Houston Lawyer Charged with Bankruptcy Fraud
|U.S. Attorney’s Office February 19, 2014|
HOUSTON—Calvin C. Braun, a local Houston attorney who handles bankruptcy cases, has been arrested on charges of bankruptcy fraud and filing false declarations in bankruptcy court, announced United States Attorney Kenneth Magidson.
Braun was charged in four-count indictment returned February 12, 2014. He was taken into custody yesterday and made an initial appearance before U.S. Magistrate Judge George C. Hanks. He was permitted release upon posting bond and was further ordered to not to take on any new bankruptcy cases.
The indictment alleges Braun, 47, filed a bankruptcy case under Chapter 7 on behalf of a woman on May 31, 2010, who agreed to pay Braun $2,500 to represent her. She had allegedly been referred to Braun by her ex-husband who had previously utilized the Orlando & Braun law firm to represent him on matters related to various companies he owned. On December 23, 2010, the man had retained Braun to file a Chapter 11 bankruptcy case in his behalf, according to allegations. The indictment further alleges the woman had been listed as a creditor in the documents filed in her ex-husband’s case.
Braun allegedly falsely filed a disclosure of compensation of attorney on behalf of the woman in bankruptcy court in which he certified he had received his full fee of $2,500 prior to filing the disclosure statement on July 2, 2010. However, the indictment alleges he knew she had not paid the full amount owed when he filed the statement, and he continued to collect money from her in the case.
Later, Braun also allegedly filed an application to employ with an attached affidavit seeking the bankruptcy court’s approval to represent the man in his Chapter 11 case. In that affidavit, Braun allegedly stated he had no conflict of interest in representing him nor represented any of his creditors. The woman filed an objection to that application. Braun later admitted in an amended affidavit that he did represent the woman in her Chapter 7 case, but again reiterated he did not represent any creditors of the male, according to the allegations. However, in truth and in fact according to the indictment, he was counsel of record for her and that she was listed as a creditor in the man’s Chapter 11 bankruptcy case.
Furthermore, on November 30, 2010, Braun allegedly charged the woman an additional fee of $300 and promised to file a motion to re-open her bankruptcy case that had been closed due to Braun’s failure to file a critical document. Later, on December 28, 2010, the woman paid an additional $1,258.91 for the balance owed Braun to re-open the case. He took the money in both instances but never filed the motion to re-open the case, even though he was still her counsel of record, according to the allegations.
If convicted of the charges, Braun faces up to five years in federal prison and a possible $250,000 fine.
FBI investigated with the assistance of the United States Trustee’s Office. Assistant United States Attorney Quincy L. Ollison is prosecuting.
An indictment is a formal accusation of criminal conduct, not evidence. A defendant is presumed innocent unless convicted through due process of law.