Bankruptcy fraud

[jennifera]

Sheesh!

LOL at HomeGuru ........

Apparently....in Minnesota.....they don't require written documentation of anything stated on the petition. That is how he got away with (for now anyway) submitting a much lesser income amount for 2001 and 2002, and his estimate of $12,000 for 2003. His BK was filed in May 2003 and dischg'd in Aug....as of Sept, he had earned over $24,000 with his former employer (sales commissions paid while on disability for depression). On June 1, 2003 (only two weeks after filing) he was working a new job paying $50K a year. Wasn't he obligated to disclose this to the trustee? Would it have excluded him from filing Chapter 7?

Buck, you don't know this guy like I do.....he planned this....he's a psychopath. He ran up credit cards/equity lines of credit totalling over $60K. Over the past three years, he's made almost $300K. He is not destitute or he would have sold the $250K house he's living in. He has a 401K worth over $300K that he omitted from the petition. We all pay for BK fraud.....I have no personal grudge against him.....just trying to right a wrong. And if this isn't considered fraud, I don't know what is! Why is it so seemingly difficult (from what Ladynred said) to get a case reopened when there is good solid evidence??? I sent copies of his W-2s, 401K statement, notes from his doctor dated Jan 2003 that he planned on filing BK, and proof of wages for 2003. Shouldn't that be enough proof?

And everyone......anyone.....more advice would be most welcome but please let's all just try to get along! Have a good day out there folks!

 

[InsulinRules]

Hmmm...I was under the impression, obviously wrong, that what happened post petition to your life was usually NOT germaine to the petition, unless it was a windfall like the lottery

Specifically, if you were making $24,000 a year before and on the day of the petition, the fact that you got a new job paying more 3 weeks after petition was not a factor.

I think LadynRed summed it up one time as EVERTHING before the petition is the bankruptcy estate's, everthing after filing is yours."

 

[HomeGuru]

Hmmm...I was under the impression, obviously wrong, that what happened post petition to your life was usually NOT germaine to the petition, unless it was a windfall like the lottery

Specifically, if you were making $24,000 a year before and on the day of the petition, the fact that you got a new job paying more 3 weeks after petition was not a factor.

I think LadynRed summed it up one time as EVERTHING before the petition is the bankruptcy estate's, everthing after filing is yours."

**A: not if there is fraud involved on the part of the BK petitioner.

 

[anabanana]

Look Buck-- do you think the rest of us aren't picking up the tab for all the frauds who slip through this overburdened system? We are. The BK system is designed to offer a "fresh start for the HONEST debtor," not a back door for the crafty deadbeat.

Jennifer-- You have standing BK trustees in Minnesota. They are overseen by the U.S. Trustee. Fraud is investigated also by the FBI and U.S. Attorney.

If this is about fraud, there is no reason you should have to hire a private attorney to deal with it, whether or not you stand to gain from him being busted. (Of course, if you do stand to gain fromit, you'll want an atty to help protect your interest in that regard.) But LadynRed is right, the Trustee is bizzy bizzy and your case has to be compelling and lemme just tell ya, you gotta make it easy for them. Also, if it's already over, the standing trustee probably doesn't much wanna deal with it. So send all your proofs again to the Trustee, BUT ALSO copy to the U.S. Trustee overseeing that Trustee's office....that would be
ROBERT B. RASCHKE, ASSISTANT U.S. TRUSTEE
1015 U.S. COURTHOUSE, 300 SOUTH 4TH STREET
MINNEAPOLIS, MN 55415
Phone: 612-664-5500 Fax: 612-664-5516

That's the guy your tax dollars are paying for his diligence in protecting the integrity of the BK system. Also, the FBI hereabouts (FLA) doesn't get excited for less than $50K in fraud, but that might vary by region. The frikken BK rules vary, so who knows what else might. Good luck.

 

[Ladynred]

Jenn,
If you don't get any action out of the Trustee, to straight to the FBI. I was told that this is possible by a guy who was an investigator for a Trustee for 13 years. FBI will be interested if the fraud is 50K or more.

 

[jennifera]

One last thing......

Just want to itemize these things and get a yes or no on the fraud issue.

1. Not reporting his $315,000 401K or his company pension plan (which will be ~$1200/month at age 65). He checked NO for that box on the petition.

2. Lying about his income for 2001, 2002 and expected income for 2003 (by ~$40,000 for each of these three years).

3. Obtaining a job for $50,000/year two weeks after filing but didn't notify BK court. He was on disability for five months from his former employer at the time he filed but knew at the time he filed he was taking the $50K position. Would that have precluded him from filing Chapter 7?


Thanks all for the info.

 

[anabanana]

Jenn--

Yes or no? HA! There is only one correct answer in bankruptcy, and that is, "It depends."

Felt good to get that off my chest, now back to you...

>>>1. Not reporting his $315,000 401K or his company pension plan (which will be ~$1200/month at age 65). He checked NO for that box on the petition.

Many debtors try to get away with not reporting certain assets, such as pensions, because they are exempt. However, not all pensions are exempt, and the exemptions vary by state. Bottom line, they're supposed to schedule it ANYWAY, and let the trustee make the determination if it's a qualified ERISA instrument. But you gotta show it wasn't just "Oops, I forgot." You have to show bad faith, an intent to conceal. Further, fraudulent concealment of an assets often "works as a forfeiture of exemption rights" see Yonikus, 996 F2nd at 868, also Doan, 672 F2nd 831, 833, Miller 255 BR 221,222 and a bunch more. If you have Pacer, get into Grogan, 02-36231 and read the judge's memorandum decision. You will find it most encouraging.

2. Lying about his income for 2001, 2002 and expected income for 2003 (by ~$40,000 for each of these three years).

Yow! Tax returns? The Trustee should have looked, if any of this was fishy at the time. And if you have copies of the debtor's tax docs, send them along to the US. Trustee.

3. Obtaining a job for $50,000/year two weeks after filing but didn't notify BK court. He was on disability for five months from his former employer at the time he filed but knew at the time he filed he was taking the $50K position. Would that have precluded him from filing Chapter 7?

Trickier. It's post-petition, the Immune Zone! You've got to show that he knew this when he filed. Did he have some kind of letter of understanding? Did he have a legitimate offer? He could have been converted to a Ch. 13 if he had regular income, and he'd have to reorganize. How far under the bridge is all this, anyway?

 

[HomeGuru]

Re: Sheesh!


iginally posted by jennifera [/i]
LOL at HomeGuru ........

Apparently....in Minnesota.....they don't require written documentation of anything stated on the petition. That is how he got away with (for now anyway) submitting a much lesser income amount for 2001 and 2002, and his estimate of $12,000 for 2003.

**A: I suggest you read the BK petition. Income for the previous 2 years of the BK filing year must be stated.
*******

His BK was filed in May 2003 and dischg'd in Aug....as of Sept, he had earned over $24,000 with his former employer (sales commissions paid while on disability for depression). On June 1, 2003 (only two weeks after filing) he was working a new job paying $50K a year. Wasn't he obligated to disclose this to the trustee?

**A: yes.
*****
Would it have excluded him from filing Chapter 7?

**A: it depends.

 

[jennifera]

Hmmm....

Thank you Banana and Guru for the info. The petition was filed mid-May 2003; discharge was granted in Aug 2003. I have sent a letter and enclosures to Robert Raschke (copies of W-2's for 2001, 2002 and wage statements for 2003, his 401K plan statement showing the $312,000 balance and job offer dated May 30 for $50K a year). Hopefully it is compelling enough.

Over $60,000 in debt (credit card and equity lines) was "wiped away". I remember someone noting that it usually takes $50,000 for them to be interested.

This guy was able to put $10,000 a year in his 401K.....from 1999 to 2002. That seems like something BK court should be made aware of as well. He continued to do that but couldn't pay his Discover card bill??? Money was tight but he didn't move out of his $250,000 home??? Come on........F R A U D!

************
Banana.....in answer......the pension plan omission definitely wasn't an "oops!"....... I believe it was embarrassment that kept him from showing it.....I know that sounds "stupid" but you have to know the guy...... i mean jerk.

I don't know how he got away with being untruthful with past income......but he did.

And as far as the job offer, he called me mid-May (prob the day he filed) and dropped about six bombshells on me including the BK filing, he was leaving his current job (an 18-year career with over $100K salary) after being on disability with them for 5 months (disab would run out the end of May) and that he was taking a job at half the pay with a customer. So he told me he would need to get the child support reduced. He knew at the time he filed but didnt disclose it. He also used the present child support amount to his advantage but didn't make note that he would be taking me to court to get it reduced.

*****************

Ladynred....I'll probably give it a couple more weeks (U.S. Trustee received my letter/encl the middle of March) then I'll contact the FBI.......thanks for your info.

 

[Ladynred]

You're welcome

HG is right about the disclosure of his 50K job, even if he didn't actually TAKE it until after he filed. The Trustee's generall ask at the 341 meeting if anything has changed in your situation since the petition was filed. If he said 'no' - he lied - bad thing to do.

 

[anabanana]

The problem with disclosing info at the 341 rather than on the schedules is that there's some wiggle room that'll depend a lot on the diligence (and vigilance) of the trustee. I've watched quite a few of these by now, and some Trustees are better than others, but even the best don't write down every answer to every question, and a lot of them accept some pretty lame answers...

"I got a new job, but I'm not sure how much I'll be making, it's commission, I really don't know, a lot less than before, but I don't know..." Wiggle wiggle evade and wiggle.

The trustee asked my ex a lot of things, and asked for a lot of documentation to be provided afterwards, but he didn't provide it, and the trustee didn't notice and nothing happened until I did what Lady there suggested and dragged out every bit of documentation I could muster to refute his version of reality. I had to raise hell and put a prop under it, but it finally paid off. I finally got the Trustee interested enough (in Chapter 13, they get a cut of the action) so he started diggin' around and it looks like he might have found assets even i didn't know about. Also look for some posts by DCW88 about this same topic.

And here's a couple tidbits for you .... "the homestead of such debtor and the debtor's family, and be exempt from seizure or sale under legal process. (Sec. 501.01.) The amount of such homestead exemption, however, may not exceed $200,000..." if you say his house is worth a quarter mil, some of it might not be exempt, but that's close enough that the market could account for the discrepancy...

Down here in Florida it's the biggest damn debtor haven you ever saw, but there are some limits to what he can keep outside the BK estate in MN, and it looks to me like that pension is WAyyyy over. Check out:

http://www.bankruptcyaction.com/mnexemptions.htm

and if you've got nothing to gain or lose, have fun learning. It's really complicated, and interesting, if everything you own isn't on the line.