San Jose Bankruptcy Attorney comments on recent indictment in Vallejo bankruptcy fraud case.
San Jose Bankruptcy Attorney comments on recent indictment in Vallejo bankruptcy fraud case.
Recently the U.S. Attorney for the Northern District of California indicted a Vallejo woman for committing mortgage and bankruptcy fraud. According to the indictment, Myra Holmes convinced her father to illegally transfer his interest in her home to her. Her father had previously filed for Chapter 11 bankruptcy protection, and the transfer was completed without the consent of the bankruptcy trustee or the permission of the bankruptcy court.
After the transfer was completed, the indictment alleges that Ms. Holmes refinanced the property and removed approximately $130,000 in equity in the home, which she used to fund personal expenses and settle personal debts, including accounts at Nieman Marcus, Lord & Taylor, Macy’s and Spiegel. She has not repaid any of the illegally-withdrawn funds to the bankruptcy estate.
The maximum penalty that Ms. Holmes is facing for concealment of assets is five years in prison, a $250,000 fine and restitution. The penalty for bank fraud is 30 years imprisonment, a $1,000,000 fine and restitution.
Bankruptcy courts do not take kindly to actions designed to hide assets from bankruptcy proceedings. If you have a prize possession that will be lost in bankruptcy, don’t try to sell it at a discount to a friend or relative or give it to them, with the hope of getting it back after your bankruptcy discharge is finalized.
In a bankruptcy filing, you are required to list everything that you have sold, transferred or given away for the past two years. And none of those items can have changed hands for less than market value. It is wise to work closely with your bankruptcy attorney to be extremely thorough during this phase of the bankruptcy process. Mistakes, or deceptions, made here can bring significant financial and legal repercussions down the road.
Vallejo woman charged with mortgage and bankruptcy fraud, USDOJ, October 7, 2009
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