Chicago Bankruptcy Case United States v. Persfull Shows Dangers of Fraud
The Illinois case of two brothers charged with bankruptcy fraud shows the dangers of not following the complex rules of the court. This potential for fraud could be equally tempting for someone filing for Chapter 7 bankruptcy in Chicago.
In United States v. Persfull, two brothers were sentenced to 30 and 39 months in prison, respectively, for lying to a bankruptcy trustee.
This case highlights just how important it is to communicate openly with your Chicago bankruptcy lawyer in a bankruptcy case. While bankruptcy allows consumers to reap the benefits of having debts discharged, there are specific rules that must be followed. It is a complex process that must be handled by a skilled lawyer.
Because bankruptcy is a federal process, bankruptcy fraud is a federal offense, punishable by five years in prison, a fine or both.
According to U.S. Code Title 18, Chapter 9, Section 157, bankruptcy fraud occurs when someone files a fraudulent bankruptcy petition, files documents in a bankruptcy case that are fraudulent, or makes false or fraudulent representations in a bankruptcy case.
In Persfull, one brother, from Poplar Grove, filed for bankruptcy in 2003. Because his mother was ill and possibly close to dying, the bankruptcy trustee asked if the one brother would be getting an inheritance from his mom if she died. The trustee told him that if he did acquire any assets, that he was required to report it to the court.
On the day his debts were discharged through bankruptcy, his mother died, leaving him and his brother, from Rockford, with equal shares of her estate. The brother filing bankruptcy signed a disclaimer of his interest, but never told the bankruptcy trustee about the inheritance.
More than a year later, the trustee discovered that the man had inherited property from his mother's estate and saw that he and his brother had conducted a series of transactions. The U.S. Attorney's Office began investigating and eventually filed criminal charges.
According to court documents, the brother filing for bankruptcy had received two loans from his brother, one that allowed him to retire the mortgage on his primary residence and another that allowed him to buy a car and put money into a stock trading account.
He said he assumed they were just loans from his brother and had nothing to do with his inheritance. At trial and on appeal, the brothers claimed they were not attempting to defraud the government and their creditors, but rather were simply acting on brotherly love.
But they were convicted and sentenced to prison and on appeal, a court ruled that they were, in fact, guilty of bankruptcy fraud.
If you find yourself filing for bankruptcy, we urge you to be honest and keep an open line of communication with your Chicago bankruptcy lawyer. A skilled lawyer will help you not only avoid these serious charges, but also maximize the amount of debt you can eliminate.
If you need to speak to a Chicago bankruptcy attorney call the DebtStoppers Bankruptcy Law Firm at 800-440-7235 today for a free debt analysis. Call 800-440-7235.
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