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Criminal charges for debtor who failed to report $100,000 inheritance, fancy car

Charlotte Bankruptcy Lawyer Bryan W. Stone of Arnold & Smith, PLLC answers the question “Will anyone find out about my bankruptcy?”

 

A woman who filed for bankruptcy the day after a $100,000 inheritance check cleared her account has been indicted.

Escalade Mecklenburg Charlotte Bankrupcy Lawyer North Carolina Chapter 7 AttorneyThe woman, 57-year-old Deborah Campbell of Williamstown, New Jersey, inherited the $100,000 from a patient at Oceanview Center for Rehabilitation and Continuing Care, where Campbell was director of nursing. The care facility is located in Cape May, New Jersey.

The money was paid to Campbell in two after-tax installments of $42,500. The second of these installments cleared Campbell’s account on March 15, 2012. The next day, Campbell filed for bankruptcy, claiming some $96,000 in debts. A bankruptcy decree entered in August of 2012 discharged some $75,000 of Campbell’s debt.

Campbell failed to mention the inheritance on her bankruptcy petition. She also failed to mention that she had just made a $21,000 payment on an in-ground swimming pool and that she had recently transferred ownership of her car to her domestic partner. The partner sold Campbell’s car and then used the proceeds to buy another vehicle that cost almost $80,000.

If Campbell is found guilty, she faces up to 15 years in prison and $150,000 in fines.

While bankruptcy fraud may be common, bankruptcy fraud prosecutions are somewhat rare. During the 2013 fiscal year, the Internal Revenue Service initiated just 28 bankruptcy fraud investigations and recommended prosecutions in eight cases. That prosecution rate was down by half from just two years earlier. While prosecutions are rare, when cases are prosecuted, offenders are sent to prison about 80-percent of the time, facing average sentences of about three years in prison.

The United States Department of Justice has estimated that as many as one in ten bankruptcy filings contain some element of fraud. The United States Trustee Program made 2,120 criminal referrals in fiscal year 2012—the most recent year in which statistics were available. Of those, just 27 referrals—one percent—resulted in formal charges.

The Trustee Program conducted an audit of 1,351 bankruptcy cases in 2010 and found “material misstatements of income or expenditures” in an astounding 25-percent of cases. According to the Wall Street Journal, the Justice Department office that monitored corporate and consumer bankruptcy filings was “indefinitely suspended” in 2013 due to budget cuts.

James W. Boyd, a Traverse City, Michigan bankruptcy attorney, said the bankruptcy-fraud numbers could be overstated. He said individuals involved in personal bankruptcy often lack education in legal matters and do not have the ability to hire experienced attorneys to assist them. That leads to mistakes and misstatements that may be inadvertent.

Boyd is comfortable that the system is sorting itself out. “I think most trustees are quite aggressive when they see what they believe is an intentional fraud on the system by the debtor.”

If you find yourself needing the services of a Charlotte, North Carolina bankruptcy attorney, please call the skilled lawyers at Arnold & Smith, PLLC find additional resources here. As professionals who are experienced at handling all kinds of bankruptcy matters, our attorneys will provide you with the best advice for your particular situation.

 

 

About the Author

Bryan 1Bryan Stone is a Partner with Arnold & Smith, PLLC, where he focuses his practice on all aspects of bankruptcy, including: Chapter 7, Chapter 11, Chapter 13, home loan modifications and landlord-tenant issues.

A native of Macon, Georgia, Mr. Stone attended the University of Georgia, where he earned a BBA in Banking and Finance, and Wake Forest University School of Law, where he obtained his law degree.

Following law school, Mr. Stone relocated to Charlotte, where he currently serves as Chair of “Bravo!” – a young professionals organization associated with Opera Carolina – and founded the University of Georgia Alumni Association of Charlotte.

In his spare time, Mr. Stone enjoys perfecting his barbeque skills for the annual “Q-City BBQ Championship” and playing softball in the Mecklenburg County Bar softball league.

 

 

Sources:

http://www.nj.com/gloucester-county/index.ssf/2014/09/williamstown_woman_indicted_for_bankruptcy_fraud_after_inheriting_100k_from_nursing_home_patient.html

http://www.irs.gov/uac/Statistical-Data-Bankruptcy-Fraud

http://www.creditinfocenter.com/bankruptcy/bankruptcy-fraud-rarely-caught.shtml

 

 

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