Case Study - Middleton Man Indicted on Bankruptcy Fraud

Hello bloggers!

After understanding types of bankruptcy fraud, now let's have a look on some real cases happening outside. Today we are going to share an article from Wisconsin Law Journal published on March 16, 2015. Happy reading everyone!

Case Example: Mauston Home Centre LLC

Paul Graves, 59 faces up to 30 years in federal prison after a federal jury has indicted him for bankruptcy fraud. Graves and his wife owned and operated Mouston Home Centre LLC, a hardware business in Mauston. They owed $500,000 to creditors of the business.

The indictment alleges that;

• Graves and his wife, devising a scheme from February 2009 to August 2012 to defraud those creditors. Graves concealed his use and control of the inheritance amounted $800,000 that he was entitled to as a result of his mother's death in February 2009. Among assets concealed were as follows:
• 9 acre island in Canada with a 2 bedroom cabin used by Graves for recreation since 1995;
• his wife's joint ownership interest in Jackson County Home;
• Her joint ownership of 2 bank accounts in Black River Falls worth $200,000;
• joint ownership of a rent free home in Middleton
• a 2009 Mercedez ML350 bought with money from the disclaimed inheritance.
• Graves concealed and failed to fully disclose assets from creditors when he filed for Chapter 7 bankruptcy on May 12, 2010. 

From this case, we can learn that perpetrators conceal his assets as an attempt to preserve property for futures use and to deprive creditors from their share of assets. Besides that, Graves also conducted a bustouts scheme where he order supplies from creditors and did not pay them. Graves also did not fully disclosed those inventory in his bankruptcy statement.

Reference:

Strebel, E. (2015). Middleton man indicted on bankruptcy fraud, Wisconsin Law Journal.