Did you know that bankruptcy fraud is more common than you might think? In some cases, the bankruptcy trustee uncovers instances of bankruptcy fraud, while in others, creditors and other interested parties report it. The Internal Revenue Service (IRS) can also uncover bankruptcy fraud in some cases.
Interestingly, bankruptcy fraud and tax fraud often occur together. As a result, both the IRS and the U.S. Department of Justice are known to investigate and prosecute cases of bankruptcy and tax fraud vigorously.
What Are Your Options To Avoid Bankruptcy Fraud?
Bankruptcy can be a confusing and overwhelming process, and many people are not aware of all the different options available to them. For instance, while Chapter 7 bankruptcy may seem like the most affordable option, it's important to note that committing bankruptcy fraud is a serious offense that can have severe consequences.
To help you make an informed decision, we've created a debt relief options calculator that allows you to compare different options. The calculator includes the following options: 1) Chapter 7 bankruptcy, including qualification and cost, 2) Chapter 13 payment plan, 3) Debt Management, 4) Debt Settlement, and 5) Debt Payoff Planning. By using this free calculator, you can compare all of your options holistically and choose the best one for your situation.
Owner of West Virginia Mall Convicted of Tax and Bankruptcy Fraud
In February 2020, Dietrich S. Fransler, the managing member of Pine Oak Properties, LLC, was sentenced to 18 months in prison for tax and bankruptcy fraud. He owned and operated the Middletown Mall in Fairmont, WV. Fransler pleaded guilty to two charges: concealing bankruptcy assets and willful failure to pay over tax.
Fransler admitted to collecting rent from tenants and using some of the money to pay expenses unrelated to the property. He also concealed the money from the bankruptcy estate and creditors. Additionally, Fransler withheld taxes from employees’ paychecks but did not pay them to the IRS. He also failed to pay his personal income taxes for four years, resulting in a total loss of over $880,000 to the IRS.
The court sentenced Fransler to serve 18 months in prison and ordered him to pay $225,000 in restitution to the bankruptcy trustee and $880,446.82 to the IRS.
Denver Couple Sentenced to Years in Prison for Bankruptcy Fraud and Tax Evasion
In July 2017, Daryl F. Yurek and Wendy M. Yurek were found guilty of tax evasion and bankruptcy fraud by a Denver jury after a two-week trial. The sentences handed down included 50 months in prison and three years of supervised release for Mr. Yurek, a forfeiture money judgment against him for $132,991.61, and 27 months in prison and three years of supervised release for Ms. Yurek. The couple was also ordered to pay $1,614,536.38 in restitution to the IRS.
The indictment and evidence presented in court showed that the Yureks attempted to settle their IRS debt by filing Chapter 7 and claiming that they lacked the assets and income to pay their taxes. However, during the same period, their companies paid millions of dollars in personal expenses for the couple, including buying homes, paying rent for vacation homes, and purchasing memberships to an exclusive country club. The couple also submitted false statements to the IRS and committed numerous acts of evasion.
This case highlights the serious consequences of tax evasion and bankruptcy fraud. Those who attempt to evade taxes or conceal assets during bankruptcy proceedings can face significant fines, imprisonment, and other penalties. It is essential to be honest and transparent when dealing with the IRS and other government agencies to avoid legal trouble and financial ruin.
Construction Company Owner in New Jersey Sentenced to Prison for Bankruptcy Fraud and Tax Evasion
Patrick Franconeri, the owner of a construction company, has been sentenced to 18 months in prison for committing bankruptcy fraud and tax evasion. Franconeri pleaded guilty to one count of concealment of assets in bankruptcy and one count of tax evasion. The Justice Department reported that Franconeri did not file tax returns or pay taxes owed to the IRS. Instead, he took measures to hide his income, including cashing checks at cash-checking places.
Franconeri also filed for Chapter 7 bankruptcy, where he allegedly concealed assets from the bankruptcy estate and failed to disclose his ownership of the construction companies. Furthermore, he did not reveal the income from the construction companies for two years before filing for bankruptcy.
Aside from serving 18 months in prison, Franconeri has been ordered to pay $716,560 restitution for the bankruptcy fraud and $558,349 restitution to the IRS.
Michigan Insurance Salesman Faces Severe Sentence if Convicted
A Michigan insurance salesman, Donald Stanley LaVinge, has been indicted by a federal grand jury in Detroit. The charges against him include making false statements to the bankruptcy court and filing false tax returns. According to the indictment, LaVinge allegedly failed to report his income on his tax returns for six years and told the IRS that the commissions he received were not income.
When LaVinge filed for bankruptcy relief in 2018, he didn't list the IRS as a creditor and underestimated his income in the bankruptcy case. The US Department of Justice also claims that he made false statements.
It's important to note that Mr. LaVinge hasn't been found guilty of any of these charges yet. However, if convicted, he could face up to three years in prison for each false tax return charge and up to five years for each bankruptcy fraud charge. Additionally, he may be sentenced to several years of supervised release and ordered to pay restitution and monetary penalties.
Get Help Filing Bankruptcy or Resolving Debt Problems
Did you know that bankruptcy fraud is a serious crime that could result in years of imprisonment? It occurs when individuals knowingly conceal their assets or income during the bankruptcy process.
However, the bankruptcy system is designed to help people who are struggling with debt. It provides them with an opportunity to start fresh by eliminating debts they cannot afford to pay. This allows them to recover from a financial crisis and move forward with their lives.
If you are dealing with debt problems, we are here to help. We offer a variety of debt-relief options, including bankruptcy, debt settlement, and debt payoff planning. Our team is dedicated to finding an affordable solution that works for you.
Contact us today to speak with one of our team members. Our services are mostly available free of charge, and it won't cost you anything to talk with us.