February 19, 2017
Background:
- Small business owner sentenced to prison.
- Filed Chapter 7 Bankruptcy.
- Owner of a liquor store.
- When the small business owner sold the liquor store for $171,000, he had his parents deposit the proceeds in their bank account.
- Parents paid his expenses and gave him cash on a regular basis from the funds.
- This income/profit was never recorded in the Bankruptcy Petition.
Court Decision
- Debtor was sentenced in Federal Court to a one-year jail sentence.
- Ordered Debtor to pay back $119,000 in restitution (which is, of course, non-dischargeable in bankruptcy).
- Jury deliberated for several hours and found debtor guilty of all 6 counts of fraud.
Making false oaths and false statements in bankruptcy is a serious offense. As I remind my clients, honesty is the only policy when you come to the U.S. government for a fresh start.
