Estela Martinez, 54, of Dallas, was sentenced on Friday to one year and one day in federal prison for making false statements during multiple bankruptcy filings. Martinez, who pleaded guilty in August 2013 to one count of making a false statement under the penalty of perjury, failed to show up for her July 9th sentencing hearing and was arrested at her home by authorities the following day. She was then ordered to be held in custody until receiving her sentence on July 18th.
According to the indictment, Martinez filed six voluntary bankruptcy petitions in April 2009, July 2009, January 2011, March 2011, November 2011, and in November of 2012. In each of the 2011 and 2012 filings, Martinez falsely and fraudulently omitted information concerning previous bankruptcy filings which she was obligated to disclose, including her assigned social security number. In each case the federal judge dismissed Martinez’s Chapter 13 bankruptcy petitions because she failed to report her income and submit other information in a timely manner to the court.
The prosecution of Martinez is part of a recent Bankruptcy Fraud Initiative within the Northern District of Texas. Since 2013, seven debtors have been charged with various felony offenses, four have entered guilty pleas, and two have been sentenced. Another defendant is currently awaiting trial, and two others remain fugitives.
This case was investigated by the Social Security Administration and the Office of Inspector General. Assistant United States Attorney David Jarvis led the prosecution.
James LeDonne, the owner of Paragon Technology Group, was arrested on Monday after a federal grand jury indicted him of fraud last week. Ledonne, 59, faces eleven counts of wire fraud, three counts of mail fraud, one count of conspiracy to commit fraud, one count of bankruptcy fraud and one count of interstate transportation of stolen goods. He is scheduled to be arraigned on Thursday at 2:00 p.m.
The indictment alleges that LeDonne accepted down payments for fiber-optic splicing vehicles ordered by contractors living outside of the Elkhart area. He most often never delivered these units to the customers despite promising various delivery dates. As part of the scheme, LeDonne used a series of fraudulent bankruptcies to avoid refunding money to the victims. He would then create a new company and victimize other prospective customers through the new company.
The charges of transporting stolen goods stem from an incident in 2012 when LeDonne obtained a built trailer from a customer by alleging that the vehicle had been recalled. He then took the same trailer and delivered it to a customer in Georgia after altering the vehicle identification number number.
The investigation of this case is being conducted by the Federal Bureau of Investigation, the United States Postal Inspector Police, and the Indiana State Police.
Court records show that LeDonne also received a five year prison sentence in 1993 after pleading guilty to orchestrating fraudulent check and check kiting schemes in Elkhart.
Steven K. Zinnel, 50, has been sentenced to 17 years and eight months in prison for 15 counts of bankruptcy fraud and money laundering. The sentence, which was handed down by the United States District Court in Sacramento, is thought to be the longest ever imposed in the district’s history. Zinnel was also ordered by Judge Troy Nunley to forfeit real estate and corporate interests worth nearly $3 million and pay fines totaling nearly $500,000.
Evidence shown at the trial confirms that Zinnel is guilty of concealing assets from the bankruptcy court including his “silent” investment in an electrical infrastructure company. Zinnel had invested hundreds of thousands of dollars and prepared court filings, but his name ever appeared in any public filing of this company. The company paid distributions to Zinnel as an owner, but those distributions were disguised as payments to a shell company held in the name of co-defendant Derian Edison. The court ordered Zinnel’s interest in that company forfeited, and the government is to receive $2.8 million from its sale to its records owner.
After successfully concealing the property and the discharge of his bankruptcy, Zinnel laundered funds back to himself through Derian Edison’s company, her attorney-client trust account, and her personal bank accounts. Zinnel used several different corporations registered in others’ names to disguise his control of property and to direct the disposition of the money.
The investigation of Zinnel began after he called the Federal Bureau of Investigation to investigate his wife. According to documents on file with the court, when agents followed up on Zinnel’s call to the FBI, his own bankruptcy crimes were discovered.
This case is a product of an investigation by the Federal Bureau of Investigation and the IRS-Criminal Investigation. Assistant United States Attorneys Matthew D. Segal and Audrey B. Hemesath prosecuted the case.
A United States District Court jury has found Michelle Malufau, 47, guilty of bankruptcy fraud related to a Chapter 7 bankruptcy that she filed in 2011. The verdict was received at the close of a four day trial and less than an hour of deliberation. Malufau is convicted of making false statements on documents filed in 2011 and lying under oath. She faces a maximum sentence of up to five years in prison on each charge when she is sentenced on February 27, 2013 by Senior United States District Judge Helen Gillmor.
The evidence presented at the trial showed that Malufau fraudulently concealed at least three assets that she owned and/or controlled during her 2011 bankruptcy including: a house on the North Shore of Oahu, which had over $322,000 in equity in it; a bank account, and a rental home. Malufau received discharge of debt that totaled more than a $1 million in this bankruptcy proceeding.
Michelle Malufau is the wife of a former guard at Halawa Correctional Facility, Feso Malufau, who was accused in a federal racketeering indictment of receiving bribes.
This investigation was conducted by the Internal Revenue Service-Criminal Investigation and the Federal Bureau of Investigation. Assistant United States Attorneys Michael Nammar and Andrew Hatton prosecuted the case.
Brett Pohle, 45, has been sentenced to 30 days in jail, a $5,000 fine, and four years of supervised release for bankruptcy fraud according to United States Attorney John W. Vaudreuil. Pohle was also ordered to pay restitution back to his bankruptcy creditors by United States District Judge William Conley,
Pohle, of Neillsville, Wisconsin, pleaded guilty to concealing assets in his Chapter 7 bankruptcy filing on June 14, 2013. He admitted to convincing another individual to sign a false bill to support Pohle’s story that he had sold a recreational camper to him, when in reality, Pohle still owned the camper. The value of the camper was only $4,800 but Judge Conley believed sentencing was appropriate because Pohle’s crime “went to the heart of bankruptcy system and the justice system.”
Pohle also convinced the same man to commit perjury in February 0f 2011 in before the federal grand jury that was investigating the case. According to Pohle’s attorney, he was charged with the mildest form of witness tampering because it did not involve coercion or threats.
Judge Conley gave Brett Pohle an October 6, 2013 reporting date to a jail that will be determined later by a court order.
This case was investigated by the Federal Bureau of Investigation with assistance from the United States Trustee’s Office. Assistant United States Attorney Meredith Duchemin was the prosecuting attorney.
A New Jersey dentist and owner of three dental practices in Bergen and Monmouth counties, has been sentenced to 21 months in federal prison for tax evasion and bankruptcy fraud. Stephen A. Beukas is guilty of evading more than $800,000 in taxes and failing to disclose almost $1.3 million in income earned in 2008 when he filed bankruptcy on his practices. Beukas, 47, previously pleaded guilty in June 2012 before United States District Judge Renee Marie Bumb. He was also sentenced to two years probation, imposed a $50,000 fine, and ordered that he pay $69,883 in restitution to the bankruptcy trustee for distribution to creditors.
In a pleading of leniency, defense attorney Rocco C. Cipparone Jr., noted that Beukas had a 20-year history of providing free dental work to patients and provided documentation to the judge showing that the value of Beukas’ charitable acts exceeded $170,000 in the last three years.
Beukas was among seven that were named in a 31-count state grand jury indictment for their alleged roles in a scheme to defraud the Medicaid program of over $5.5 million. Of the seven indicted, five were dentists and two were managers.
Special agents of the IRS and the Newark Office of the US Trustee led the investigation, in coordination with the Financial Fraud Enforcement Task Force.
John L. Smith, former head football coach of the Arkansas razorbacks, may be out of the scalding hot spotlight of the SEC media, but he has been unable to stay out of the news, and may be in need of a good criminal bankruptcy fraud attorney.
Smith, who took the helm of the Arkansas football program after the scandal involving Bobby Petrino and his affair with an employee, is now under scrutiny for his well-publicized bankruptcy filing. Some of Smith’s creditors have cried foul over the details of his bankruptcy, claiming that he has fraudulently hidden assets from them. While bankruptcies are filed in this country everyday without much fanfare, Smith’s bankruptcy made national news based on his fame as head of the preseason top-10 football program, as well as the huge amount of debt he reportedly accumulated of up to $40 Million dollars.
It is reported that the United States Department of Justice has even initiated an investigation into whether Smith’s activities constitute criminal bankruptcy fraud, though no charges have been made public at this time. If the federal government does uncover evidence supporting Smith’s creditors claims, it could be bad news for Smith.
Bankruptcy petitions require the filer to affirm under oath that the contents of the petition are accurate. Intentionally including false information (or failure to provide correct information) in a bankruptcy filing is a federal criminal offense that can lead to significant criminal penalties, including potential prison time.
If you, or anyone you know, is a target of a criminal bankruptcy investigation or criminal bankruptcy prosecution, the white collar attorneys at Parkman & White would like to help. Contact us today.