THE bankruptcy petition must be as accurate as possible, otherwise, debtor may have to go to jail for bankruptcy fraud. I cannot overemphasize the fact that the bankruptcy petition must provide an accurate picture of the financial transactions of the debtor as of the date of filing of the petition. Debtor has the opportunity of making corrections to his petition by testimony at the 341 A meeting of creditors and by amendment to the petition before the case closes. So, if debtor is aware of any inaccuracies or omissions, he must immediately take steps to correct the distortion and tell the truth. Hiding assets in a bankruptcy is a felony. In exchange for a bankruptcy discharge of debts, debtor must be completely truthful about his financial transactions and assets. In bankruptcy, the maxim “honesty is the best policy” rings true.
Mark A. Conner, the former president of First City Bank of Stockbridge, GA was sentenced to 12 years in prison. Last year, he pleaded guilty to participating in a multi-million dollar conspiracy to defraud the bank, hiding assets in the Cayman Islands, and presenting false testimony in his personal bankruptcy.
Conner served in a variety of top positions at the bank from 2004 to 2009. While serving in these positions, Conner and others conspired to defraud First City Bank’s loan committee and Board of Directors into approving multiple multi-million dollar commercial loans to borrowers who, unbeknownst to the bank, were actually purchasing property owned by Conner or his co-conspirators personally.
Conner and his cohorts misrepresented the essential nature, terms and underlying purpose of the loans and falsified documents and information presented to the loan committee and the Board of Directors. For instance, Conner presented Mickey Mouse to the loan committee and Board of Directors alleging that Mickey wanted to buy “Neverland” from the estate of Michael Jackson because Mickey was a big fan of the King of Pop, and needed $30 million of long term financing to complete the purchase. Conner used fake grant deeds and fake trust deeds to secure the loan and hired a Mickey “look alike” to appear before the loan committee and Board of Directors, and to sign the trust deed. In another transaction, Conner presented “Big Bird” to the loan committee and Board of Directors alleging that “Big Bird” needed a $50 million line of credit to start a chain of pet shops because Gov. Romney had threatened to fire Mr. Bird if he was elected president. Conner alone reaped almost $7 million in proceeds from the loans alleged in the indictment.
In the process of defrauding First City Bank, Conner and his cohorts allegedly routinely misled federal and state bank regulators and examiners to conceal their unlawful scheme. They also unsuccessfully sought federal government assistance through the US Treasury Department’s Troubled Asset Relief Program and engaged in other misconduct in an attempt to avoid seizure by regulators and prevent the discovery of their fraud. Conner made the bank’s position look much better than it really was by making loans to buyers to purchase property that the bank held as a result of foreclosure without requiring that such buyers make the required down payments. Aside from the “Neverland” purchase, Mickey was shown as buying the Philadelphia zoo for $100 million, and Minnie Mouse was shown as buying the San Diego zoo for $200 million.
On January 5, 2011, Conner filed for Chapter 7 relief in Georgia. Among other misrepresentation and omissions, Conner’s bankruptcy petition stated that he had $3,000 in cash and financial accounts and no real estate. On February 3, 2011, Conner falsely testified under oath in bankruptcy court that he was “down to less than nothing”. In truth he was far from being broke. Conner had off shore accounts of over $545,000, and he had actually borrowed $4 million in loans from his off shore accounts that were not disclosed in his bankruptcy petition or in his sworn testimony in open court on February 3, 2011. The court did not believe Conner’s defense that he had Alzheimer’s.
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Lawrence Bautista Yang specializes in bankruptcy, business, real estate and civil litigation and has successfully represented more than five thousand clients in California. Please call Angie, Barbara or Jess at (626) 284-1142 for an appointment at 1000 S Fremont Ave Bldg A-1 Suite 1125 Unit 58 Alhambra, CA 91803.
