Raleigh Realtor Sentenced for Bankruptcy Fraud
|U.S. Attorney’s Office November 05, 2012|
NEW BERN—United States Attorney Thomas G. Walker announced Gary Kevin Coats was sentenced in federal court today by United States District Judge Louise W. Flanagan. Some of the terms of judgement are imprisonment for 12 months and one day and three years of supervised release for bankruptcy fraud, in violation of Title 18, United States Code, Section 157(3). She also ordered that Coats could not act as a real estate broker while on supervised release.
According to the criminal information filed on December 20, 2011, Coats filed a voluntary petition for a Chapter 7 bankruptcy on February 10, 2009. A Chapter 7 Trustee was appointed and Coats, then a licensed realtor and operator of Featured Properties LLC, was notified by an Order and Notice to Debtor that all property belonged to the Chapter 7 estate. This property included a Raleigh condominium that Coats had declared he intended to surrender. In March, 2009, Coats was contacted by a realtor who represented clients wishing to purchase the condo. In April, 2009, Coats, using the buyers’ assumed name and forged signatures and initials, submitted an offer to the trustee to purchase the condo. Over the next couple of weeks, Coats, using the assumed name, through e-mails, encouraged the trustee to take the buyers’ offer. In May, 2009, the trustee filed a motion to approve the private sale with the United States Bankruptcy Court. Unbeknownst to the trustee, the buyers’ realtor and Coats had negotiated a side agreement that the buyers would pay additional funds to Coats outside of closing that would not go to the trustee. On June 5, 2009, the trustee contacted the closing attorney and learned of the side agreement. On June 10, 2009, Coats, posing as an attorney, e-mailed the realtor regarding a cease and desist letter sent to Coats under his assumed name concerning the side agreement. Later that month, the attorney whose name had been used by Coats contacted the trustee notifying the trustee that he did not e-mail the realtor nor did he know Coats.
Investigation of this case was conducted by the Federal Bureau of Investigation. Assistant United States Attorney S. Katherine Burnette prosecuted the case.