Bankruptcy Fraud

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In June of 2014, a couple from Eldorado, IL pleaded guilty to bankruptcy fraud according Stephen R. Wigginton, United States Attorney for the southern district of Illinois.

Lucy J. McGill, 62, pleaded guilty to 1 count of falsifying records in a bankruptcy case, 2 counts of making a false statement under the penalty of perjury in a bankruptcy case, and 3 counts of making false statements under oath. Gary G. McGill, 69, pleaded guilty to 2 counts of making false statements under oath and 2 counts of making false statements under the penalty of perjury in a bankruptcy case. Mr. and Mrs. McGill had filed a Chapter 7 bankruptcy case in February of 2009. Their case was filed in United States Bankruptcy Court located in Benton, IL.

Federal law states that debtors who file for bankruptcy have to disclose all of their assets. Also, debtors have to disclose particular financial transactions that they conducted before filing for bankruptcy. The reason for the disclosures is to make sure that all of their available funds can be collected to repay the creditors as much as they can.

By pleading guilty, Mr. and Mrs. McGill admitted that they lied on their Statement of Financial Affairs that was filed in Bankruptcy Court. They couple falsely stated that $22,000 in two separate accounts in Mrs. McGill’s name at the SIU Credit Union belonged to Mrs. McGill’s sister. The fact was that the $22,000 had very recently been given to Mr. McGill as a settlement payment for 2 different lawsuits.

Mr. and Mrs. McGill also admitted that they lied on their Statement of Financial affairs when they hid the fact that that they had given their son cash gifts totaling $6,800. They continued to lie about these things when they gave their sworn testimony at a bankruptcy proceeding the following April. Mrs. McGill finally admitted that she made up fake receipts showing that the credit union account belonged to her sister and then gave the receipts to the lawyer in charge of administering the bankruptcy case.

US Attorney Wigginton said that bankruptcy fraud cheats the creditors out of what they are rightfully owed. The US Attorney’s office for Southern Illinois is dedicated to prosecuting people who commit bankruptcy fraud and to protecting the integrity of the bankruptcy process.

Abuse of the bankruptcy process by hiding assets for the purpose of personal gain threatens the integrity of the entire bankruptcy system. It also undermines the public’s confidence in that system. United States Trustee for Southern Illinois, Nancy Gargula, is grateful to US attorney Wigginton and other law enforcement officers for their dedication to fight fraud and abuse in the bankruptcy system.

The US Trustee Program is a part of the Justice Department. The Justice Department protects the integrity of the bankruptcy process by overseeing the administration of cases and the litigation that enforces the bankruptcy laws.

Mr. and Mrs. McGill were to be sentenced in October 2014 at the United States District Court in Benton, IL. Each count of bankruptcy fraud is punishable by up to 5 years in prison, and/or a fine of $250,000, and no more than 3 years of supervised release. The actual sentence will be determined by the court and guided by the U.S. Sentencing Guidelines. The investigation was conducted by the FBI.

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