Examples of Bankruptcy Fraud Investigations - Fiscal Year 2013
The following examples of bankruptcy fraud investigations are written from public record documents on file in the court records in the judicial district in which the cases were prosecuted.
Texas Man Sentenced for Bankruptcy Fraud and Tax Crimes
On July 17, 2013, in Fort Worth, Texas, Larry Lake was sentenced to 168 months in prison and ordered to pay $550,000 in fines and approximately $25 million in taxes, interest and penalties. Lake was convicted at trial in February 2013 of concealment of assets (bankruptcy fraud) and tax evasion. According to evidence presented at Lake’s trial, the day before he filed for bankruptcy in November 2004, he knowingly and fraudulently transferred and concealed more than $3 million held in an on-line trading account and a bank account. He transferred the funds through a series of bank deposits, wire transfers and cashier’s checks, as well as used a shell company to help hide assets. From August 2006 through November 2009, Lake and his spouse agreed to structure more than 1,100 currency deposits, into at least 13 different bank accounts. These accounts were spread among several financial institutions, and the total amount structured during this period was in excess of $9.3 million. Lake and his spouse created at least two shell companies, which he used to open some of the 13 bank accounts used in the structuring scheme. In addition, Lake under-reported income on his and his spouse’s joint tax returns for the tax years 2006 through 2008.
Iowa Man Sentenced for Bankruptcy Fraud and Interfering with Internal Revenue Laws
On July 9, 2013, in Cedar Rapids, Iowa, Michael Recker, of Arlington, Iowa, was sentenced to 46 months in prison, three years of supervised release and ordered to pay $26,267 in restitution. Recker pleaded guilty in March 2013 to conspiring to fabricate false grain elevator scale tickets, bankruptcy fraud and impeding Internal Revenue laws. At the plea hearing and in his plea agreement, Recker admitted that in 2008 and 2009, he bribed an employee of a northern Iowa grain elevator to create false and fictitious grain elevator scale tickets. The employee fabricated eight false grain elevator tickets, in exchange accepting thousands of dollars in bribes from Recker. The grain elevator paid Recker more than $20,000 based on the false tickets. Recker also sold a combine at auction for approximately $50,000 prior to filing for bankruptcy protection in the United States Bankruptcy Court. In bankruptcy documents, Recker did not disclose the proceeds still owed to him by the auction company and when questioned about the proceeds, Recker lied to the court. Finally, Recker admitted that he tried to obstruct or impede the administration of the Internal Revenue laws by trying to hide and conceal his taxable income by, among other ways, having the checks from the grain elevator fraud made payable to his then-girlfriend and passing them, and the bribes, through a bank account established in her name.
Maryland Man Sentenced for Bankruptcy Fraud and Filing False Tax Returns
On June 27, 2013, in Baltimore, Md., Ricardo O. Curry II, of Randallstown, Md., was sentenced to 87 months in prison and three years of supervised release for assisting in the filing of false tax returns, bankruptcy fraud, falsifying bankruptcy records and false testimony under oath at a bankruptcy proceeding. Curry was also ordered to pay restitution of $1,114,988 to creditors in his bankruptcy case and $118,182 to the IRS. Curry was convicted by a federal jury on March 20, 2013. According to court documents, Curry worked for a North Carolina real estate corporation that oversaw the sale of property in North Carolina, including a development which contained more than 2000 lots. Curry recruited investors to purchase lots in the development and he received referral fees based on these sales. From 2005 through 2007, Curry earned referral fees totaling $415,201. Curry failed to report these referral fees on his 2005, 2006, and 2007 tax returns. On March 12, 2009, Curry filed for Chapter 13 bankruptcy in the United States Bankruptcy Court for the District of Maryland. Curry failed to disclose the referral fees and an ownership interest in a home worth approximately $325,000 on either the Statement of Financial Affairs he filed with the bankruptcy court, an amended statement or in testimony before creditors. Ultimately, Curry never provided documents to the trustee overseeing his bankruptcy case regarding either the referral fee income or the home, and as a result, Curry’s attempt to discharge his debts through bankruptcy was denied.
New Jersey Dentist Sentenced for Tax Evasion and Bankruptcy Fraud
On June 12, 2013, in Camden, N.J., Stephen A. Beukas, of Mahwah, N.J., was sentenced to 21 months in prison, two years of supervised release, fined $50,000 and ordered to pay $69,883 in restitution to the bankruptcy trustee. Beukas pleaded guilty in June 2012 to income tax evasion and bankruptcy fraud. According to court documents and statements made in court, from early 2005 through 2008, Beukas was a practicing dentist and the sole owner of several dental practices located in New Jersey. For the years 2005 through 2008, Beukas failed to provide the IRS with accurate information on the $2.6 million income he received as owner of the three practices. On September 12, 2009, Beukas filed a tax return in which he falsely stated that his total income for the calendar year 2006 was $632,945, and that the tax owed was $187,905. Beukas failed to file timely tax returns in 2005, 2007, and 2008. His failure to disclose correct information to the IRS resulted in a tax loss of $800,309. In 2008, when Beukas filed for Chapter 11 bankruptcy, he also failed to disclose almost $1.3 million in income he received as the sole owner of one of the dental practices.
California Woman Sentenced for Federal Crimes
On February 27, 2013, in Los Angeles, Calif., Irina Topilina was sentenced to 36 months in prison and ordered to vacate her residence, pursuant to a forfeiture agreement. Restitution will be determined at a later date. Topilina pleaded guilty in February 2012 to one count each of tax evasion, bankruptcy fraud, and aggravated identity theft. Beginning in as early as 1999, Topilina obtained property and assets belonging to an elderly woman who was suffering from dementia and used the identity of foreign nationals to conceal her assets. She placed her resident in the name of a foreign national and used this person's identity to obtain loans secured by the residence, pay expenses for the residence, and ultimately file a homeowner's claim for damages to the residence. In October 2005, she and her husband, Eugene Pinchuk, filed a bankruptcy petition, claiming less than $12,000 in assets and $142,000 in liabilities. The petition failed to disclose several assets, including the Topilina's residence, a condominium, annuities and a Volvo that the she had acquired through the use of nominees. Topilina also failed to report approximately $130,000 in funds that the she used for her benefit from the cashed annuities and additional payments of approximately $43,000 she received for notary services and referral fees which were deposited into a nominee account.