Middleton Man Pleads Guilty to Making False Statements in Bankruptcy Proceeding
MADISON, WI—John W. Vaudreuil, United States Attorney for the Western District of Wisconsin, announced that Paul R. Graves, 59, Middleton, Wis., pleaded guilty yesterday before U.S. District Judge James D. Peterson to making false statements under oath in connection with a bankruptcy proceeding. Sentencing was scheduled for November 20, 2015, at 11:00 a.m.
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.
Graves did not dispute that government’s assertion that in 2009, in anticipation of filing personal bankruptcy, he 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 evidence showed that despite the execution of the purported disclaimer, Graves retained the use, control, and benefits from the property and assets he purportedly disclaimed.
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. Shortly after the filing of the bankruptcy petition, Graves testified under oath at a bankruptcy proceeding that all his schedules and statements of assets were complete and truthful. However, the evidence showed 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;
- Graves’ 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.
The charge against Paul R. Graves was the result of an investigation conducted by the U.S. Bankruptcy Trustee’s Office and the Federal Bureau of Investigation. The prosecution of the case has been handled by Assistant U.S. Attorney Robert A. Anderson.