Two Women Sentenced in Bankruptcy Fraud Schemes
“Concealed assets” leads to bankruptcy fraud
Individuals seeking bankruptcy protection should be aware that the United States Attorney’s Office will not turn a blind eye simply because concealed assets might not be valued in millions of dollars.
United States Attorney Laura E. Duffy recently announced that two San Diego women have pled guilty and were sentenced for separate bankruptcy fraud schemes.
According to court documents, in March 2008, Ms. Rockxanna Hawks filed for Chapter 7 bankruptcy protection in the United States Bankruptcy Court for the Southern District of California. Hawks listed “none” in a section of the bankruptcy forms dedicated to real property, thus creating a false impression that she owned no real property, when in fact, Hawks was the legal owner of a house in France just outside the Principality of Monaco.
According to French property records that were submitted to the sentencing court, Hawks and her then-husband purchased the house in France in 1999 for the equivalent, in francs, of $182,000. As part of her guilty plea, Hawks admitted to knowingly and fraudulently concealing the house from the Bankruptcy Court and her creditors.
Hawks was sentenced to one year of probation.
Ofelia DeAusen sentenced for concealing personal property
The second woman, Ms. Ofelia DeAusen filed for Chapter 7 bankruptcy protection in the United States Bankruptcy Court for the Southern District of California in April 2008. In the petition she filed jointly with her husband, DeAusen claimed that she owned only “$1,000” in fur and jewelry in the personal property section of the bankruptcy form when in fact,DeAusen owned a $63,232 stash of luxury items.
Among many other items, she owned: a 1.64 carat diamond ring; a 10-diamond white gold ring; a large, 16-diamond men’s ring; and one yellow gold engagement setting with one larger diamond surrounded by smaller diamonds and baguettes.
DeAusen admitted to knowingly and fraudulently concealing the jewelry and watches from the Bankruptcy Court and her creditors.
DeAusenwas sentenced to three years of probation.
United States Attorney Duffy noted that bankruptcy protection is a privilege afforded to individuals who have suffered financial setbacks, not a means to allow debtors to squirrel away their pet assets such as jewelry or vacation homes. “Every dollar concealed is one less dollar that is available to satisfy legitimate creditors,” she said.
United States Bankruptcy Trustee Tiffany L. Carroll noted, “Full and accurate disclosure of assets is a cornerstone of our nation’s bankruptcy system. We are grateful to the U.S. Attorney’s Office and the Federal Bureau of Investigation for their commitment to combating bankruptcy fraud and abuse, as demonstrated by these successful prosecutions.”