Bankruptcy is a federal process intended to help individuals find relief
from debts that they can never repay – it is NOT meant to be abused
for personal gain. One California businessman recently found this out
the hard way after being busted by the FBI for bankruptcy fraud.
Gold River businessman Steven K. Zinnel and his wife divorced in 1999.
The divorce was contested and increased in contention as it progressed.
In 2001, Mr. Zinnel sent an email to his wife and told her that he planned
to file for bankruptcy and that she would not get any money from him,
not even child support for their two teenage children.
Zinnel officially filed for bankruptcy in 2005; however, during the years
leading up to this point, he proceeded to hide millions of dollars in
assets by setting up a trust (with help from his lawyer and alleged lover)
to launder money from an investment in an electrical firm; hiding money
in shell companies; and putting money in accounts with other people's
names. His intention was to disguise his true income and assets so that
he would be required to pay less in child support.
Mr. Zinnel was not truly eligible for bankruptcy, but because he had hidden
most of his money, he successfully pulled the wool over the eyes of bankruptcy
court – but not the Feds. Zinnel took a stab at his ex wife by asking
the FBI to investigate her for allegedly trying to get illegal access
to his private health insurance information, but his plan severely backfired.
When the Feds spoke with Michelle (Zinel's ex wife) and heard her side
of the story, they became suspicions of Zinel's bankruptcy filing.
The president of the electrical company that was helping Zinel hide his
assets agreed to cooperate with the FBI and set up a meeting with Zidel,
his lawyer-lover Derian Eidson, and two undercover federal agents. Zinel
and Eidson were quickly indicted.
The Final Verdict
Found to be worth several million dollars – far from being eligible
for bankruptcy – Zinel was convicted of 15 counts of bankruptcy
fraud and money laundering. He was ordered to forfeit $2.8 million of
his assets and to pay $500,000 in fines. He was also sentenced to serve
17 years in prison, having already been incarcerated since July.
Read more about the story through the
New York Times or the
MAKE SURE YOU'RE ELIGIBLE BEFORE FILING BANKRUPTCY
Are you struggling with debt? Make sure that you are eligible for bankruptcy
before you file! While you may not fake bankruptcy on purpose, you should
still prepare for
the means test and be sure that you qualify for Chapter 7 or Chapter 13 in order to avoid
any problems with the federal government.
Consult an Irvine bankruptcy lawyer from Peter Rasla & Associates,
P.L.C. today by calling (949) 390-9994!