Glen Carbon Residents Plead Guilty To Bankruptcy and Unemployment Benefits fraud Charges

A. Courtney Cox, United States Attorney for the Southern District of Illinois, announced today that on March 23, 2009, KEITH A. GARY, age 33, of Glen Carbon, Illinois, pled guilty to three counts of bankruptcy fraud before the U.S. District Court in East St. Louis. On January 13, 2009, his codefendant and former wife, STACIE M. GARY, age 31, also of Glen Carbon, pled guilty to four counts of bankruptcy fraud and one count employment benefits fraud before the same court. Each count of bankruptcy fraud carries a penalty of up to five (5) years’ imprisonment, a fine of up to $250,000.00, or both. Unemployment benefits fraud carries a penalty of up to twenty (20) years’ imprisonment, a fine of up to $250,000.00, or both.

The sentencing hearing for STACIE M. GARY is scheduled for 10:00 a.m. on June 12, 2009. KEITH A. GARY is scheduled to be sentenced on June 26, 2009, at 9:00 a.m.

Specifically, the indictment alleged that the Defendants deliberately concealed information on a pending workers’ compensation claim from the United States Bankruptcy Court for the Southern District of Illinois in East St. Louis and the bankruptcy trustee. The indictment also alleged that STACIE M. GARY used the United States mail to file false claims for benefits to the Illinois Department of Employment Security during times when she was actually employed. U.S. Attorney Cox emphasized, “The United States Attorney’s Office takes the issue of bankruptcy fraud seriously and will prosecute those who violate the bankruptcy laws to the fullest extent the law permits. Dishonesty with the Court, the Office of the United States Trustee, and the creditors cannot, and will not, be tolerated.”

Nancy J. Gargula, the United States Trustee for Indiana and the Central and Southern Districts of Illinois (Region 10) stated, “I am very gratified by the actions taken in this case by United States Attorney Courtney Cox and the members of the Bankruptcy Fraud Working Group for the Southern District of Illinois. The bankruptcy laws make it clear that all property, including pending claims, must be disclosed to the Bankruptcy Court, the trustee, and creditors. These prosecutions demonstrate that debtors who conceal assets will be prosecuted."

The case was investigated by the U.S. Department of Labor, Office of Inspector General, Office of Labor Racketeering, and the Federal Bureau of Investigation. The case was initiated out of the Southern District of Illinois’ Bankruptcy Fraud Working Group, which is coordinated by Assistant United States Attorney Gerald M. Burke, and which includes representatives of the Office of the United States Attorney; Office of the United States Trustee; the Federal Bureau of Investigation; the Department of Housing and Urban Development; the Internal Revenue Service, Criminal Investigation; and the Postal Investigation Service. The prosecutions of these Defendants are being handled by Assistant United States Attorney Liam Coonan and Special Assistant United States Attorney Mark D. Skaggs, of the U.S. Department of Justice’s Office of the United States Trustee in Peoria.