Eldorado Couple Sentenced for Bankruptcy Fraud
Yesterday, a couple from Eldorado, Illinois, was sentenced on their convictions for bankruptcy fraud, the United States Attorney for the Southern District of Illinois, Stephen R. Wigginton, announced. Lucy J. McGill, 62, and Gary G. McGill, 69, were each sentenced to two years of probation, with 4 months of home confinement on electronic monitoring, 20 hours of public service, and ordered to pay fines of $1,000 each. The sentencing hearings were conducted by U.S. District Judge J. Phil Gilbert.
The sentencings follow the McGills’ guilty pleas in federal court in Benton, Illinois on June 5, 2014. Lucy McGill pled guilty to two counts of making false statements under penalty of perjury in a bankruptcy case, three counts of making false statements under oath in a bankruptcy case, and one count of falsifying records in a bankruptcy case. Gary McGill pleaded guilty to two counts of making false statements under penalty of perjury in a bankruptcy case and two counts of making false statements under oath in a bankruptcy case.
The McGills filed a chapter 7 bankruptcy case on February 25, 2009, in the United States Bankruptcy Court in Benton, Illinois.
Federal law requires that debtors who file for bankruptcy must disclose all of their assets. In addition, debtors are required to disclose certain financial transactions that they conducted prior to filing bankruptcy. The purpose of these disclosures is to ensure that all available funds can collected to pay the creditors as much as possible on the amounts they are owed.
In their guilty pleas, Lucy and Gary McGill both admitted that they lied on a Statement of Financial Affairs that they filed with the Bankruptcy Court. The McGills falsely stated that $22,000 in two accounts in Lucy McGill’s name at SIU Credit Union belonged to Lucy McGill’s sister. In fact, that $22,000 had recently been paid to Gary McGill in settlement of two lawsuits. The McGills further admitted that they again lied on their Statement of Financial Affairs when they concealed the fact that they had recently given their son cash gifts totaling $6,800. The McGills continued to lie about these topics when they gave sworn testimony at a bankruptcy proceeding on April 3, 2009. Finally, Lucy McGill also admitted that she created fake receipts, purportedly showing that the cash in the SIU Credit Union accounts belonged to her sister, and then provided those receipts to the attorney administering her bankruptcy case.
In commenting on yesterday’s sentences, United States Attorney Wigginton said, “The United States Attorney’s Office for Southern Illinois remains committed to prosecuting individuals who commit bankruptcy fraud. This type of crime cheats creditors and represents a fraud on our federal courts. Bankruptcy should be a haven for those in need of its protections, not a place where people try to hide their assets from creditors”
Nancy J. Gargula, United States Trustee for Southern Illinois, Central Illinois and Indiana (Region 10) stated, “Today’s proceedings make clear that this type of behavior will not be tolerated.” The U.S. Trustee Program is the component of the Justice Department that protects the integrity of the bankruptcy system by overseeing case administration and litigating to enforce the bankruptcy laws. Region 10 is headquartered in Indianapolis, with additional offices in South Bend, Ind., and Peoria, Ill. The charges resulted from a referral by the U.S. Trustee for Indiana and Central and Southern Illinois (Region 10) to the Southern District of Illinois Bankruptcy Fraud Working Group and U.S. Attorney.
The investigation was conducted by the Federal Bureau of Investigation. The case was prosecuted by Assistant United States Attorneys Scott A. Verseman.