Middleton Man Sentenced for Concealing Assets in Bankruptcy Proceeding
MADISON, WI—John W. Vaudreuil, United States Attorney for the Western District of Wisconsin, announced that Paul R. Graves, 60, Middleton, Wis., was sentenced today by U.S. District Judge James D. Peterson to five years’ probation with six months home confinement for making false statements under oath in connection with a bankruptcy proceeding. He was also ordered to pay $186,597.99 restitution to creditors in the bankruptcy. Paul Graves pleaded guilty to this charge on August 24, 2015.
Graves and his wife owned and operated Mauston Home Center, LLC, a hardware business in Mauston, Wis. In connection with the operation of that business, they personally owed in excess of $500,000 in debts to creditors of the business.
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 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, 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.
In sentencing Graves, Judge Peterson noted that he engaged in a calculated scheme to evade the debts that he owed to others and exploited the use of assets which he supposedly disclaimed in his inheritance for his own gain.
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.