According to page nine of the 2005 U.S. Trustee’s Annual Report: “Every year since 1996, more than one million individuals and businesses have filed bankruptcy, making the bankruptcy caseload the largest in the federal court system”. Since it detects and combats bankruptcy fraud, the U.S. Trustee Program is a critical part of the bankruptcy court system. According to its June 2007 Report to Congress, the U.S. Trustee Program referred 925 criminal cases for prosecution in 2006. This was a 24 percent increase from the 744 criminal referrals made by the Trustee Program in 2005.
One kind of fraud the Trustee Program is concerned with occurred when husband and wife Terry and Susan Brunning hid assets and laundered money the subject of their 2002 Chapter 7 bankruptcy case. As their June 3, 2003 indictment explains, the Brunnings were suppose to disclose all their assets at the time of their Chapter 7 bankruptcy so that the bankruptcy court trustee could then liquidate the same for the benefit of creditors. The Brunnings however instead hid over $1 million dollars in accounts at: San Diego National Bank; Abbey National Treasury Limited in the Isle of Man, Great Britain; and at Lloyds Bank, PLC in London. The Brunnings had also concealed a $155,000 promissory note; a 1981 Rolls Royce; a 1990 Jaguar; and their 57-foot sailing yacht. According to their indictment, the Brunnings had even concocted the fictitious creditor “Donna Kerns”, in an effort to falsely claim the monies from the bankruptcy trustee’s sale of their $155,000 promissory note.
On October 23, 2006, Terry Bruninng was finally sentenced to thirty-three months in prison plus three years supervised release after pleading guilty to two counts of 18 U.S.C. § 152 (Concealment of assets; false oaths and claims; bribery), and one count of 18 U.S.C §157 (Bankruptcy fraud). At that same time, Susan Brunning similarly pleaded guilty to one count of 18 U.S.C § 152, and was sentenced to a prison term of six months plus three years of supervised release.
Copyright 2007 Fred L. Abrams