Amana Husband and Wife Sentenced to Federal Prison for Bankruptcy Fraud

Today, a federal judge in Florida sentenced a couple from Amana, Iowa, to prison because they defrauded bankruptcy creditors out of more than $350,000 in property. Gerald Schuerer was sentenced to over four years’ imprisonment, and his wife Fay Schuerer was sentenced to over two years’ imprisonment.

Gerald Schuerer, age 60, and his wife Fay Schuerer, age 58, both from Amana, received their sentences after a jury verdict on November 8, 2010, finding them both guilty of bankruptcy fraud and mail fraud.

The evidence showed the Schuerers made sham sales of assets to relatives with an understanding they would reacquire the assets from their relatives after going through bankruptcy. These assets included a vehicle, boats, household property, jewelry, stocks, and other investments worth approximately $380,000. The Schuerers then professed to move to Florida where bankruptcy exemptions are more liberal than in Iowa, filed for bankruptcy protection, moved back to Iowa, and got the property back from their relatives. The Schuerers used the sham transactions to hide their assets.

The Schuerers were charged and tried in the Northern District of Florida where their bankruptcy was filed. They were sentenced in Pensacola by United States District Court Judge M. Casey Rodgers. Gerald Schuerer was sentenced to 50 months’ imprisonment, and Fay Schuerer was sentenced to 30 months’ imprisonment. The court imposed a fine of $25,000 and a special assessment of $200 on each defendant. Both must also serve a two-year term of supervised release after their prison term. There is no parole in the federal system. The court also ordered the defendants to pay restitution to the United States Bankruptcy trustee, for distribution to creditors, in the amount of $394,984.

The Schuerers were released on the bond previously set and are to surrender to the Bureau of Prisons on March 21, 2011.

The case was prosecuted by Assistant United States Attorney C.J. Williams. The case was investigated by the Federal Bureau of Investigation with assistance from the Offices of the United States Trustee in the Northern Districts of Iowa and Florida. The investigation and prosecution were initiated by the Bankruptcy Fraud Task Force of the Northern District of Iowa.

Court file information is available at https://ecf.flnd.uscourts.gov/cgi-bin/login.pl. The case file number is 3:10cr74MCR.