Gresham Man Pleads Guilty to Bankruptcy Fraud in Federal Court; Victims Include Roofers Local 49 Welfare Fund Defendant Concealed Assets Including Cash, Silver, and Gold Bullion

PORTLAND, OR—Donovan Lindhorst, 69, of Gresham, Oregon, pled guilty to two counts of bankruptcy fraud on Monday, August 23, 2010 before U.S. District Court Judge Michael W. Mosman. Lindhorst was placed in involuntary bankruptcy on October 11, 2007 by the Roofers Local 49 Welfare Fund because he failed to make appropriate contributions to various employee benefit plans. By entering the plea of guilty, the defendant admitted he had made materially false representations to and concealed assets from the bankruptcy trustee, Amy Mitchell, during the bankruptcy proceedings, including transfers of money to his wife of approximately $182,000, a 1928 Ford Roadster pick-up, cash, gold, coins, silver, and an interest in real property located in Battle Ground, Washington. Defendant also failed to disclose and concealed transfers to his son in the amount of $190,000. During the pendency of the bankruptcy proceeding, the bankruptcy trustee executed a court-approved inspection of the defendant’s home, safe deposit boxes and storage units and located, among other things, approximately $82,000 in cash, gold bullion and other assets of the bankruptcy estate in a safe in defendant’s home that was not disclosed to and was concealed from the bankruptcy trustee.

United States Attorney Dwight Holton stated, "Bankruptcy fraud is an assault on our judicial system. Debtors may not gain the protections of the bankruptcy courts on the one hand and then misrepresent and conceal assets from the court, trustees and creditors of the bankruptcy estate on the other. Our office will vigorously prosecute these cases to protect the integrity of the federal courts."

The maximum sentence for each count of bankruptcy fraud is five years in prison and a fine of $250,000. Judge Mosman scheduled sentencing for November 8, 2010.

The case was investigated by the FBI and Assistant U.S. Attorney Michelle Holman Kerin handled the prosecution.