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Man charged with fraud in consumer bankruptcy filing

On Behalf of | Mar 26, 2015 | Chapter 7 |

Bankruptcy protection is a powerful financial tool, and one that can be a lifesaver for individuals and families who are drowning in debt. However, in order to achieve the benefits of a consumer bankruptcy, there are a multitude of rules that must be closely followed. For those in Maryland and beyond who fail to adhere to these rules, the result can be even worse than the financial strain that led them to file in the first place. Such is the case for one man who is now facing federal fraud charges after authorities say he failed to properly disclose all of his assets during his personal bankruptcy.

The case centers on an inheritance that the man received, valued at more than $800,000. The inheritance included a one-quarter interest in a private Canadian island and a home on that property, a second home and a lifetime tenancy in yet another home. In addition, two bank accounts worth more than $200,000 were included within the inheritance. The man did disclaim the inheritance within the bankruptcy paperwork, but prosecutors claim that he made efforts to keep those assets outside of the bankruptcy process.

The indictment claims that the man and his wife acted with the intention of concealing assets from the bankruptcy court, and to defraud their creditors. The couple owned a hardware business and listed $500,000 of personal debt to creditors of that business. The man is now charged with bankruptcy fraud, concealing assets, making false statements under oath and money-laundering. Should he be convicted on all counts, he would face up to 30 years in federal prison.

While this case is an extreme example of the risk of improperly completing a consumer bankruptcy, it does serve as an illustration of the importance of ensuring that the details of one’s filing are in order. In Maryland or elsewhere, when assets are improperly disclosed or excluded from the bankruptcy process, negative repercussions can occur. In some cases, the errors or omissions will lead to a delay in completing the bankruptcy; other cases could cause the entire case to be thrown out by the court. In the worst-case scenario, criminal charges could be the end result, such as within the example provided here.

Source:, “Middleton man accused of hiding assets during bankruptcy”, March 10, 2015

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