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St. Louis Woman Charged With Concealing Assets In Chapter 7 Bankruptcy

This week we covered an important topic that all people considering bankruptcy should know about: What Happens When You Don’t List Everything in Your Bankruptcy? The answer, as you might guess, is that you can be charged with bankruptcy fraud and may face severe consequences including prison time.

Just last month, the American Chronicle reported on the bankruptcy fraud case of 45-year-old Julie Lynn Wagman, a St. Louis, Missouri, woman who filed for Chapter 7 Bankruptcy in August of 2005. When listing her assets as part of her bankruptcy petition, the MO woman tried to hide several assets from the courts, totaling over $50,000. According to United States District Judge Catherine D. Perry, the woman failed to list several expensive pieces of jewelry, including a Rolex watch, a tennis bracelet, and her wedding ring. While she did not list her expensive items, she did list several items under $300.

During her divorce proceedings two years later, the property was discovered and Wagman admitted that she had purposefully omitted her expensive items during the bankruptcy proceedings. She later pleaded guilty to making false statements during a bankruptcy proceeding. She has been ordered to serve five months in prison and five months of house arrest. In addition, she must pay $54,400 in restitution for her bankruptcy fraud.

The lesson here is simple: as with all things, honesty is the best policy – and in a bankruptcy procedure, anything less than honesty could end in prison.

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