OAKLAND – LAWFUEL – The Law News Network – The United States Attorney’s Office for the Northern District of California announced that U.S. District Court Judge Claudia Wilken accepted guilty pleas from two East Bay individuals for concealing assets from a federal bankruptcy court on Thursday, September 8, 2005. The guilty pleas were entered on September 2, 2005.
Arnold C. Stewart, 55, of Danville and his attorney, Gregory S. Lyons, 50, of Orinda, California, each pleaded guilty to one count of bankruptcy fraud-concealment of assets, in violation of 18 U.S.C. § 152. In pleading guilty, Mr. Stewart and Mr. Lyons admitted to intentionally concealing a 16% interest that Mr. Stewart had acquired in a coal mining venture from the bankruptcy court, the creditors and the trustee in the Chapter 13 bankruptcy case. The property belonged to the bankruptcy estate. Mr. Lyons was the bankruptcy attorney for the debtor, Mr. Stewart. The defendants also admitted that they had violated a bankruptcy court’s confirmation order, which required the sale of property Mr. Stewart owned in Mendota, California to pay certain creditors. Instead of selling the Mendota property, Mr. Stewart, with the assistance of Mr. Lyons, encumbered it in order to invest in the coal mining venture.
U.S. Attorney Kevin V. Ryan stated, “The bankruptcy process depends on truthful and complete disclosure of financial transactions by debtors who seek its protection. Prosecuting those who fraudulently conceal assets and financial transactions maintains the integrity of the system for debtors who truly need it.”
The maximum statutory penalty for a violation of bankruptcy fraud-concealment of assets is five years and a fine of $250,000. However, any sentence following conviction would be imposed by the court after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553. The sentencing of both defendants is scheduled for December 12, 2005, before Judge Wilkin in Oakland.
Christina Hua is the Assistant U.S. Attorney and Celeste Miller is the Special Assistant U.S. Attorney who are prosecuting the case with the assistance of Ana Guerra. The prosecution is the result of a six month investigation by the United States Postal Inspection Service.
