

However, that figure is expected to rise, as a large majority of creditors including Mr Leonard having a debt amount listed as ‘TBA’ – meaning its still to be ascertained.

The now-defunct Braaap website.

Brad Smith was convicted of one count of fraud.

Brad Smith founded Braaap Motorcycles in Tasmania in 2008 when he was just 17 years old.

At first he rode the high, being named Australian Young Entrepreneur of the Year from the the Small Business Champion Awards and then Young Australian of the Year in Tasmania in quick succession.

Braaap and its associated businesses were doing well, with one news report claiming Braaap’s sales surged by 400 per cent in 2015.

Just a year later though, police raided the offices of Braaap Wholesale as part of an alleged “rebirth” scandal.

Rebirthing is considered a form of vehicle theft and often involves vehicles being assembled or reassembled with parts being passed off as new when they’re not.

In this case, NSW detectives reportedly arrested and charged Mr Smith with various fraud crimes for his alleged involvement in a syndicate that scratched off and replaced serial numbers to rebirth and resell motorbike models.

Mr Smith has always maintained he is innocent and was convicted of one charge of dishonestly obtaining financial advantage by deception, receiving a two year community corrections order. Other charges — three counts of fraud and one on dealing in proceeds of crime knowingly conceal — were thrown out or he was found not guilty.

In 2019, Braaap Wholesale pleaded guilty in a Tasmanian court to six counts of approval for the placement of identification plates and three counts of importation of vehicles requiring modification as part of the scandal, vehicle identification plates and modifications mishaps and was slapped with a $25,000 fine.

During sentencing, the magistrate said Braaap Wholesale’s failure to have motorbikes fitted with specified parts was not deliberate.

Mr Smith has been contacted for comment.

Braaap Wholesale went into liquidation in 2020 and now four years later so has Braaap Motorcycles.

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Mr and Ms Leonard are demanding answers.

Liam Leonard's wife bought this customised purple bike from Braaap. Image: Supplied

Liquidators of Braaap Motorcycles have hit customers with a hammer blow, saying that they won’t be able to fulfil orders or give out refunds.

“Unfortunately, our office will not be in a position to fulfil orders taken by the company prior to our appointment and will also not be able to provide you with a refund,” Mr Narayan and Mr Ward wrote.

“If you have paid the deposit with a credit card, you may be able to contact your credit card provider and discuss alternative options,” they added.

News.com.au has contacted the liquidators for comment.

Assets at Braaap include mechanical equipment, motorbikes and motorbike spare parts.

The motorbike company had just $69.27 in one bank account while others were in overdraft.

Mr Leonard is wondering what this means for his wife’s customised bike now that it has no warranty and he is asking for the full cost of the motorcycle — $5000 — to be reimbursed.

He’s particularly concerned because, despite them only having had the motorcycle for 18 months, there’s been three major issues in that period of time, causing him to dub the vehicle “a lemon”.

“On the first ride, we realised that the chain was way too tight. There was no flexibility whatsoever,” he said.

They had to use the warranty immediately to fix this.

“Then we noticed an oil leak starting straight after we replaced the chain. Because the chain was on too tight, it damaged the sprocket seals,” Mr Leonard added.

“Then the spark plug died. That’s unusual within the first few thousand kilometres. Normally they last a good 10,000 kilometres.”

Emails to Braaap were bouncing as of Monday morning and the website is no longer active.

As of Friday, the website was still active and its phone line was intact but rang out straight to a message inbox.

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Originally published as Major retailer run by convicted fraudster collapses owing $1m, ‘no refunds’ for customers