Eldorado Couple Pleads Guilty to Bankruptcy Fraud
|U.S. Attorney’s Office June 05, 2014|
Earlier today, a couple from Eldorado, Illinois pleaded guilty to bankruptcy fraud, the United States Attorney for the Southern District of Illinois, Stephen R. Wigginton, announced. Lucy J. McGill, 62, pleaded 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. Lucy McGill’s husband, Gary G. McGill, 69, 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. The case was filed 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 pleading guilty today, 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 today’s guilty pleas, United States Attorney Wigginton stated, “Bankruptcy fraud cheats creditors out of what they are owed. The United States Attorney’s Office for Southern Illinois is committed to prosecuting individuals who commit this type of fraud and protecting the integrity of the bankruptcy system.”
“Abuse of the bankruptcy system by concealing assets for personal gain threatens the integrity of the bankruptcy system and undermines public confidence in that system,” stated Nancy J. Gargula, United States Trustee for Southern Illinois, Central Illinois and Indiana (Region 10). “I am grateful to United States Attorney Wigginton and our law enforcement partners for their strong commitment to combating fraud and abuse in bankruptcy cases.” 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, Indiana, and Peoria, Illinois. 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 McGills will be sentenced on October 2, 2014, at the United States District Court in Benton, Illinois. The sentencing hearing will be conducted by United States District Judge J. Phil Gilbert. Each count of bankruptcy fraud is punishable by not more than five years’ imprisonment and/or a $250,000 fine and not more than three years of supervised release. The actual sentence will be determined by the court and will be guided by the United States Sentencing Guidelines.
The investigation is being conducted by the Federal Bureau of Investigation (FBI). The case is being prosecuted by Assistant United States Attorneys Scott A. Verseman.