“Bankruptcy Fraud, Money Laundering & Hidden Assets” outlines how a Chapter 7 debtor hid his Porsche and Rolls Royce and other assets. That debtor eventually pleaded guilty to violating 18 U.S.C. §152 (Concealment of assets; false oaths and claims; bribery) and one count of 18 U.S.C §157 (Bankruptcy fraud). “An Asset Search For Automobiles” similarly highlights how a Chapter 7 debtor concealed his $113,000 Porsche 911, by fraudulently transferring it out of state and registering it in the name of his brother.
A September 29, 2009 adversary complaint filed against 84-year-old Chapter 7 bankruptcy debtor Michael R. Mastro too claims that a valuable automobile was fraudulently transferred. As part of this suspected fraudulent transfer, Mr. Mastro’s wife Linda, could have assigned Mr. Mastro’s $400,000 Rolls Royce to “LCY LLC Series Automobiles“. The “Gift Statement” she reportedly executed, states that the Rolls was transferred without any exchange of consideration:
After receiving the Rolls from Linda Mastro, LCY LLC Series Automobiles through the person of Mr. Mastro, is believed to have re-gifted the Rolls right back to Mr. Mastro:
The Delaware company LCY LLC, (which organized LCY LLC Series Automobiles under an October 10, 2008 operating agreement), apparently also had a role in the alleged transfer of Mr. Mastro’s Rolls. LCY LLC is additionally believed to have participated in the suspected fraudulent transfer of Mr. Mastro’s expensive home and may have had a role in his alleged fraudulent transfer of the following jewelry:
- One platinum ring with 27.80 carat pear shape diamond;
- One 14 karat white gold ring with 15.93 carat round diamond;
- One 18 karat yellow gold diamond solitaire ring with a 14.17 carat round diamond;
- One 18 karat yellow gold ring with 9.68 carat diamond;
- Two 2.5 carat earrings;
- One ring with a 10.25 carat diamond; and
- One 18 karat yellow gold ring with two rows of seven diamonds, two rows of five diamonds and two rows of three diamonds.
According to the above-mentioned September 29th adversary complaint, Mr. Mastro’s suspected phony transfers involved the use of offshore asset protection tools. These asset protection tools related to Mr. Mastro’s case are alleged to have been provided by Vigal & Simon, Inc. and / or Mary Simon— who is a practicing attorney. The adversary complaint even indicates that a foreign Belizean trust and a company in Monaco may have played a part in some of Mr. Mastro’s suspected fraudulent transfers.
As “Badges Of Fraud In Debt Collection, Divorce & Bankruptcy” shows, fraudulently transferred bankruptcy estate assets might be recovered by demonstrating the presence of “the badges of fraud”. The badges of fraud are also discussed by cases like Salomon v. Kaiser (In re Kaiser), 722 F.2d 1574 (2d Cir. 1983).
Copyright 2009-2011 Fred L. Abrams