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Bankruptcy Cases in the News

Bankruptcy Cases in the News

In a case just decided by the 6th Circuit Court of Appeals the conviction of a physician for violation of 18 USC 152 (1) and (2) was upheld. The physician, or debtor, filed a bankruptcy, and failed to schedule as an asset an extensive and valuable collection of collector wines. When the wines were discovered by the trustee a referral was made to the United States Department of Justice for prosecution. Please see USA v. Joseph Carver, Case No.: 12-3026.

On appeal the Court found that:

        To be convicted of concealing assets in bankruptcy, in violation of 18 U.S.C. §152(1), the evidence must show that a bankruptcy proceeding existed under the Bankruptcy Code, the defendant concealed interests in property from the bankruptcy trustee or creditors, such interest in property belonged to the bankruptcy estate of the defendant, and the defendant acted knowingly and fraudulently. Wagner, 382 F.3d at 607. A conviction for making a false oath in bankruptcy, in violation of 18 U.S.C. §152(2) requires proof that there was a bankruptcy proceeding, the defendant made or caused to be made a false declaration or statement under penalty of perjury in the proceeding, the declaration related to some material matter, the declaration was false, and the defendant made the declaration knowingly and fraudulently. Sixth Circuit Pattern Criminal Jury Instructions § 10.01 (2011) (mail fraud) (adapted); cf. United States v. Spurlin, 664 F.3d 954, 962 (5th Cir. 2011). Carver’s convictions for these crimes are amply supported by the evidence.

Accordingly, Dr. Carver will have to spend the next 24 months or so in a federal prison for making a false oath in his bankruptcy case. As discussed in other blogs, the trade-off for a fresh start is disclosure of all assets and turn over of non-exempt assets for creditors. Failure to do so can lead to the dismissal of your bankruptcy and even time in prison.

[Guy Vining, a bankruptcy attorney, in metro-Detroit, maintains his office in Taylor, Michigan, where he serves the downriver communities of Monroe, South Rockwood, Gibraltar, Brownstown Township, Grosse Ile, Woodhaven, Trenton, Southgate, Riverview, Allen Park, Lincoln Park, Dearborn, Dearborn Heights, Westland, Wayne, and Ecorse. If you or a family member of friend would like a no-obligation no cost consultation/financial analysis, just call or E-mail Guy Vining of Vining Law Group, P.L.C to schedule a meeting.]