Bankruptcy Fraud Probe Unveiled

"Bankruptcy Fraud victimizes all of us. It is wrong, it is cheating, and it is criminal. We want to make it clear that such conduct is criminal and will be prosecuted."

Attorney General Reno, US Justice Department

"The bankruptcy process only works fairly if all who are involved tell the truth. Lying under oath, concealing assets and other types of misconduct hurt innocent people and bring the entire bankruptcy process into disrepute."

Tom Monaghan, US Attorney for Nebraska

The above statements made by US Attorney showed their commitment and seriousness in fighting bankruptcy fraud. It is also cleared that bankruptcy system is intended to provide deserving debtors a fresh, new start. Unfortunately, it is being misused to cheat creditors, merchants and others who had loaned money. In an article published by Omaha World Herald (Nebraska) on February 29, 1996, seven Nebraskans were named in federal indictment as part of nationwide bankruptcy crackdown. The summary of theses cases are as follows:

Perpetrators	Charge
Irene Piper, 36	·  Fraudulent transfer and concealment of livestock having value of about $107,000 to defeat provisions of the US Bankruptcy Code.
Clarence Padrnos, 55	· Six count indictment for concealing property of the bankruptcy estate of Northwestern Steel & Supply Co. ·   Making false reports to the US Bankruptcy Trustee. ·  Transferred $24,000 in estate funds for his personal use.
Edward James Kula, 65	· Two counts of concealing about $33,000 from the trustee, examiner and creditors in his personal bankruptcy proceedings.
Betty Wullschleger, 63	· Making false oaths and false declarations relating to two bankruptcy filing.
Sandra Sue Calrson, 58	· Concealing jewelry worth more than $7,000 from creditors in her bankruptcy filing.
Paul F. Sprock	·   Fraudulently transferring an insurance check worth $2,589 with intent to defeat provisions of the Bankruptcy Code.
Rhonda Pomeroy, 35	· Falsely testifying under oath during a meeting of creditors in her bankruptcy proceedings, falsely testifying regarding her employment status.

Reference:

Jordon, S. (1996). Bankruptcy Fraud Unveiled, Omaha World Herald (Nebraska).