Middleton Man Charged with Bankruptcy Fraud
MADISON, WI—John W. Vaudreuil, United States Attorney for the Western District of Wisconsin, announced today that a federal grand jury returned a five-count indictment charging Paul R. Graves, 59, Middleton, Wis., with bankruptcy fraud. The indictment was returned on March 4 and was unsealed today. He will make an initial appearance in U.S. District Court in Madison on April 2, 2015, at 10:00 a.m.
The indictment alleges that from February 2009 through August 2012, Graves and his wife devised a scheme to defraud creditors of their estate in bankruptcy. According to the indictment, Graves and his wife owned and operated Mauston Home Center, LLC, a hardware business in Mauston, Wis., for which they personally owed in excess of $500,000 in debts to creditors of the business.
The indictment alleges that in 2009, Graves, in anticipation of filing personal bankruptcy, executed a fraudulent disclaimer of a substantial inheritance, valued at approximately $800,000, to which he was entitled as a result of the death of his mother in February 2009. The indictment alleges that despite the execution of the purported disclaimer, he retained the use, control, and benefits from the property and assets he purportedly disclaimed.
The indictment alleges that on May 12, 2010, Graves filed a Chapter 7 petition for personal bankruptcy in the U.S. Bankruptcy Court for the Western District of Wisconsin, and failed to fully disclose assets and concealed assets from creditors, the bankruptcy trustee and bankruptcy court. Specifically, Graves knowingly failed to disclose and concealed the following:
- Paul Graves’ use and control of the inherited assets fraudulently disclaimed in 2009;
- Paul Graves’ ownership of a one-quarter interest in a 9-acre island in Canada with a two bedroom cabin that had been used by the Graves for recreation since 1995;
- his wife’s joint ownership interest in a home in Jackson County, Wis., as well as her joint ownership of two bank accounts in Black River Falls, Wis., worth over approximately $200,000;
- Graves’ and his wife’s ownership of a rent-free lifetime tenancy of a home in Middleton, Wis., which had originally been an inherited asset purportedly disclaimed by Paul Graves; and
- Graves’ ownership of a 2009 Mercedes ML350 SUV which was purchased by him with funds from the purportedly disclaimed inheritance.
If convicted, Graves faces a maximum penalty of five years in federal prison for the charge of bankruptcy fraud, five years for fraudulently concealing assets from the bankruptcy court, five years on each of two counts of making false statements under oath, and 10 years on a money laundering charge.
The charges against Graves are the result of an investigation by the Federal Bureau of Investigation. The prosecution of this matter is being handled by Assistant U.S. Attorney Robert A. Anderson.
You are advised that a charge is merely an accusation and that a defendant is presumed innocent until and unless proven guilty.