Updated Dec. 3, 2020: I am in Minnesota; the guy I was talking about is in Pennsylvania. To my astonishment he called me today and asked to take down this post. He said he had just gotten out of prison. Because I have no reason to wish him ill, I have updated this entry to delete the guy’s last name. He did say that if I had a client who was contemplating lying he could talk to the client and tell them how badly it turned out!
I recently saw a news report about a man in Pennsylvania who got caught in some serious lies in his bankruptcy.
XX was sued in the Court of Common Pleas in Philadelphia, along with a number of other entities. He lost, and in April 2014 a judgment for about $2,400,000 was entered against him. The bankruptcy case is xxxxx, the criminal case is xxxxx, and I believe the state court case is xxxxxx.
According to the criminal indictment:
On or about April 12, 2014, defendant XX purchased a 2009 BMW X3 for approximately $26,085. On or about April 14, 2014, defendant XX purchased a 2014 Porsche 911 for approximately $118,176. On or about April 15, 2014, defendant XX purchased a 2014 Porsche Cayman for approximately $68,267. Defendant XX charged all three cars to his American Express Centurion Card.
( I don’t know about you, but I don’t know if American Express card would let me charge $212,000 worth of cars in one week!)
Mr. XX then filed Chapter 11 bankruptcy (a reorganization) on April 21, 2014.
He “forgot” to list the BMW and the two Porsches in his bankruptcy paperwork. He “forgot” to list a lot of other stuff, too, including $214,000 of cash, a 21 foot ski boat, $30,000 of tax refunds, etc.
He was asked at his trustee meeting if he owned any vehicles (other than a $4,000 Harley and a leased Honda) and he flatly denied owning other vehicles.
I don’t know who “turned him in”, but someone did or somehow the justice system found out about it. A grand jury issued an indictment dated April 20xx; and the case wound its way through the system for a while, and in August 20xx there was a plea hearing. Mr. XX pled guilty to two counts, involving hiding the BMW and the two Porsches and making false oaths in his bankruptcy papers.
He has now been sentenced to a year in jail, three years of supervised release, a $50,000 fine, and some other conditions.
In the meanwhile, American Express sued him in his bankruptcy, and he wound up agreeing that he would not get a discharge of his debts.
It is probably true that some people lie in their bankruptcy paperwork. (For that matter, it is probably true that some people lie in reporting political contributions, and about how many fish they caught last week, and lots of other things). But this case shows that if you get caught lying in bankruptcy or hiding assets that there may be some serious repercussions. Mr. XX got his bills back, even though he filed bankruptcy, and he gets to spend time in prison, and he gets to spend three years on supervised release, and he gets to pay a $50,000 fine.
There is a saying: “Bulls make money, bears make money, pigs get slaughtered”.
Don’t be a pig!!
As always, if you have questions about bankruptcy, feel free to contact me.
Sam Calvert
1011 2nd ST N STE 107
St. Cloud MN 56303
320-252-4473
